Realty411 Featuring Tom Wilson from Wilson Investment Properties - DRAFT ISSUE

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INSIDE: STRATEGIES FROM TOP LEADERS + FINANCE RESOURCES

INVEST WISELYLearn to ProtectYourself from HarmHow to Diversify to Avoid Risk & More

Vol. 6 • No. 2 • 2016

TOM WILSONGOES TRIPLE NETDiscover How a Silicon Valley Engineer Amassed an Eight-Figure Texas-based Real Estate Portfolio

• Kansas City, MO Starting in the Mid $60’s Cap Rate 9% Strategy: Cash Flow & Appreciation

Cash Builder

Fix-and-Flip Opportunities

Cap Rates 14%

Starting in the Mid $40’s

Cash Flow & Appreciation

Starting in the Mid $60’s

BLACK BE LT INVESTORSEducation • Mentoring • Nationwide Investments

NATIONWIDE TURN-KEY REAL ESTATE INVESTMENTS Cash Flow + Appreciation + Tax Benefits = Wealth Builder

• Cleveland, OH Starting in the Mid $40’s Cap Rate 14% Strategy: Heavy Cash Flow & Appreciation • Indianapolis, IN Starting in the Mid $60’s Cap Rate 9% Strategy: Cash Flow & Appreciation

(951) 28 0-1900B l a c k B e l t I n v e s t o r s . c o m

Mentoring• One-on-one Coaching in Building, Setting and Achieving Your Goals

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Offered in Phoenix, Arizona Call Us for More Information

• Kansas City, MO Starting in the Mid $60’s Cap Rate 9% Strategy: Cash Flow & Appreciation

BLACK BE LT INVESTORSEducation • Mentoring • Nationwide Investments

NATIONWIDE TURN-KEY REAL ESTATE INVESTMENTS Cash Flow + Appreciation + Tax Benefits = Wealth Builder

• Cleveland, OH Starting in the Mid $40’s Cap Rate 14% Strategy: Heavy Cash Flow & Appreciation • Indianapolis, IN Starting in the Mid $60’s Cap Rate 9% Strategy: Cash Flow & Appreciation

• Phoenix, AZ Starting in the Upper $70’s Cap Rate 3% - 5% Strategy: Appreciation

• Toledo, OH Starting in the Low $40’s Cap Rate 12% Strategy: Cash Flow

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Mentoring• One-on-one Coaching in Building, Setting and Achieving Your Goals

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Real Estate Education for Investors• KickStart 101 – How to Create Cash and Wealth Through Real Estate • Wholesaling – Flipping Houses for Quick Cash• Master’s Program In the Field Wholesale Training • Rehabbing – Making Huge Profits • Purchase Options – The Best Creative Financing Strategies• Joint Venture – Developing Strategic Alliances• Business Training – Quick Start Entrepreneurs • Real Estate Investor Club – Monthly Meetings to Stay Engaged

•We locate properties that are not available on the MLS to find our clients the absolute best deals!

Realty411Guide.com PAGE 5 • 2016 reWEALTHmag.com

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Rusty TweedCertified Estate Advisor

Looking for ways to increase your investment income?We have experienced advisors to answer your financial and investment questions...l 1031 Exchange properties available

Tweed Financial Services, Inc. Financial & Estate Planning for Real Estate Investors

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Call 800-526-1599 ext. 106 or enroll online: www.TweedFinancial.comMeal included, provided by our sponsors. Seating limited to experienced investors. Reservations required.

As with any real estate investment there are various risks, including but not limited to: illiquidity, limited transferability, and variation in occupancy which may negatively impact cash flow, and even cause a loss of principal. Real Estate values may fluctuate based on economic and environmental factors and are generally illiquid. This does not constitute as an offer to buy or sell any real estate, securities or insurance. Such offers are only made by prospectus which should be read thoroughly and understood before investing. Prospectuses will be available at the workshop. CA Insurance License #OB13052. We do not provide tax or legal advice. Securities offered through Cabot Lodge Securities, LLC (CLS). Member FINRA/SIPC. Advisory Services offered through CL Wealth Management, LLC (CLWM), an SEC Registered Investment Advisor. Tweed Financial Services, Inc. is not controlled by or a subsidiary of Cabot Lodge Securities, LLC or CL Wealth Management, LLC.

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When the clock is ticking, the last thing you need is to get

tripped-up in red tape and paperwork. Relax. At Civic, you’ll

get in-house appraisals in just 24-48 hours and funding in

as little as 4-10 days. As a direct lender with access to our

own capital, Civic provides up to 75% LTV of as-is value with no minimum FICO

requirement. Got a project in mind? Call us at the number below. We’ll show you

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• 24-48 hour in-house appraisals

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• Loan amount $100K-5 Million

• Foreign National program

HOW FAST ARE OUR APPROVAL TIMES?LET’S JUST SAY WE THINK A 3-MINUTE EGG

TAKES ABOUT 21/2 MINUTES TOO LONG.FAST APPROVALS, QUICK CLOSINGS, COMPETITIVE RATES — WHEN YOU NEED TO MOVE FAST, YOU NEED TO CALL CIVIC.

©2016 All rights reserved. This is not a commitment to lend. Restrictions may apply. LTV limit is based on current, accurate appraised value. Civic Financial Services, Inc. reserves

the right to amend rates and guidelines. All loans are made in compliance with Federal, State, and Local laws. Civic Financial Services, Inc. is a California Finance Lender under

NMLS 1099109 and the California Department of Business Oversight license #603L321, AZ Mortgage Broker license #092863, ID Mortgage Broker/Lender License #MBL-8288,

OR Mortgage Broker License #ML-5282, and WA Consumer Loan Company License #CL-1099109. Civic Financial Services, Inc. is an equal opportunity lender.

pg. 52

pg. 13pg. 20

Todd Pigott with Zinc

Financial is a leader in the private money space.

Zinc uses all of their own funds to lend out, which separates

them from the rest of the lending pack.

cont

ents

pg. 25

10 Publisher’s Note: Calculated Growth Spurts13 Is it Time for Your Next 1031 Exchange?17 Optimal Real Estate Investment Strategies20 Accelerate Your Financial Independence22 Following the Money with NNN Properties27 Sensei Gilliland Crunches the Numbers30 Wall Street Hedge Funds Buying SFRs Again?33 Unlimited Probate Leads for Rehabbers37 Special Report: Fraud Alert and Protection40 Randy Hughes Explains Land Trusts42 The New Avenue for Financing Real Estate Assets44 Get Organized and Grow with Propelio.46 Changing the Game with 3D Media Tours 49 Private Money411 Features Patty Arvielo51 Zinc Financial’s Bullish Advance in the Market54 Building Your Pool of Private Lenders58 REICredit.com, a New Finance Resource63 Patty Arvielo Leads New American Funding66 Charlie Fitzgerald Discusses Private Money71 Trust Deeds a Not So New Approach to Investing74 Fuquan Bilal Reveals How to Hack the Money83 Valuations & Worthless Assets in Your IRA85 Special Segment: Learn from the Texas’ Experts88 An Exclusive Interview with Shenoah Grove91 Questions to Get Started by Dennis Henson92 Tim Herriage on Tactical Investment & Strategy100 Little Pink Houses with BIG Green Paydays.102 A Q-&-A with Merrill Chandler with CreditSense106 Drive Up Your Decking with these IdeasWhen the clock is ticking, the last thing you need is to get

tripped-up in red tape and paperwork. Relax. At Civic, you’ll

get in-house appraisals in just 24-48 hours and funding in

as little as 4-10 days. As a direct lender with access to our

own capital, Civic provides up to 75% LTV of as-is value with no minimum FICO

requirement. Got a project in mind? Call us at the number below. We’ll show you

how to beat the clock.

Corporate Headquarters

2015 Manhattan Beach Blvd, Suite 106

Redondo Beach, CA 90278

310.504.3618 / www.civicfs.com

• Funding in 4-10 days

• Up to 75% LTV

• No minimum FICO

• 24-48 hour in-house appraisals

• Competitive fixed rates

• Loan amount $100K-5 Million

• Foreign National program

HOW FAST ARE OUR APPROVAL TIMES?LET’S JUST SAY WE THINK A 3-MINUTE EGG

TAKES ABOUT 21/2 MINUTES TOO LONG.FAST APPROVALS, QUICK CLOSINGS, COMPETITIVE RATES — WHEN YOU NEED TO MOVE FAST, YOU NEED TO CALL CIVIC.

©2016 All rights reserved. This is not a commitment to lend. Restrictions may apply. LTV limit is based on current, accurate appraised value. Civic Financial Services, Inc. reserves

the right to amend rates and guidelines. All loans are made in compliance with Federal, State, and Local laws. Civic Financial Services, Inc. is a California Finance Lender under

NMLS 1099109 and the California Department of Business Oversight license #603L321, AZ Mortgage Broker license #092863, ID Mortgage Broker/Lender License #MBL-8288,

OR Mortgage Broker License #ML-5282, and WA Consumer Loan Company License #CL-1099109. Civic Financial Services, Inc. is an equal opportunity lender.

P R I VAT EMoney 411SUMMER ISSUE 2016

Realty411Guide.com PAGE 15 • 2016 reWEALTHmag.comRealty411Guide.com PAGE 16 • 2016 reWEALTHmag.com

How to Own Real Estate

In this class you will learn to dominate the banks, own multiple properties, eliminate your mortgages in ten

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All educational content is provided free of charge. There is no “selling from the stage” or solicitation by the speaker. The class will last approximately 50 minutes plus time for questions. VIP is not a financial advisor, nor do they sell any financial products. VIP has been providing free financial education for over 15 years and has an A+ rating with the Better Business Bureau.

Over the past fifteen years, national consultant, speaker and educator, Mr. Matthew Pillmore has presented fi-nancial educa-tion nationally for and in front

of countless real estate organizations. He speaks nationally on the topics of credit scoring, debt elimination, fiscal respon-sibility and strategic cash flow maximiza-tion. Mr. Pillmore has studied under the founders of the FICO credit scoring sys-tem. We have countless testimonials and references from previous REIA owners, managers and attendees that can attest to the value of the education provided by VIP Financial Education.

Without Mortgages Program Summary

Our Expert Speaker

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“If you’re serious about your business this is a must

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Photo left to right: Matthew Pillmore with VIP Financial Education shares his investment strategies and tips to expedite your financial independence. Plus, Adiel Gorel with ICG Group reveals the optimal investment strategy for our readers.








the following:







of liabilities







Our Expert Speaker



see class!”

Learn to DOMINATE the Bank, OWN Multiple Properties, and ELIMINATE Your Mortgages in 10 Years and Start with Very Little Cashflow.







the following:







of liabilities







Our Expert Speaker



see class!”

Looking for Quality Education for Your Next REIA Meeting?VIP Financial Education classes teach real estate investors how to accom-plish the following:

• Maximize monthly cash flow and increase access to capital• Accelerate the acquisition of assets, including investment real estate• Accelerate the elimination of liabilities• Increase credit scores organically• Build emergency reserves

OUR EXPERT SPEAKEROver the past 15 years, national consultant, speaker and educator, Matthew Pillmore has presented financial education nationally for and in front of count-less real estate orga-nizations. He speaks

nationally on the topics of credit scoring, debt elimination, fiscal responsibility and strategic cash flow maximization. Mr. Pillmore has studied under the founders of the FICO credit scoring system. We have countless testimonials and references from previous REIA owners, managers and attendees that can attest to the value of the education pro-vided by VIP Financial Education.


“If you’re serious about your business this is a must see class!”


Join Me On This Journey Towards Wealth with

Real Estate!

What an incredible year it’s been so far. We’ve seen our media team grow, produced expos in new cities, and welcomed news compa-nies as clients. Yet with all the activity of

running a publishing business and a busy household, I still found time to make real estate offers. How about you? Are you making offers? That is the first step towards success as an investor. How are you going to enjoy financial freedom from real estate tomorrow, if you don’t make any offers today? MAKE OFFERS! It’s also crucial to make solid, loyal and long-term rela-tionships in this business. Real estate success is not based on the knowledge or efforts of solely one individual. Suc-cess as an investor is a team effort. Choose your associates wisely, and be loyal to them. I’ve seen so many people drop their broker or business colleagues or try to go around them, just to save a few thou-

sand dollars. Don’t do that! If someone gives you their abso-lute best effort and invests their energy to help you become successful, you should reward them by treating them well and respecting their time. Networking is the first step to building relationships in this industry. I’ve developed many long-term friendships and partnerships from attending industry functions. So get out there and mingle and connect with other like-minded indi-viduals. The next person you meet at your local mixer can be the one who brings you the next house to rehab or helps you identify a fantastic rental. Remember: Success in a journey, not a destination. Along the way, we will meet people who can really impact our life and help us get to where we want to go. It’s so reassuring that we don’t have to go at this alone! Until next time: Make offers, go find the deals by letting people know what you do, and let us know if we can help you. We are here for you on this journey...

Linda’s Letter

Linda Pliagas

Linda Pliagas, Publisher

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economic news & new properties

by Rusty Tweed, CEO of Tweed Financial Services

S avvy real estate investors have long used periodic 1031 exchanges to main-tain leverage, increase in-come and equity, and even-

tually divest themselves of "tenants, toilets, and termites" by exchanging into shares in larger, professionally managed properties.

WHAT IS 1031?1031 refers to Section 1031 of the U.S. Internal Revenue Code, which

allows real estate owners to exchange certain types of property, deferring the recognition of capital gains or losses due upon sale, and hence deferring any capital gains taxes that might be due. Owners of residential real estate often use this strategy to upgrade from owner-managed properties to profes-sionally managed properties, reducing their personal involvement while maintaining rental income streams and the tax benefits of real estate owner-ship. Long-term, this can be a good strategy. In the short term, however, real estate is subject to market cycles

similar to stocks and bonds. In 2006, the real estate bubble burst, lead-ing to a decline in property values, transactions, and 1031 exchanges that reached bottom in 2009. Since then, some recovery has occurred, and our clients have begun asking us, “When will the market be ready for our next 1031 exchange?”

GOOD NEWS FOR PROPERTY OWNERS

Income property values are driven in large part by supply and demand – the number of rental units available vs. the number of qualified tenants >

Is It Time for Your Next 1031 Exchange?

STRATEGY


WE NOW HOST

MEETINGS/MIXERS

currently available from the traditional sources (Freddie Mac). Lenders tight-ened credit requirements tremendous-ly in response to the mortgage crisis of 2006-2007, which in turn collapsed new construction to its lowest level since World War II. The situation is now easing a bit, but will continue to limit construction of new apartments for at least several more years (Witten Advisors). Due to these factors, it's becom-ing more and more of a landlord's market. National apartment vacancy rates peaked at 8% in 2009, but in 2014 are down to 4.1% (REIS). First quarter 2014 vacancy rates in Los Angeles were only 3%, a historic low (Beacon Economics). Meanwhile, in first quarter 2014, rents on new leases increased 2.7% in Los Angeles over the same quarter in 2013 (Beacon Economics). This has contributed to a recovery in multifamily property values (Grubb & Ellis).

1031 EXCHANGE ADVICEReflecting this recovery on the 1031 exchange front, Exeter 1031 Exchange Services reports, "Our 1031 exchange transaction volume for 2013 was back to pre-recession levels, and our year-to-date transaction volume for 2014 continues to exceed that of 2013." So, the game is definitely back on. Of course, when doing a 1031 exchange, it's important to get a good price on the replacement property. Cap rate, the annual expected return on a property divided by the current value, is a common means of compar-ing the desirability of different prop-erties. Due to recent appreciation, cap rates in Los Angeles are lower than the country as a whole. This makes other metro areas where cap rates are more attractive (Jones Lang LaSalle) well worth consideration. There is also a great window of opportunity right now to acquire properties at a discount from owners in distress and


Continued on pg. 21

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competing for them. In the resi-dential market, renter population is growing at 4% per year (U.S. Census Bureau), while construction of new apartments is adding only 0.5% per year to existing inventory, with no substantial speed-up projected for the next five years (REIS). This is good news for owners of residential rental properties. The strong increase in renter pop-ulation is being driven by three fac-tors. The first is immigration. About a million legal immigrants come to this country each year, and 85% of them rent, as opposed to only 32% of existing U.S. residents (National Multi Family Housing Council).

BABY BOOMERS & ECHO BOOMERS

Then there are Baby Boomers down-sizing in retirement. While most are homeowners and will remain so, an increasing percentage are opting, either by necessity or choice, for the flexibility, mobility, and main-tenance-free living of being renters (National Multi Family Housing Council). The greatest increase in demand for rentals is coming from the Echo Boomers, the grandchildren of the Baby Boomers, born in the 1980s and 1990s. This group is 75 million strong, and of the age when most singles and young families have traditionally rented while saving to buy their first home. Now, due to the economy and changing lifestyles, many of them are postponing or even rejecting home ownership in favor of the lower debt and greater flexibility afforded by renting (National Multi Family Housing Council). TRENDS FAVOR LANDLORDSTo keep pace with renter popula-tion growth, 10 million additional apartment units will be needed in the next 10 years. That will require $1 trillion in invested capital, but it's not

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OPTIMAL REAL ESTATE INVESTMENT

As a busy professional, it is likely that your income is sufficient to qualify for loans on

investment properties – especially Single Family Homes – in most of the U.S. markets. A high percentage of busy pro-fessionals also have credit scores which bode well for getting good financing. I maintain that the ideal prop-erty for real estate investment for the busy professional is the Single Family Home (SFH). SFHs are almost a perfect property for the individual investor who also has a regular job or business.

OPTIMAL REAL ESTATE INVESTMENT

A Methodology for the Busy Professional by Adiel Gorel SFHs are still the “American Dream” for most people. They are also a relatively attainable “dream” in many large metropolitan areas in the US where prices are quite affordable, even in 2016. SFHs are essentially the most “liq-uid” real estate since when it’s time to sell, your potential buyer pool is the largest – effectively all home buyers in the marketplace. SFHs are the real estate investment on which you can get the most pow-erful loan in the real estate universe – the magical fixed-rate, 30-year loan. Technically this loan is available on 1 to 4 residential units so duplexes, triplexes and four-plexes also qualify.

However SFHs are usually superior to the 2-4 unit properties. In good areas you will usually find only SFHs, while you may have to travel to another part of town to see the “plexes” and they will usually be surrounded by many other “plexes”. The “plexes” are more likely to present management challeng-es, have more short-term tenants (statistically) and to top it off, may not necessarily provide as good an appreciation over the long term. One exception is new duplexes in white-collar areas, but overall the SFHs are superior. I have been buying homes for well over 30 years, and helped >


people buy nearly ten thousand homes in dozens of markets. During these decades, I have witnessed many “plexes” and their perfor-mance as well as many thousands of SFHs. My experience, and the ex-periences of thousands of investors, leads me to favor the SFHs over the “plexes”.

~~~~Buying larger residential proper-

ties – apartment complexes – can be a good investment, but there are many areas in which the investor needs to be an expert. The optimal apartment complex size, based on the experience of most apartment complex investors, is between 100 and 300 (many say 150-300) units, so economies of scale can be utilized to improve cash flow. For example you may need one full-time on-site manager and one full-time maintenance person for a 110-unit complex, but if you have a 60-unit complex you may STILL need to use one full-time, on-site manager

and one full-time, on-site maintenance person – but with 50 less rents coming in! That is NOT using economies of scale very well. There is a lot to discuss on the subject of large apart-ment complexes, but for the scope of this article, suffice it to say that they require deep expertise to run properly, they may take up much more time that a busy professional has available, they do NOT get financed with the magical 30-year fixed rate loans, and they usually call for a large invest-ment upfront. For the busy profes-sional, Single Family Homes present a simple, effective, and very powerful investment, with outstanding financ-ing that cannot be found anywhere else and a time commitment, which is relatively low.

~~~~The 30-year fixed rate loan does

not usually get its due as an amazing financial tool that should be utilized by any savvy investor who can get it. For many foreigners, it‘s incompre-hensible that in the U.S. we can get a

loan that will never keep up with the cost of living for 30 years. During that period, essentially everything else DOES keep up with the cost of living, including rents. Only the mortgage payment and balance (which also gets chipped down by amortization) do not keep up with inflation. You can talk to many borrowers who have taken 30-year fixed rate loans and after, say, 16 years, realized that although there are 14 years remaining to pay off the loan, the loan balance AND the payment seem very low relative to marketplace rents and prices. The remaining 14 years is almost meaningless, since in many cases (statistically and histori-cally) the loan balance will be a small fraction of the home price and not very ‘meaningful”. Just to get some perspective, most other countries on earth have loans that constantly adjust based on inflation. Both the payment and the balance track inflation all the time – usually with no yearly and lifetime caps as adjustable loans have in the United States.


The power and positive effect on one’s financial future get magnified when you consider that in 2016 we are still in a period in which interest rates are very low. While investors cannot get the same favorable loans as homeowners, it is nevertheless quite common nowadays to see investors getting a rate of between 4.25% and 4.75% on SFHs invest-ment properties. From a historical perspective, these are extremely low rates. Most experts think that in the future, mortgage rates will rise. From a historical perspective even 7% is considered a low rate. Thus these days, you can “turbo boost” the great power of the never-chang-ing 30-year-fixed rate loan by also locking these amazing rates, which will never change. If in the following years interest rates indeed go up, you will feel quite good about having locked under 5% rates forever.

Once you have gotten your fixed rate loans, two inexorable forces start operating incessantly: Inflation erodes your loan (both the payment and the remaining balance), and the tenant occupying your SFH pays rent, which goes in part towards paying down the loan principal every month. These two forces create a powerful financial future for you.

~~~~Many investors think that if a 30-

year fixed rate loan is good, then a 15-year loan must be better. I actual-ly beg to differ. You can always pay a 30-year loan in 15 years (or 14 or 20 or 10 or 8) if you wish – just add some extra to the principal payment. However you cannot pay a 15-year loan off in 30 years. Thus the 15-year loan FORCES you to make the high-

er payment while the 30-year loan gives you the important flexibility of keeping your payments low OR making them high based on your financial situation and other considerations. Some would say that the 15-year loan is also better since it has a better rate. True, the 15-year rate may be 0.25% or even 0.5% better than the 30-year rate. However, in my opinion this is not enough to justify the enormous loss in flexibility. In addition, having the loan for a lon-ger time allows inflation to “erode” the loan even further. This last consideration greatly minimizes the argument some investors make that “with a 30-year loan they pay hun-dreds of thousands of dollars more over the life of the loan.” One factor missing here is that they neglect the TIME VALUE OF MONEY! These extra dollars paid in year 20, 22, 28, etc., are in fact extremely “cheap” dollars in the sense that their buying power is greatly lowered over time. If the value of these future dollars were to be calculated based on the PRESENT buying power of the dollar, some of the later payments may be worth mere pennies on the dollar. In summary, I recommend getting a 30-year loan and then choose how long to take to pay it (anywhere between zero and thirty years – you choose!).

~~~~While interest rates are low, it

would behoove the smart investor to buy SFHs and get 30-year fixed rate loans on them while this “win-

Adiel Gorel is the Founder and CEO of ICG (Internation-al Capital Group) Real Estate Invest-ments, a Marin County, California based real estate investment company

started in 1987 that assists investors in purchasing properties, and also provides guidance on lending and property management solutions. The firm was started in 1987 and for over 30 years Mr. Gorel has dedicated his life to being “in the trenches” across the country to know first-hand what homes are available in different mar-kets and looking at homes (in person) to ensure that the fit is right for those investors he serves. He also has face-to-face visits across the country with other brokers and affiliates he works with, in negotiating investments for his clients. To date, he has purchased over 8,000 homes for investors and has purchased nearly 600 homes with his partners/affiliates worldwide for his own portfolio. Mr. Gorel is also the author of “Remote-Con-trolled Riches—The Busy Person’s Guide to Real Estate Investing.” He has been profiled on ABC-TV and CBS-TV network affiliates across the country, featured in the San Francis-co Examiner, Fortune Magazine and interviewed on various radio shows. He holds a Bachelor of Science in Electrical Engineering from McGill University in Montreal, Quebec, Canada, and a Master of Science from Stanford University in Palo Alto, California.

‘While interest rates are low, it would behoove the smart investor to buy SFHs and get 30-year fixed rate loans on them while this “window” is open.’Realty411Guide.com PAGE 19 • 2016 reWEALTHmag.com

Continued on pg. 114

Dial into new tactics and gain the cash flow you need to fuel the financial

security and lifestyle you crave…What if you could hack the math, leverage VIP financial strategies, save thou-sands and get to your lifestyle goals faster, all while enjoying your venti frappuccino too?

There’s one thing which virtually everyone agrees on. That is the banks have been building their own rules, to their own benefit for years. When the rules don’t serve them best, they have shown a track record of lobbying and blatantly breaking them until they get their way. That means the average individual and family is always at a disadvantage. One which costs them hundreds of thousands of dollars over their lifetimes, if not millions.

Fortunately we don’t have to remain victims to lack luster returns on bank deposits, predatory interest rates, and terms which definitely aren’t in our best interests forever. According to Matt Pill-more, founder of VIP Financial Education the key is to tap into “alternative banking strategies.”

VIP FINANCIAL EDUCATION

The costs of using the various financial vehicles we all need on a daily basis, and to get ahead levy a hefty toll on most. The biggest trap for most is that

they haven’t been taught how to drive them well, or where to look for better deals, and how to secure them. With such an obvious gaping void in practical education at school, some might even wonder whether the banks have their fingers in the curriculum too. VIP Financial Education focuses on enlightening individuals on these cash flow secrets they should have been taught in school.

VIP was originally founded in 2000, when Matt Pillmore assembled a team of top financiers, including the nation’s leading credit attorney, and one of the orig-inal creators of the FICO score. The team committed to learning, leveraging the best minds, tools and talent, and to focusing on “making a difference, versus a fortune” In the process Matt “discovered a revolutionary cash flow formula, which allows real estate investors to own real estate free and clear far more quickly and safely by turn-ing the banks’ rules against themselves.” And in 2009 the company decided to streamline, refine, and update with a life-changing new system to “rapidly accelerate economic independence based on this formula.”

VIP Strategies to Accelerate Your ECONOMIC INDEPENDENCE







the following:







of liabilities







Our Expert Speaker



see class!”

— ARTICLE BY TIM HOUGHTEN



Continued on pg. 98

bank foreclosures, and to convert B and C properties to A's as the demand for upscale rentals drives gentrifi-cation (the process of wealthier residents moving to an area, and the changes that occur due to the influx of wealth) in certain areas (RK Properties). 1031 exchanges are not without their issues, however. When the time comes for you to upgrade your real estate investments, it is important to work with 1031 specialists with the experience and relationships to help you find the right 1031 solution and replacement property for your individual circumstances. For a personal, private consultation, give me a call at (626) 588-1520. Robert “Rusty” Tweed is president of Tweed Financial Services, Inc. an independent, financial planning and investment management firm. Mr. Tweed has educated thousands of investors on real estate investment and estate and trust issues through his popular seminar series since 1997. He is a past board member of the Real Estate Investment Securities Association (REISA) and in 1999, Rusty was selected Estate Planner of the Year by the National Association of Financial Planners and subsequently served on the professional associations Board of Advisors. Securities offered through Cabot Lodge Securities, LLC (CLS), Member FINRA/SIPC. Ad-visory Services offered through CL Wealth Management, LLC (CLWM), an SEC Registered Investment Advisor. Tweed Financial Services, Inc. is not controlled by or a subsidiary of Cabot Lodge Securities, LLC or CL Wealth Management, LLC. CL#1232015

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Call 800-526-1599 ext. 106 or enroll online: www.TweedFinancial.comMeal included, provided by our sponsors. Seating limited to experienced investors. Reservations required.

As with any real estate investment there are various risks, including but not limited to: illiquidity, limited transferability, and variation in occupancy which may negatively impact cash flow, and even cause a loss of principal. Real Estate values may fluctuate based on economic and environmental factors and are generally illiquid. This does not constitute as an offer to buy or sell any real estate, securities or insurance. Such offers are only made by prospectus which should be read thoroughly and understood before investing. Prospectuses will be available at the workshop. CA Insurance License #OB13052. We do not provide tax or legal advice. Securities offered through Cabot Lodge Securities, LLC (CLS). Member FINRA/SIPC. Advisory Services offered through CL Wealth Management, LLC (CLWM), an SEC Registered Investment Advisor. Tweed Financial Services, Inc. is not controlled by or a subsidiary of Cabot Lodge Securities, LLC or CL Wealth Management, LLC.

Register for our next Investment Strategies Workshop hosted by Tweed Financial Services, Inc.

Is it Time for Your Next 1031 Exchange, pg. 14

“NO BLISTERS” There are three reasons that 99% of Americans fail at improving their finances:

1. They don’t know about the alternatives2. They find the math too confusing3. They don’t see the value in the long game

What VIP Financial Education has created is a vehicle, which prevents 80% of future interest costs. The outcome if used consistently is a free-and-clear lifestyle in 25% of the time, and a lot more spendable cash flowing in.

Best of all Matt Pillmore says these strategies are “easy to implement,” if you have a guide. He insists “no blisters” will be incurred in mapping your way to your ideal lifestyle. In most cases he says there are no budgeting restrictions, or need to try and beef up earned income. That means you can continue to treat yourself to your favorite delicacies, continue to do what you love, and get on the fast track to financial freedom at the same time.

THE FIGHTER JET OF FINANCES In his own words, Pillmore says, “VIP Financial Education’s system is a fighter jet versus the financial horse and buggy the majority of individuals are trying to use these days.” The techniques taught are aimed to rapidly accelerate:

• Reduction of liabilities• Increasing assets• Increasing cash flow• Freedom of choice

This is achieved via new Debt Weapons, which optimize credit, and optimize cash flow.

CREDIT SMARTS FOR REAL ESTATE INVESTORS

Out of the thousands that have been through the VIP program Matt reports “92% expressed a desire to share this information and tactics with their friends.”

With this level of proven value and praise there may be many real estate investors that could see immense benefits of a program like this. The same applies to real estate coaches and vendors who see the value in giving their contacts the power to ramp up their

TX vs. CA

While some big real estate funds are trying to find

their place in California regions like Silicon Valley, some of its savviest and earliest engineers have been sourcing superior invest-ments elsewhere.

Tom K. Wilson arrived in Northern California in the late ‘60s. He focused on management roles with the high-tech industry in engineering, manufacturing, sales, marketing, and profit centers. While many funds and entrepreneurs are still buying real estate in high-end California, veterans like Tom saw better opportunities decades earlier. Though not an easy task today, Realty411 caught up with radio show host and current CEO of Wilson Invest-ment Properties, Tom K. Wilson, to get the scoop.

“I Made More Money in Real Estate Sleeping, Than Working 60 Hours a Week in Tech.”

Being successful in Silicon Valley’s hot tech and finance world, Wilson began to discover that other successful individuals were investing their own cash in real estate. Recently we’ve witnessed entrepreneurs and celebrities making big real estate investments too. Hedge Funds and Wall Street traders have even been ‘jumping ship’ for real estate as exotic as mobile homes.Tom began buying rental homes back in the ‘70s. His big “Eureka” moment came when reviewing his finances, he

realized he was making more money from his real estate investments while he was sleeping than while he was working in his corporate and startup businesses. While everyone else was partying and buying luxury items (before the big dot com bubble crash), Tom was strategi-cally and financially set to leave the high tech industry, becoming a full-time real estate investor.

Hacking the Code to Real Estate Investment Success

Like most new investors, Tom began with single family homes, realizing later he had “confused taking a job as a landlord with being an investor.” Second, he recognized that “most people underutilize their own generalist skills to analyze and manage alternate business ventures.” This combination can lead to poor results, if not worse. He found that this best way to learn was to find others who were successful and ask them questions. He met with everyone he could who was exceedingly successful in real estate investing and picked their brains. He found two primary principles:

PRIMARY PRINCIPLES:

1. Delegate and leverage other’s expertise, (like property management and professionals who are real estate invest-ment experts in each of their fields);

2. Consider investing outside of high end states like California. To Wilson’s surprise, other major metros were getting three times more rent for the same real estate investment dollar than the coastal regions like Silicon Valley. That is still true today. This paradigm shift was

Following the Money – The Path and Case for NNN & Syndications


TX vs. CA

“investing locally no longer pro-duced the best returns.”

Tom Spent a Year Researching

America’s “go to” real estate metros turned out to be in Texas and they came out on top with the highest rent to invested dollar ratio for major economic centers. Today a median price house of $900K in Silicon Valley rents for $3,000. It is the lowest rent per in-vested dollar in the US other than Manhattan. That same $900K property could be exchanged (with no capital gains cost) into seven better qual-ity Texas properties renting for a total of $9,000. You don’t need a CPA to figure out why that is better cash flow. (For more, visit http://tomwilsonproperties.com) Why? Texas is the financial and business capital of the South, is business friendly, has no state in-come tax, it has affordable housing for its employees, it has a very broad-based economy, it has the fastest-growing employment in the U.S., it is centrally located in the time zones of the Americas (great for communications and distribu-tion), it is in the Sun Belt, and it has the largest capacity airport in the world. Just to name a few. Wilson says,“The most important

factor by far in the regional selection process for optimum cash flow is to find the best rent-to-purchase price ratios, 1% being the minimum goal ($125K home should get $1,250/mo rent. For multifamily and commercial products the CAP rate is the equiva-lent metric.” The CAP rate is the percent return in one year if you paid cash for the property. CAP rates and returns are running typically double in Texas cit-ies as compared to California cities. Secondly, factor in interest rates. At today’s rates, Tom advises to get all of this cheap fixed rate debt you can. Third, look for a business friendly location with the least problems: collections, turnover, repairs, mainte-nance, etc. For example, Detroit and Dallas have close to the same rent ratio, however, most would guess that Dallas is a safer bet. Fortunately, you don’t have to guess; the data is available and definitive. Finally, the best cash flow now is essential, but we also want future higher income (rent increases) and in-creased property values. Tom distilled it down to one word: “JOBS”. Busi-ness drives inward migration, which drives demand for housing, products, and service sales. There are indeed other factors such as absorption and new construction rates, however the overwhelming factor is jobs. Texas has created more jobs (1.2M) since

WESTERN CROSSING RETAIL CENTER$20.2M, $50,000/share, 17 Tenants, built 200914% Annual return, 8.25 CAP, 8% Preferred return

COM vs. MULTIthe recession than all other states combined. Amazing.

Putting the New Strategyinto Tactical Action

In 1999, using his skill set from managing high tech companies, convincing data, and the selection of a team in DFW, Tom started sell-ing off his California properties and purchasing Texas properties using 1031 tax deferred exchanges (pay-ing no capital gains). Over 17 years he bought and sold over 3,000 units and $200M of real estate, includ-ing 8 multifamily properties, over 500+ single-family homes and multi-plexes, three condo conver-sions, 10 syndications, and eight commercial properties. He never looked back. Not only did strategy and data serve them well, but they also protected him during the recession.


Continued on Next Page.

TX vs. CA

Dallas and Texas property values dropped the least of any major economic region in the country. Wil-son says, “We all learned that not losing what you have is as important as good returns.”

Shops, Offices, and Syndications - NNN

After the crash, people who had not considered real estate as an investment vehicle before now wanted to jump in. Even hedge funds and Wall Street now identified residential real estate investing as a hot ‘new’ asset class. As a consequence the new high demand vs supply has increased the prices of homes and multi-family units more than the income. To the new real estate investor the natural progression was to invest in multifamily proper-ties because it felt familiar (even though they are more complex than many realize). Thus we developed a supply/demand imbalance. So today commercial products are giving typically 2%

higher returns than residential ones in most major high return markets in the country because of their relative positions in their market cycles. Multifamily properties and their returns have peaked out whereas commercial properties are still in the expansion part of the cycle. Tom says he finally found “the apex of returns in this new marketplace, commercial real estate.” Commercial properties are advantageous because of the economies of scale, more predictability, higher cash flow, higher quality tenants, longer-term leases, automatic rent

increases, NNN, and they are simpler to manage profes-sionally (as long as the manger has the higher level skill set). NNN leases pass the expenses of the taxes, insur-ance, and repairs to the tenants, giving the investment more certainty of projected returns.

Leveraging Experts Using Syndications

Wilson acknowledges that all of this may feel out of

reach for the individual investor, however syndications allow one to move up to the ‘big leagues’ that are nor-mally restricted to institutional and wealthy investors. Syndications are growing in popularity. There were over 50,000 real estate syndications last year in the U.S. The small investor can leverage the expertise of the syndi-cator’s skills and experience. With the right syndicator, metro, and product, one can turn $50K into quarterly cash flow and exiting with a total of $110K over seven years.


PLANO PARKWAY BUSINESS CENTER2701 West Plano Parkway, Plano TX 75075

Confident ial offer ing MeMoranduM

PLANO PARKWAY BUSINESS CENTER$10.2M, 6 Tenants, 116K sq ft., $50K/ShareSyndication. Located in Plano, Texas

COMMERCIAL ADVANTAGES • More predictable & higher cash flow • Higher quality tenants • Long-term leases • Renewal options • Automatic annual rent increases • NNN: Reimbursement for expenses • Can create value by driving up income (and NOI) • Simple to manage professionally

TX vs. CA

A good syndicator has high integrity, a successful track record, filters through hundreds or thousands of opportu-nities to select the best, narrows the selections, performs extensive due diligence, loan negotiations, invests along-side the client, and provides professional management of the share holders’ investment. They will provide exten-sive information about each investment, the economy of the region and be available to answer all of your questions to your satisfaction. The shareholder enjoys the passive benefits without the liability and management head-aches. Typically a commercial syndicator will provide detailed information online and in print, and host events and webinars. Information you can expect in-cludes summaries of the invest-ment, market analysis, location economics, demographics, property description and condi-tion, comparisons of properties, independent statistics, current financial performance and pro-jected, tax issues, background of the principals, detailed fund disbursement schedule, property performance forecasts, and an exit plan.

Great Syndicators are Easy to Contactby Phone, Text or Email.

Expect answers to your questions within 24 to 48 hours with an attitude of openness and willingness to respond to everything a potential investor asks. While there cer-

tainly may be time limitations to invest, you should never commit your hard-earned money prior to establishing the ability of the syn-dicator to manage the investment with integrity.

The Wilson Investment Properties Difference

Today, Wilson Investment Prop-erties, Inc. offers highly selected turnkey syndicated commercial real estate opportunities as well as homes and multiplexes in Texas markets with strong economic fundamentals that have proven resilient through all phases of the real estate market.


SYNDICATION ADVANTAGESEnables Individual Investor to “Move Up to the Big Leagues”

• Ownership in high quality multi- million-dollar products for low cost of shares ($50K)• Take advantage of syndicator skills * Access to deals * Negotiations * Due diligence * Management• Greater asset class diversification• No liability beyond share ownership


INTERVIEW BY TIM HOUGHTEN

The firm’s CEO has been an industry leader and investor for five decades. Wilson Investment Proper-ties sources the highest quality products, provides total transparency, has a long successful track record, and the team that has the experience and skills to find, secure, and manage the products. They are a direct provider, not just a referral service like 75% of online sources. They invest in all of the product types and regions in which they sell. Wilson Investment Properties’ corporate headquarters is in Silicon Valley, with a solid team on the ground in Texas and is in full control of their directly-provided properties. Today the Wilson family still lives in Silicon Valley, but along with their peers, most of their capital is going to Texas real estate deals with attractive higher CAP rates and returns in partnership with fellow investors who prize ROI.

Discover more at www.TomWilsonProperties.com or call 408-867-1867. Listen to Tom’s weekly radio show at 2 pm Wednesdays on KDOW 1220am, San Francisco’s leading business radio station. Podcasts are available on the website, iTunes and YouTube.


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Winning in real estate is all about the numbers. Far too many real estate investors are sabotaging their results by focusing on the wrong metrics. Some of the most obvious blunders today may be blindly focusing on:• Number of hours worked• Number of Facebook followers• Re-Tweet counts• Deal volume• Number of employees

So as long as investors focus on gross revenue and great-looking properties, which an agent promises will go up in value the most they’ll be fine, right? No.

Remember the number one rule of investing in real estate – it’s all about “location, location, location.”

WANTED: GOOD PROPERTIES, AT FAIR PRICES, IN GREAT LOCATIONSThere can be properties on which the numbers ap-

pear to work all over the United States. Journalists >

INTERVIEW BY TIM HOUGHTEN

ANALYZE


The metrics that really make a champion real estate investment portfolio

ABOUT SENSEI GILLILAND

Founder of Black Belt Inves-

tors, Sensei Gilliland has been

featured on the cover of Real

Estate Wealth magazine, hosts

‘The West’s Top Ranked Real

Estate Investors’ Club’ – 12

ROUNDS, and has engineered

several highly popular trade-

marked real estate investment

systems. Sensei is the go-to

source for serious investors and

entrepreneurs seeking extreme-

ly effective, no-holds barred

training, investment properties,

and funding.

CONTACT INFORMATION:

Black Belt Investors

951.280.1900 or

www.BlackBeltInvestors.com

regularly publish various ‘top 10’ lists claiming to predict which markets may be the trendiest or see the most price appreciation over the coming months. Unfortunately, while many investors are diligently working the numbers on po-tential deals, are completing due diligence and inspections, and are obtaining insurances – they are missing the most important factors that can really dictate their success.

Just as the stock and re-tirement savings market is horrifically skewed based on tracking the wrong figures, or what the price to get in is to-day, many real estate promot-ers are advertising the wrong figures too. In fairness, this market appears to be 90% or more made up of individuals who have only gotten in since 2008. They may not know any better. Others are only focusing on filing their pock-ets today, with no concern for tomorrow. They are encour-aging the public to follow that plan too. Some are clearly heading off a cliff within the next 10 years, or less.

SENSEI’S PHILOSOPHY

I have a little different view. Making money today is great. Real estate can deliver on that. What’s most important to me is building a sustainable business, which will provide my family a sure stream of passive income, and assets which can stand the test of time to ensure they’ll always be taken care of in my life-time, and well beyond.

That means focusing on a slightly different data set than most. Specifically it means focus-ing on the numbers in the local market, not just crystal ball pre-dictions on a particular property.

SOME SCARY DATA EXPANDING

OUT THERE INCLUDES:

• Orlando, FL topping 177% on the affordability index, mean-ing it costs almost double the average wage to secure housing there• Yesterday’s hot cities, like Miami, now full with over 24 months of home inventory• The number of investors tak-ing out 10-year balloon loans on portfolios of rentals

What I want to know is:• How strong is the local econ-omy?• What direction is the local economy headed in?• How long will it last?• Can properties in this location continue to produce positive cash flow?• Will I be able to sell this prop-erty for a profit in the future?• What are my viable exit strat-egies?

While it is always important to pay attention to what you are buying, and to make sure the in-dividual investment makes sense, and is profitable, the location can be far more important. There are plenty of fabulous looking properties, which have fallen into ruins because the area burned out.

There are luxury estates and condos in ‘hotspots’, which have lost millions in equity. Then there


• Department of Labor• Black Belt Investors• CoreLogic

KNOW & GO…To invest for success in both the

short and long term, real estate in-vestors must know their numbers. More important they must know and focus on the right numbers. That includes intimately knowing the local market and its fundamen-tal trends. For myself and Black Belt Investors in 2016 that points to cities like Cleveland, Ohio for remote rehab investing. What does the data say to you? Where will you invest?

Sensei Gilliland, CEO of Black Belt Investors, is a regular con-tributor to Realty411. Learn about Sensei’s events, bus tours and more http://blackbeltinvestors.com

are average, bread-and-butter properties, which have delivered incredible cash flow over the long run, and have pretty consistent-ly tip toed up in value. This last group is the one I love the most.

FACT CHECKING THE FUNDAMENTALS

Numbers to use in evaluating a destination should include:• Job growth• Employment figures• Population growth• Taxes• Affordability

It’s also worth evaluating the innovative DNA of a given des-tination. Is this a city that has proven to be able to reinvent itself and fuel growth in spite of other macro-economic changes?

Let’s take the example of the

state of Ohio. For those that have been listening to the debates, Re-publican John Kasich states that Ohio’s economy was ranking nearly dead last, and has now been built up with over 400,000 jobs. That ranks Ohio number eight in the nation for job creation, and number one in the Midwest, according to Kaisch and Politifact.com. It’s also worth noting that Cleveland in particular is home to almost 30 colleges and universi-ties, and more than 60 hospitals.

So where can real estate inves-tors find the data they need to make smarter investments?

Data sources may include:• FRED – St. Louis Fed• FMA Data• Property Shark• Rent Café• RemoteRehabs.com• US Census Bureau

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The real estate indus-try’s largest hedge funds met to discuss the state of the rent-al housing industry

at IMN’s 4th Annual Single Fam-ily Investment Forum in Miami, Florida in May. I had the honor of attending this event as a panelist for the second time, and found it so information-packed, I wanted to share the highlights with you. The opening keynote was giv-en by John Bartling, the CEO of Invitation Homes. He explained that in prior decades, large institutional funds invested in apartments but

today, rental demand is stronger in single family homes.

Invitation Homes, also known as Blackstone, is privately owned, and boasts the second largest portfolio of rental homes at 47,572. The largest single family home rental fund is American Homes 4 Rent, which is publicly traded and currently owns 47,655 homes after merging with with American Residential Properties last Fall.

The third largest company is Colony Starwood Homes with 31,116 homes, also publicly traded. Progressive has

18,569 homes and is private.The top 18 institutional funds own

198,748 homes collectively, but the four largest funds own 144,913 or over 73%. Most of the remaining “big players” own less than 5,000 homes each.

While there’s been a lot of concern that these big Wall Street firms are buying up Main Street, the truth is that they only take up 1.13% of the 17.6 million single family home rentals that exist today.

Here are some highlights from the event that are important for mom and

Wall Street Hedge Funds Back to Buying Single Family Home Rentals?

Millennials, ages 18-34, are the larg est generation in the U.S., and will likely drive housing demand for years. The ave rage age for buying one’s first home is 31.

INSIGHT

By Kathy Fettke, Co-CEO of Real Wealth Network


pop investors to understand: Employment is at 5%, but does not include underemployment (part time and those who gave up). The labor participation is at a 40-year low, so some say real unemployment is closer to 11%.

Historically, housing booms have occurred when unemployment decreases from 6% down to 5%, but it hasn’t happened this time. Why?

They blame it on real wages, which are lower than they were eight years ago for the middle class. Income is not keeping up with home prices, making it difficult for the average American to qualify for a home loan. But people need to live somewhere, so they will rent instead of buy - but the majority prefer to rent a home rather than an apartment. That’s why hedge funds are choosing single family homes over apartments.

Millennials, ages 18-34, are the largest generation in the U.S., and will likely drive housing demand for years. The average age for buying one’s first home is 31. The peak Millennial age is 24, so there’s a good 7+ years of runway as landlords. But there’s a good chance their peak buying age will be older than past generations because these kids saw what happened to their parents during the housing crisis. They won’t be so quick to jump into homeownership, as they are the first genera-tion in decades to see a massive housing decline.

They came of age during the Great Recession, so they had trouble finding employment. Instead, they stayed longer in college, driving up more student loan debt.

When they finally graduated, most could only find low-paying jobs. Low income combined with high debt will make it tough to qualify for a home loan - so expect this generation to rent for at least a decade.

What will they rent? Millennials are known to love their pets, so they prefer to rent single family homes over apartments, where they can have a yard.

Rental demand won’t just be coming from the young and single crowd. The second largest generation - the Baby Boomers - currently represent the highest percent-age of rental growth!

Millennials, ages 18-34, are the larg est generation in the U.S., and will likely drive housing demand for years. The ave rage age for buying one’s first home is 31.

Plus, keep in mind that more than 10% of housing stock went to rentals even before the housing crisis, and our population is growing. These are just some of the reasons why we’re seeing rents climb nationwide.

Additionally, housing inventory is low in most markets because builders basically stopped building for about six years. Today, new home sales are flat – at around 500,000 to 600,000 – which is 1 million less than what’s needed based on demand and household formation. Builders simply are not taking big bets. They got wiped out in the housing crash. Today, they are focusing on smaller, higher-end subdivisions.

Foreclosure activity is way down. A normal market would see about 1% of property go into foreclosure. Today, it’s half that because recent loans have been solid. Lack of distressed inventory contributes to increases in home prices.

However, there are still foreclosures in the judicial states: Illinois, Florida, Massachusetts, and New Jer-sey. Banks are trying to move these quickly and are not attempting to fix them up. They just sell at auctions for cheap. These are primarily HUD homes and tend to be in very rough shape. Buying these homes is not for the faint of heart.

Cap rates on SFR normally are well below apartment



cap rates, but that isn’t the case today. For example, returns on SFR’s in Atlanta are 8%, much higher than 6% in apartments. But in Phoenix, it’s at par because home prices have increased.

In 2005 there were 12 million single family home rentals, but never before owned by large institutional investors. They flocked in after the mortgage melt-down once they saw the kinds of returns they could get.

Now that the markets are recovering, will the hedge funds leave? They took advantage of an opportunity, but will they move on and back into apartments?

The consensus was “no” and that this is just the be-ginning of an industry. During the last 5 years, devel-opments were made in the single family rental space that did not exist before with data sourcing, service providers, and improved software. The institutional funds paved the trail and now a lot of people under-stand the business - and continue to improve upon it.

Wall Street funds like the asset protection, cash flow, potential capital growth, leverage, tax benefits, and easy exit upon sale. They have discovered what mom and pop investors have known for years. As a result, the rental business is a very different industry than it was in 2006. Fortunately, it benefits everyone when property managers and rental services improve.

Where are the funds buying today? They say Hous-ton, Indianapolis, Chicago, Jacksonville and Birming-ham are great markets and still not overbought. They plan to buy about 1,000 homes this year.

Incidentally, those are the same markets where Real Wealth Network has REAL turnkey property provid-ers. Should mom and pop investors be worried that hedge funds are once again our competition?

No. Don’t worry. As I said earlier, institutional funds represent less than 2% of the industry and they are very targeted in what they buy. Individual inves-tors can actually do much better and get much higher yields because of our flexibility.

If you’d like a list of R.E.A.L turnkey, done-4-you rental property providers in the strongest markets, join Real Wealth Network, just like our other 24,000 mem-bers. It’s absolutely free, plus you’ll have access to our data and network of professionals. More importantly, we’ll tell you which areas and companies to avoid.

Want to learn more? Visit RealWealthNetwork.com for free education, mentoring and a strong, trustworthy network to help you learn more about your options and maximize your returns. We can help you find the best markets for investing, and introduce you to experienced property managers, turnkey income property providers, syndicators and highly reputable real estate agents nationwide.

• Obtain wholesale houses with equity • Obtain no money, no credit financing • Don’t buy houses retail - that’s ridiculous! • Receive local market intelligence & training• Meet local buyers, sellers & investing partners

Please don’t waste your time and money going to a “Get Rich Quick” seminar from a traveling pitch-man.

Network with LOCAL TEXAS Real Estate Investors who are getting started or taking it to the next level. Join the largest Real Estate Investor Network in TX!

Do you know what a REIA is? It’s a Real Estate Investor Association, and it’s where smart people go to:

TexasWEALTHNetwork.comRealty411Guide.com PAGE 28 • 2016 reWEALTHmag.com

PROBATE

Many real estate investors are looking for properties that can be renovated for a profit. Finding the right property at the right price, in a condition that it can be

easily updated, can be a real challenge. Add to that the tightening of the real estate lead market and your invest-ment business may see issues in the upcoming phase of the market. If you can find the right property, money can be made in renovating properties and reselling them. However, this profit is dependent on the price of the original prop-erty and many other factors. As you can imagine, finding the right property can be even more of a challenge if you have a limited amount of leads coming in. There are ways to find the best real estate leads for rehabbing homes if you know where to look.

Best Real Estate Leads for Rehabbing Homes

MONEY CAN BE MADE IN REHABBING

There is no doubt that money can be made by rehabbing properties. According to an article published by Tere-sa Mears, the profit can be relatively high. She writes, “Investors flipped 156,862 single-family homes in 2013, according to RealtyTrac, which defined a flipped home as one bought and sold twice within six months. The number of flips was up 16 percent from 2012 and 114 percent from 2011. The average gross profit for a completed flip – or more accurately, the difference between the first sales price and the second sales price – was $58,081.” In fact, investors are even taking advantage of higher-priced homes in metropolitan areas that yield a high profit and that are not a result of a foreclosure. Mears said, “Only 21 percent of those flips were foreclosure proper-ties,” according to RealtyTrac, down from 32 percent in 2011. And it has proved much more popular in some >

By Leon McKenzie

U.S. Probate Leads


cities than others. Home flipping was up 141 percent in Virginia Beach, Va., 92 percent in Jackson-ville, Fla., 88 percent in Baltimore and 79 percent in Atlanta. But it fell 43 percent in Philadelphia, 32 percent in Phoenix, 17 percent in Tampa, Fla., and Houston, and 15 percent in Denver. In 2013, there was a bigger increase in the flipping of properties that sold for $400,000 or more than in lower-priced prop-erties.”

FINDING THE RIGHT PROPERTY TO REHABCAN BE A CHALLENGE

Many investors who are just getting started in property renova-tion believe that they will have plenty of options and a large number of homes of which to choose. That is simply not the case. Real estate investors are seeing that leads in many areas are simply drying up.

Mears writes, “‘Investors have not lost interest in pur-chasing and flipping homes. In fact, now that we are seeing home price appreciation, they are more interested than ever,” Sheldon Detrick, CEO of Prudential Det-rick/Alliance Realty, which covers Oklahoma City and Tulsa, Okla., said in a RealtyTrac news release. “The challenge for many would-be flippers in our markets is a shortage of available inventory to flip.”

WHY ARE LEADS HARD TO FIND?

There have been fundamental changes in the market that have de-creased the amount of leads that are available for investors. One of the biggest changes is that is can be dif-ficult to get a mortgage to purchase a property. After the market drop

of 2008, banks changed their lending procedures and limited new mortgages to only those with the highest credit ratings.

The ripple effect in the market has been that people who own their homes, or who have a current mort-gage, are staying put. They don’t want to take a chance of not being able to get a mortgage for a new property. This has resulted in fewer homes for sale on the market in the majority of the United States. Instead of moving, many homeowners are simply renovating their own homes and adding needed space with extra great rooms and bedrooms.

Another reason that homes for ren-ovation can be difficult to find is that the foreclosure crisis has taken a sur-

prising turn. Instead of banks putting these homes on the market and selling them quickly at a discount, they are leaving their REO (real estate owned) properties on their books and ex-pecting to receive the current market value for these homes despite the fact that many have suffered damage and vandalism. Kimberly Palmer writes that even if you do find a promising pricing structure, you may still have issues with these homes, “The cheap prices do come with potential down-sides: Some homes have liens against them or mortgages associated with them, which can be inherited by their new owners.”

It can also be hard or impossible to inspect such homes in advance of their sale, which means there’s no time to check if the basement is flooded or if

the air conditioning still works.These types of unknowns are just

what can take a renovation project from profit to cost in just moments. Being able to fully evaluate a prop-erty is one of the best practices of purchasing a home for renovation.

With the difficulty in getting a mortgage and the shortage of leads, moving your business forward to complete renovations can be a real project.

The shortage of leads has been going on for quite a while and shows no signs of slowing down. Trey Garrison of Housing Wire said of the 2015 market, “As of March 31, near-ly 71% of homes on the market were stale, meaning they had languished unsold for more than a month,”

according to the latest report by real estate brokerage Redfin.

New listings shot up 9.2% last month, but the spring housing bounce is so far nowhere near big enough to satisfy demand. Nation-wide, the total number of unsold homes rose 5.3% in March to 2 million, but at the current pace of sales, that supply would be exhaust-ed in only 4.6 months, according to the National Association of REAL-TORS®.

Normally, the supply of homes on the market in most metropolitan areas would be much longer than just over four months. While it does sound like there is elasticity in the market, only having approximately a four-month supply of homes just isn’t enough. The result of not hav-


‘The shortage of leads has been going on for quite a while and shows no signs of slowing down.’

ing enough homes on the market can not only make it hard to find a home, but has resulted in increased prices on the homes that are available.

This, too, is not good news for those investors who want to pur-chase homes as increased prices can lead to decreased profits.

FINDING A HOME THAT MEETS REHAB CRITERIA

As investors look for alternate ways to create options in the real es-tate market, there are specific criteria that can help investors to succeed. Mears indicates that these are the most important factors:

• “Finding a good house at a low enough price to make the deal work• Finding reliable contractors to do quality work at a reasonable price• Finding money to finance the deal• Selling the home at a price that will cover expenses and provide enough profit to compensate for the time invested

These criteria are the ones that have the most impact on the success of your project. Taking the time to find a house that has a low price gives you extra room for repairs and additional space for profits. Having reliable, professional contractors is the key to ensuring that your renovation project is completed on time and within the budget needed. A good contractor can also help you to pass needed city inspections and permitting. Having a way to finance the purchase and all of the costs as-sociated with it is also a critical as-pect of renovation. Finally, finding a selling price that not only covers the cost of the property and the repairs, but also offers you a healthy profit is

important. These are criteria that can help you to profit. The most crucial aspect of this is finding a good home as a project in this market with few leads.

IS THERE AN ANSWER?

For those investors who want to purchase homes to rehabilitate, there are options that can save money and create opportunity. Knowing where to look for these leads is critical to investors who are serious about building their businesses. There are virtually untapped areas of the mar-ket that can help you to find prop-erties for your investment business. Probate, bankruptcy and divorce cases can provide you with amazing opportunities to purchase homes for a discounted price.

Probate properties are usually put on the market as a requirement by the court to ensure that bills asso-ciated with a loved one’s death are rectified. Guided by a court-appoint-ed Executor, this individual, usually a family member, friend, attorney or accountant, has the power to sell property.

Generally, the Executor is willing to sell property for thirty to fifty percent less than the current market value. This is due to the fact that medical bills, legal fees, funeral costs and taxes need to be paid in order for the probate to be closed and heirs to receive their share of the estate. Executors may also be exceptionally willing to sell property if they live out of state or far away from the property they are managing. This can create issues with property maintenance and upkeep.

Bankruptcy leads can be found as the result of court proceedings in which an individual is facing financial challenges. These sales can include everything from residential homes to businesses and commercial

property. If you find a bankrupt-cy deal that will work for your business, make sure to have your attorney review the documents the first time you complete this type of transaction. The verbiage required by the courts can be a little bit dif-ferent than traditional sales.

Divorce leads are another area where you can get great deals on homes to rehab. In fact, many times the court will order a home to be sold in order to complete the divorce, making both parties more than eager to sell the home at a competitive price. Be forewarned, though, that relationship issues may cause one party to refuse to sign to complete the deal. Have your attorney review the sale documents and ensure that you can remove yourself from the contract if there is a delay due to a disagreement between the divorcing parties.

WHERE CAN YOU GET PROBATE, DIVORCE AND

BANKRUPTCY LEADS? Knowing that these leads are available is one thing. Knowing where to find them is another. Luckily, there are professional ser-vices, such as industry leader U.S. Probate Leads, which can provide these leads to you. Specific to each county, these leads can be deliv-ered right to your inbox. Using a professional lead service can save you time and frustration in having to go to the courthouse, sift through leads and try to find the ones that will work for your business.

Contact us to learn about our flex-ible pricing and our quick delivery services. Call now or visit our web-site at www.usprobateleads.com.


July 18-20, 2016Hyatt Regency Newport, Newport, RI

Family Off ice & PrivateWealth Management Forum

“The Race for Returns”

For more information visit www.opalgroup.net

Real estate and mortgage fraud could reach a new peak in 2016. What are you doing to protect yourself?

PROTECT YOURSELF FROM FRAUD NOW

A Special Report By Tim Houghten


FRAUD

Data compiler CoreLogic predicts “2016 could reach highest fraud risk since the

crisis,” with some of the largest increases coming to some of the least expected metro areas. Mortgage and real estate fraud has been growing again for the last six years, and everyone needs to be on alert.

BACK, BIGGER AND BADDER THAN EVER

• In Q3 of 2015 Mark Zuckerberg was scheduled to face trial for real estate fraud.• A NYC crime wave involving stealing title to homes with fake deeds has resulted in 525 Depart-ment of Finance investigations as of February 2016.• A Portland real estate agent is accused of conning an 82- year-old woman into signing over her home.• Dozens of court cases were covered by the Mortgage Fraud Blog during the first six weeks of 2016 alone.• We discovered investors blatantly boasting of getting away with mortgage fraud on BiggerPockets.com.

Real estate fraud is a big issue, and it’s growing. Indi-viduals must not only com-plete their due diligence when purchasing property, but must remain diligent all of the time. Do not underestimate the risk. Unsuspecting property own-ers can lose their homes, and can still be on the hook for the entire mortgage. Yet, that pales in comparison to some of the

other consequences of being caught up in fraud. All real estate industry partic-ipants need to protect the business in order to preserve their future income and wealth. Perhaps scariest of all is when inves-tors become victims by being caught up in fraudulent activities. This permeates through all levels of the industry from borrowers, to REALTORS®, to mortgage brokers, bank loan officers, lawyers, title com-panies, appraisers, and even politi-cians and celebrities. These cases are now investigated by a vast number of agencies and special task forces who are pro-actively on the hunt for cases to investigate. These agencies include the FBI, Securities and Exchange Commission, and U.S. Secret Service. No shortcut is worth the penalties. Once charges are piled up including wire fraud, mail fraud, and bank fraud, some of which can individually carry

30 years sentences for each offense, individuals can easily be looking at a life sentence in real prison. We dug in, and interviewed frontline professionals who have to combat fraud, and keep their clients safe. Here’s what they said…

Combating Title Fraud in NYC

Dave Ratner of Sotheby’s International Realty in NYC says, “In New York, the buyer’s attor-ney orders the title. But the title companies should be vetted by the borrowers, as they are paying and receiving the insurance policy.”

STEPS FOR SAFETY

1. Not allowing for power of attorney on sellers’ side of the transaction.2. Verifying signatures and valid

forms of government issued identification.3. Pulling the most recent deeds prior to the transac-tion through a continuation search on the property.

Discerning Legitimate Help from Scams

Just as damaging can be property owners tuning out to phone calls and the mail, out of fear of fraud, and over-whelming amounts of noise. So how can owners spot the real deal when their loans are sold or transferred? Fuquan Bilal of National Note Group says “We usually send our borrower a shock package that includes a copy of original mortgage and note. Any assignments or allonges to prove the chain of title is complete and in

10 COMMON TYPES OF MORTGAGE & REAL ESTATE FRAUD IN 2016

1. Identity theft

2. Craigslist rental fraud

3. Wire fraud

4. Occupancy fraud

5. Title theft

6. Bait and switch

7. Money laundering

8. Falsified loan applications

9. Forced placed insurance

10. Extortion

order. The last assignment in the chain will be to our company and that’s our proof. It’s always good practice to record all of your Assignments and give constructive notice.”

Mortgage Fraud Trends

Tom Rydberg of 1st Advantage Mortgage which is licensed in FL, CA, AZ, IL, MI, and WI, says “Lender bait and switch can be tough to identify because there are many legitimate reasons for terms to change during the loan process. Online lenders who advertise dramatically lower rates than the rest of the industry should be a red flag. A history of consumer com-plaints is certainly an indicator to watch for too.” Additionally Rydberg notes that “Occupancy fraud continues to be a problem. But it’s not just borrowers claiming they plan to occupy a property when they really intend to rent them out. Now buyers who plan to occupy a property are stating they will be investments so they can use future rental income for qualifying.”

In the New Realm of Real Estate Crowdfunding

Gene Trowbridge, Esq. CCIM, CDEI, of Syndication Lawyers warns that “One of the largest areas of fraud I see is the sponsors of the syndication use the money of the investors before they break impounds and have the permission to use it. Not that they always use

it for improper purposes, but they use it before they have permission to.”

Staying Safe When Investing in Real Estate

Philip W. Boesch, Jr. of the Boesch Law Group says, “Fraud comes in many ugly disguises and each one has its own story. One all-too-common theme is when misrepresentations, and omissions of material facts, induce an investment in the first place. Insistence on a real Private Place-ment Memo, or on projections prepared by a successful CPA, are routine protections. But even built-in protections like that don’t guarantee that trustees or managing members won’t put their interests above those of investors. When a fiduciary engages in self-dealing, it may be fraud but it’s not always obvious or easy to catch. When you suspect things are going wrong, you can demand to inspect the records of the business under the ap-plicable sections of the Corporations Code. Better still to catch it before it happens -- we suggest that investor carefully review the Lexis-Nexis legal records and social media for anyone with whom you plan to do business.”

SEVEN QUICK TIPS FOR STAYING SAFE

1. Always stay protected with insur-ance, and title insurance2. Watch for classic fraud indica-tors and typical clues i.e. requests to money directly3. Use a credit tracker and ID theft protection service to stay alert to changes

4. When it comes to documents – if it is not true don’t sign it5. Always investigate who you are doing business with first via online reviews, public records matches, licensing board com-plaints, copies of ID, and verifi-able references 6. Always have a great real estate attorney on retainer, just in case7. Stay away from businesses with inadequate or non-existent security protocols for your sensi-tive information

What if I Suspect Fraud?

Fraud is extremely serious. Just being connected to a business or merchant who has been engaged in fraud can bring a lot of stress. If you suspect fraud run. However, before filing a complaint do make sure that your assumptions are accurate. An accusation of fraud can lead to businesses being shut down, many individuals landing in jail until they can prove they are innocent, and many children seeing parents dragged away in handcuffs at gun point. This alone will bankrupt many families and end their careers, even if they are later proven innocent. Ask questions and make sure you are clear about what happened first. Talk about it with a legal profes-sional. Then if you are certain there was fraudulent intent, do protect others, yourself, and the indus-try by filing complaints with the appropriate agencies and depart-ments.

“Lender bait and switch can be tough to identify because there are many legitimate reasons for terms to change during the loan process. Online lenders who advertise dramatically lower rates than the rest of the industry should be a red flag.”

Randy Hughes explains how real estate investors benefit from the use of land trusts.

Holding Title in a Land Trust or Limited Liability Company

STRATEGY

I have written a lot about the virtues of holding ti-tle to your investment real estate in a Land Trust, but confusion persists. Most attorneys advise their clients to title their property in a Limit-

ed Liability Company (LLC). The reasoning is that LLC’s give better asset protection than Land Trusts.

While it is true that LLC’s provide better asset protec-tion than Land Trusts it makes no sense to put more than one property in ANY one entity. Think about it, didn’t our grandparents tell us “not to put all your eggs in one basket?” What exactly does this mean?

When our country was primarily occupied by farmers (and many of them were chicken farmers), it quickly became common knowledge that when you were col-lecting eggs in the chicken coop you did not use just one basket. The reason why you used more than one basket was if something happened to that one basket (i.e you dropped it, stepped on it, something fell on it, the cows sat on it, etc.) you could lose ALL your eggs. With multiple baskets you could at least end up with something to eat.

This logic holds true with real estate too. If you hold the title to your property in any one entity (i.e. Land Trust, LLC, Corporation, etc.) and a claim occurs against one property it can infect/affect the other properties. This is just common sense, but since only 5% of the lawyers in the U.S.A. are asset protection specialists poor advice abounds.

Think about this logically. If you own five properties and they are all titled in an LLC and a lawsuit occurs against just one property... all the properties will be af-fected. Oftentimes in a lawsuit a judge will order that no assets be transferred by the “owner” (read: your LLC) even before the jury has rendered its verdict!

This means that you can’t sell or refinance ANY of the properties in your LLC until the lawsuit is over. Most lawsuits take years to resolve. Are you getting to see the picture here? I hope so. Furthermore, if you lose the lawsuit and a lien/judgment is recorded against the “owner” (your LLC) you have ALL your equity tied up (in all properties held inside the LLC) until a resolution can be negotiated with the Plaintiff. This puts you in a terrible negotiating position and you will likely be the big loser. You would also likely be restricted on your ability to transfer memberships in your LLC.

One of the benefits of getting older (and hopefully wiser) is experience. Not only your own personal ex-perience, but that of your peers. Over the last 44 years



Capitalizing on the opportunities out there, and securing deals to ensure a solid financial future is still reliant on the ability to obtain real estate financing.

AssetAvenue doesn’t just have the money, but prides itself on constantly opening up new in-de-mand loan products that enable investors to make power moves with loans that actually serve them well. So who is AssetAvenue and what do they of-fer? How are their solutions different from what the real estate investor has encountered before?

The New Avenue For Financing Real Estate Assets

AssetAvenue’s VP of Marketing, Jacqueline Thomas gave us the 411…

THE BACKGROUNDABOUT ASSETAVENUE

AssetAvenue is an online nationwide direct lend-er, offering real estate investor loans on rehab and rental properties in 44 states. They use technology to improve the way entrepreneurs borrow money for real estate investment properties. In addition, they partner with institutional capital providers that allows them to offer competitive rates and friendly loan terms. Their innovative online

EXCLUSIVE INTERVIEW

By Tim Houghten


platform and propriety data models enables them to deliver new bench-marks for speed, transparency and flexibility to borrowers and brokers; traditional banks and hard money lenders simply can’t compete. Their differentiator is providing borrowers with financing solutions that are completely transparent, top-notch customer service, and instant online quotes. They pride themselves in providing real estate investors with simple, quick and reliable online lending.

THE REHAB LOAN

AssetAvenue’s flagship loan product is their rehab loan. Some unique features of the fix-and-flip loan product is lower rates than hard money lenders, no junk fees, free quotes without doing a credit check, and 10-day funding. Customers like Scott Moore with BBS Development have high praise for AssetAvenue’s rehab loan, “I wouldn’t have been able to close and be awarded the property without AssetAvenue.”

THE 30-YEAR RESIDENTIALFIXED RATE RENTAL LOAN

Many income property investors haven’t been finding the love they expected when shopping for deals and investment property loans. Some lenders and turnkey property promoters have tried, but just haven’t been able to create a product that fits well. AssetAvenue is a mortgage lender specifically created to fund investors. Jacqueline Thomas tells us that the 30-year fixed has been in high demand. “It just makes sense,” she says, adding: “Our real estate inves-tors asked for a product that would expand their investment portfolio and we delivered. The new loan product is to finance the purchase of rental properties, including single-family homes, two to four multi-tenant units, condos, and townhouses.” Thomas further explains that rental loan approval is primarily driven by the property’s rental income, with minimal requirements regarding personal earnings. AssetAvenues’ unique features open up alternative capital and credit for entrepreneurs who are often rejected by traditional lenders.

IS THIS THE PATH FOR YOU?

Indicative transactions and references from others on the site reveal both real estate brokers and investors have found this channel extremely valuable, if not invaluable in saving deals that have run into challenges. In an industry with numerous financial resources running on impersonal automation, it’s evident that AssetAvenue truly listens and understands what it takes to set investors up for success. What’s going to be really exciting is seeing what loan program features this tech- savvy lender will roll out next.

For more information or to get a quote online, please visit: http://assetavenue.com

The rental loan approval is primar-ily driven by the property’s rental income, with min-imal requirements regarding person-al earnings. This unique feature opens up alter-native capital and credit for entre-preneurs who are often rejected by traditional lenders.


Changing the Game... 3DMediaTours.com ‘DRIVERS SEAT’ Media For Real Estate & Hospitality

3DVirtual Reality is going to change the way you shop for just about everything, and two independent TV producers are on the cutting

edge of making this happen. They’re using new media technology that captures spaces in 3D, effectively al-lowing consumers to feel like they are walking through a house, or viewing art in a gallery, or checking out a fitness club or hotel suite, all from the convenience of their computer or mobile device.

“This technology really excites me,” reveals Bary “Cutty” Cutler, co-owner of Marina del Rey-based 3DMediaTours.com. “Initially seeing it in use inspired us to expand upon our current independent media ser-vices of film and TV production.

With the advent of social media, internet and new progressive TV outlets, people are more accustomed to viewing their media in an engaging “driver seat” mode,

(rather than traditional passive viewing). “I knew the minute we implemented this technology it would be a game changer,” says Gregg McAllister, his partner.

So far so good, as the production team recently pro-duced multiple 3DMediaTours for Maui-based Royal Lahaina Resort, owned by Hawaiian Hotels and Resorts (HH&R).

HH&R President Tom Bell says, “I love it. It is a great sales tool for our website or when we are on the road talking to our accounts. We’re happy to be among the first resorts in Hawaii to use this game changing technol-ogy with the expertise of 3DMediaTours.”

The 3DMediaTours technology allows viewers to see a property from many different angles and elevations. The interior view allows the user to not only look up, down and sideways, but literally walk through the entire space either on their own with keyboard controls, or with the help of an automated walk-through tour featuring high-lights of the property.

So now visitors can not only see the room from one perspective, but from every perspective, including the view from their lanai or from inside the shower if the viewer prefers. There’s also a unique “dollhouse” view, which allows (roofless) overhead and angular views of an entire single or multi-level property from various eleva-tions.

Two Childhood Buddies Turned TV Producers Make Visual MagicBY LORI PEEBLES

TOOLS


“For REALTORS®, our product means ‘open house’ 24/7 for local agents, and especially for out-of-town clients in other time zones,” Cutler explains. We believe this makes a powerful tool as anyone whom has walked through the model, and later visits in real life, is clearly a well-qualified buyer. The 3D model can also be embed-ded into the REALTORS®, website or MLS sites.

In addition, techs at 3DMediaTours are constantly adding more features to the quickly evolving platform. A recently added feature allows them to “tag” items in any space.

When viewers run their mouse over the tag or tap it, a pop-up screen appears giving more details about the tagged item. Let visitors know the countertops are gran-ite, details on appliances or what type of wood the floors are made of...etc.

The fun doesn’t stop there, brand-new features include visitor analytics, allowing owners to track impressions, visits, and unique visitors over time, as well as the abili-ty to generate professional, schematic floor plans.

The user experience is completely unique. It’s not a photo nor a video. It’s totally immersive, putting you in the space with free will to move around it. Visitors can stay as long as they like and come back as often as they wish. “When businesses provide such rich content for their customers, they will tend to stay longer on the website. That has the potential of generating more sales. The great thing is the virtual experience stays the same whether viewed on an iPhone, iPad or other device,” says Cutler.

Virtual reality eye wear will further enhance the effect of virtually being in a space, (but is not necessary).

Cutler and McAllister say they originally ventured into this side of the production business because they


wanted to use their film and TV skills to provide yet an-other way in which to view real estate and other interior spaces, adding more clarity and detail to teach experi-ence. This filming duo has vast experience to crafting in all multi-media formats including video, photo... and also utilize the cutting-edge looks available from aerial footage drones. While a 3DMediaTour is something much more sophisticated and engaging than a photo or video, hi-resolution photos and HD video tours can be created from the product, all in one visit. This eliminates the need to hire multiple service vendors.

“We run a ‘boutique’ style operation, catering in great detail to our clients’ needs.,” says McAllister. “We will travel to your location, map out a production plan, then execute with precision.”

The two production partners have enjoyed making films together since elementary school when they would frequently borrow Cutty’s dad super 8 movie camera and make short films. The fun has continued for the past 40-plus years, manifesting itself in various music, film and TV projects. Recently one of their short films about the historic B&B ‘Venice Beach House’, was an official selection at the NewFilmakersLA film festival. Current-ly, they are working on a pro social reality show, editing episodes of their long-running syndicated educational TV show, as well as raising money for a documentary about the growing epidemic of cyber bullying entitled “WORDS HURT”.

In fact, the two believe strongly in giving back to the community and look for projects that allow them to do that. Some proceeds from their 3D shoots will benefit the WORDS HURT Foundation, an organization in which Cutler serves as national ambassador.

McAllister serves as Executive Director for the Mahalo Maui Project, which is committed to growing, harvesting and distributing organic produce to those in our commu-nities who need it most.

To engage these entre-preneurs about capturing your spaces or learning more about their charity projects please contact [email protected] or go to www.3DMediaTours.com or call 808-960-5721

Get Organized & GrowPropel Your Real Estate Deal Flow & Profits with PropelioArticle By Tim Houghten

How did Daniel Moore and Nate Worcester become the Mark Zuck-erbergs of the Texas real estate

world? How can he transform your real estate investment business? Propelio offers Texas real estate investors a new power tool for maximizing their profit potential, while preserving their most precious asset. Daniel Moore got his start in real estate investment in the pit of the foreclosure crisis, at just 23 years old, with little more than a truck full of determination. What he discovered in mastering the process of

wholesaling, rehabbing, and flipping houses has earned him (an accidental) role as one of new tech geniuses of the Facebook era.

Don’t Be a Victim of Your Own Success Many real estate investors quickly become vic-tims of their own success. With some hustle and a good strategy, financial goals can be blazed through far faster than expected. But that can lead to a totally new and unexpected problem. Moore says that once he began hitting 70 deals a year himself, he realized he was spending a lot of time being busy. The money was great, but where was the time going? Getting back to basics, Moore reviewed the data and realized that the bulk of his real estate profits where coming from just one of his strategies. Around this time the market had really begun improving, and many investors around the nation began complaining about being able to find viable deals with numbers that worked.

The Fastest Way to Get Comps in Texas While the Lone Star State has become very attrac-tive to global investors looking for value, affordable


deals, cash flow, and diversification, it also has a cou-ple of quirks. One of them is being a ‘non-disclosure state’. That means trying to get access to sold data can be tough and time consuming. During this time Moore was also trying to re-orga-nize and streamline his business. He tried out various lead management platforms and productivity tools, but they all came up lacking in some way, with some pretty serious flaws. So as any good pioneering entrepreneur would do – he found someone with the technology experience to build exactly what we needed to solve all of these

issues. This type of tech doesn’t come cheap. In fact, it would run at least a couple hundred thousand dol-lars to try and create custom software to handle these challenges. That’s when Moore partnered up with Nate Worcester. The result of their combined efforts is the most powerful real estate automation system ever created – Propelio. The tool, which now expands well beyond pulling comps in Texas and lead management, simply became too powerful and valuable to keep a secret. Now it’s a software service open to all investors interested in optimizing and upgrading their operations.

Discover the No. 2 Real Estate Lead Platform for Investors in Texas

“With the right platform real estate can be simpler, more productive and more profitable,” a modest Nate Worcester says. “We say no. 2 platform, because there may be something better, but we seriously doubt it. We haven’t found anything that comes close yet,” he explains. Going Texas big: In the first six months of being opened up to other investors Propelio clocked in over a 1,000 new users, just in Dallas alone.

Current and ex-panding features of the system include:• Contact man-agement

• Email and live chat support• Lead management• Texas comps• Texas lead lists• Real estate marketing tools• Probate and NOD lists within 24 hours of recording• Ability to scale a team with various levels of access• Deal alerts to identify substantial discounts on properties with your criteria

What Moore says really puts the icing on the cake and makes Propelio stand out from any of those soft-ware choices you’ve considered, is that this system offers a free trial – with no contracts. In fact, there is even a FREE FOREVER plan too. The co-founder says this makes the team constantly stay ahead of the game; proving the value every day so that they keep earning ongoing business. They’ll prove it works.

For those investors looking for a way to streamline their business, add more free time and level up their profits, check out their website at http://Propelio.com

“With the right platform real estate can be simpler, more productive, and more profitable”


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Telephone 559.326.2509 Fax 866.602.8892 zincfinancial.net California • Arizona • Colorado • Indiana • Michigan • New Mexico • Ohio • Texas • Washington • Tennessee

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A Real Lender with Its Own CashSpeed, Ease and Reliability!

This information is for use by mortgage professionals only and should not be distributed to the general public. All loans are made in compliance with Federal, State and Local Laws. This is not a commitment to lend. Loans made or arranged pursuant to a California Lender’s License. Loans

made or arranged in Nevada or Arizona must be represented and originated by a mortgage broker qualified to do business in that state.

A Real Lender

with its Own Cash

“Speed, Ease and

Reliability!”

We lend on distressed Real Estate Investments!

P R I VAT EMoney41152 Zinc Financial Remains Bullish in 2016

54 Building Your Pool of Private Lenders

58 REICredit.com: A Phenomenal Financial Resource

63 Patty Arvielo Rises Banks on the Hispanic Market

66 Private Money is Your Friend, Not Your Enemy

71 Investment Strategy: Discover Deeds of Trust

74 Hacking the Money: An Article by Fuquan Bilal

83 Valuations and Worthless Assets in Your IRA

86 Learn About the Lone Star Real Estate Expo

CONTACT US: 805.693.1497 [email protected] social, look for Realty411 updates on Facebook, Twitter, LinkedIn, Pinterest, Tumblr, Google+ & more!

Important Disclosures for Our Readers:The information and presentations provided herein do not constitute an offer or solicitation to buy or sell securities or real estate. Please be aware that real estate investing can be risky. Realty411, the publisher of Private Money411, is not responsible for any information provided and/or statistical data presented, and does not reflect the opinions, advice or research by us. Readers are 100% responsible for their due diligence, for all investment information and for all decisions with respect to any potential investment or transaction. 411 recommends readers seek the advice of a trusted attorney, broker, CPA and/or financial adviser before investing.

PRIVATE MONEY411 Cover: Patty Arvielo, photographed in Irvine, Calif., leads New American Funding to new heights. Read this exclusive cover feature only in Private Money411.

Below: Mingle with hundreds of active investors in California, Texas, New York, Florida and more important real estate markets. Join us to celebrate our new issue. Private Money411 will be hosting industry gatherings around the nation with a focus on private finance. For more infor-mation, please see our event listings at http://realty411guide.com or http://realty411expo.com.

CONTENTS


Join Us for Events Celebrating Private Money411 on Both Coasts!

Program Highlights:

• Up to 100% financing, for qualified borrowers• No pre-payment penalties• Loan amounts up to $1,000,000• Rates starting at 9.75%• No primary residence

Fees Vary. See website for pricing information

Telephone 559.326.2509 Fax 866.602.8892 zincfinancial.net California • Arizona • Colorado • Indiana • Michigan • New Mexico • Ohio • Texas • Washington • Tennessee

F I N A N C I A L , I N C.

A Real Lender with Its Own CashSpeed, Ease and Reliability!

This information is for use by mortgage professionals only and should not be distributed to the general public. All loans are made in compliance with Federal, State and Local Laws. This is not a commitment to lend. Loans made or arranged pursuant to a California Lender’s License. Loans

made or arranged in Nevada or Arizona must be represented and originated by a mortgage broker qualified to do business in that state.

A Real Lender

with its Own Cash

“Speed, Ease and

Reliability!”

We lend on distressed Real Estate Investments!

ALEmbraces 2016 with

“If it has a floor, roof, and some wood in between, we’ll finance it!”

BULLISH ADVANCE

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BULLISH ADVANCE

New Year, New Loan Deals, New Territory

Last year Realty411 broke the news of ZINC Fi-nancial launching two new investment prop-erty loan programs: the

Rehab Pro-Velocity and the Buy and Hold program. We recently caught up with Todd Pigott, president of ZINC Financial. During our conversation, he unveiled just how well investors had taken to these programs, plus he made several new announcements.

For 2016, ZINC Financial is rolling into new states, dropping interest rates, and even participating in Joint Ven-ture partnerships with select investors where ZINC will front 100% of the acquisition and rehab costs!

Fix & Flip for Less

ZINC Financial’ s president tells Re-alty411 that while much of the industry is head in hands, pulling out hair about the Fed raising rates, this mortgage lender has actually slashed interest rates for property investors. Pigott says the company has “lowered rates start-ing at just 9.5% for fix and flip loans, with as little as 1 point.” While these rates are reserved for well-qualified borrowers, rates this low are virtually unheard of for this type of funding.

As many investors have discovered, ZINC is extremely aggressive when it comes to financing distressed real estate. Todd says when it comes to approving loans, “the more distressed the better,” and “if it has a floor, roof, and some wood in between, we’ll finance it!”

2016 Bulls and The ‘Desirability Matrix’

As word has spread and referrals have poured in, Todd says business “grew 40% in 2015.” The Clovis, Cali-fornia-based lender anticipates another 50% growth in 2016. “Our funding is quickly approaching ¾ billion in inves-tor rehab loans.”

Todd Pigott shares much of the en-thusiasm for the US real estate market in 2016, as Realtor.com’s forecast. Re-altor.com suggests that while there will be some return to ‘normal’ this year, there is definitely reason to celebrate, and a high likelihood real estate will outperform last year. Todd sees “stable appreciation,” ahead, and perhaps even better than that. He reminds us that “interest rates and affordability have little correlation with any dampening of demand for American real estate.” In fact, as property prices grow and the market continues to perform well, historic data suggests we’ll only see a snowballing in transaction activity and

Rehab Lender ZINC Financial Embraces 2016 with

California-based direct rehab lender ZINC Financial charges into the market this year… By Tim Houghten

9 New States of LendingZINC Financial has expanded lending to: 1. CALIFORNIA 2. WASHINGTON 3. NEW MEXICO 4. ARIZONA 5. TEXAS 6. COLORADO 7. MICHIGAN 8. TENNESSEE 9. INDIANA

Todd says business at ZINC Financial “grew 40% in 2015”

demand.There is no question that ZINC

Financial is placing its capital where its predictions are. If lower rates, and new states, aren’t enough, just wait till you learn about this lender’s latest program…

100% Financing & Joint Ventures

Last fall, ZINC Financial piloted a new Joint Venture program for experienced investors. Those with a proven track record of successfully fixing and flipping houses can now use this program to ‘partner’ with ZINC Financial and obtain 100% funding for the acquisition and rehab of distressed properties.

Realty411Guide.com PAGE 53 • 2016 Private Money411

In my previous article, “The Benefits of Using a Private Lender”, I touched upon some of the outstanding advan-tages when leveraging

private lenders to fund your projects. In this article, I would like to do a deeper dive on this topic. One area that I see so many people struggling when trying to get their Private Lender program off the ground is attracting their initial lenders. Logically, if you’re a successful Inves-tor with many completed projects in your portfolio, typically, people are ready and willing to throw you money based upon your past successes. However, for the investors who are either new to the real es-tate business or to private lending, this initial start-up may come with its share of barriers. With that being said, let’s talk about one of the most successful strate-gies to gain the confidence of your new potential pri-vate lenders or to scale up current lenders to a higher capital commitment level.

Conducting Before and AfterOpen House Events

Conducting open house events before you start your renovation phase and then again when all of the im-provements have been made and you are in contract for sale will go a very long way in demonstrating your ability to select and manage a project.

This event is unlike the typical open house’s that real estate sales profes-sionals conduct. Below is a suggested outline to follow that has worked very well for us in our events:

Before Renovation Open House • Your background (if there are people who don’t know you)• Overview of your business model and goals• Tour of the property• Why you selected this particular property and location• Description of the planned work scope• Buyers objections you plan on cor-recting• Overview of the project schedulePurchase price • Overview of the financial assump-tions you have made going into the project• Marketing plans

After Renovation Open House• Tour of the property (have the before renovation pictures posted)• Summarize any challenges and surprises• Review schedule performance and plan• Financial performance to plan• Lessons learned (sharing what went right as well as wrong and how you plan on leveraging this into your next project can be very powerful!)• Marketing results

• Offer activity and negotiations• Contracted purchase price• Possible call to action (participate in your next project)

Consider a Formal Presentation Using the format above as a guide, you should consider developing a formal presentation perhaps in Power-Point or other presentation platforms; this will really give your event a more professional look. Alternatively, you can just provide them with a hard copy handout that you will go over. In the events that we have conducted, the financial aspects seem to hold the most interest and questions. Below I have included two slides that we use in our standard format presenta-tion. They will easily and quickly give your audience a view of the project performance at a glance. I will also review the root causes if there was a big variance between the estimated and actual numbers. For example, as shown below, the “Actual” rehab costs came in about $10,000 over estimated due to unexpected issues discovered which we reviewed. However, we highlighted that the reserve budget covered this overage.

Who to Invite to your Open House Events

In order to achieve the biggest impact from your event, you should consider inviting the following:• Current lenders • New lender or partner prospects• Your real estate agent• Your attorney• Your banker

Do a follow-up with your attendees After your events have concluded, it is critical to connect with the people who were in attendance.

Building Your PoolOf Private Lenders

By Carl Schiovone


This would be a great way to “get them to the next level”. In addi-tion, they may be able to provide you with feedback on what they would like to see in future events.

Capture these events You may also want to consider capturing these events by doing a video. Think about the possibilities of packaging these videos for your marketing.Planning your Open House Event Make sure to give people prop-er notification in order for them to attend and let them know that this event will last two hours (or whatev-er you have scheduled for) and that they should plan to be there for the duration. Remember, most people think about an open house as “stop-ping by” anytime during the sched-uled time window. You may want to have chairs and even refreshments available. Special caution when

planning the “Before Renovation” event, you don’t want to have any health or safety issues pres-ent. I’m sure you can appreciate that no-body would want to be sitting in a house invested with fleas or covered with mold.

Creating Your Process

As you complete your open house events, you should consid-er making this event part of your standard word and create tem-plate that can be used in future events. You can have a blank template that can be filled with all relevant pictures and data. Using this approach, it will make it much easier to plan your next event. In conclusion, the open house events can be a very powerful marketing tool in building your pri-

I can’t tell you how many times I have seen this play out with my students. Properly documenting your past perfor-mance in your Credibility Report will go a long way in securing new lenders.

““

Continued on pg. 80

The latest strategiesand techniques from leaders in real estate are at your fingertips!

INVEST INYOURSELF

DIGITAL &INTERACTIVEREIWealthmag.com

Financial Overview

Celebrate Our Financial Supplement and Learn from the Top Leaders of Finance in CA & NY.Private Money411 will host many important events in 2016.

Whether you are based in the West or East Coast, you will have the opportunity to network, learn, and mingle with

extraordinary finance leaders and speakers.

P R I VAT E 411SUMMER ISSUE 2016

Industry Leaders are Welcomeas Our Guests at Our Financial Events, Join Us!

Reserve Your Participation @805.693.1497

Explode your influence and connections in the financial services industry.

California and New York

P R I VAT E 411SUMMER ISSUE 2016

WEST - NORTHERN CALIFORNIAReal Estate Finance Summit in San JoseNetwork with the VIPs, Connect & Learn

EAST - LONG ISLAND & NYCReal Estate Expo with East Coast REIA +Join Us in Manhattan - with REIA NYC

Saturday, Sept. 17th - 9 amSaturday, December 3rd - 9 am

Money411Finance Conference

For information, visit REALTY411guide.com/events • 805.693.1497 • [email protected]

California and New YorkSaturday, August 27th - 9 amNetwork with Finance Leaders

In this interview with Bill Malone, we will learn the “Ins and Outs” of re-volving corporate capital as used for the purpose of real estate investments.

Private Money411: Thank you for taking the time to speak with us today Bill. We know that you are very busy at this time of the year. Bill Malone: Thank you for the opportunity to be in your publication, and share some knowledge about the unsecured corporate credit market and what it means to establish busi-ness credit for real estate investors.

REICredit.com is a Phenomenal Resource for Funding Deals.


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PM411: What kind of capital do you offer for real estate investors?Malone: We help our clients get access to unsecured revolv-ing lines of credit for their businesses that will report to the business credit bureaus, Corporate Experian and Commer-cial Equifax.

PM411: We hear people talk about business credit all the time! How are you helping clients understand business credit?Bill: Most people don’t realize that there are four main tiers of business credit. Most companies that offer business credit focus on the first three tiers, because they are easiest to obtain approvals.

• Tier 1 credit is credit issued from small business to small business. For example, if I own a shoe company and purchase most of my shoes from a small local wholesale shoe store, I might be able to get them to approve me for a $10,000 line of credit to purchase their shoes on net 30 terms. This means that I can purchase up to $10,000 of their shoes each month, and I must pay off that balance every 30 days. This kind of line of credit can be reported to your Dun and Bradstreet profile, and is a good way for you to establish your Paydex score. These accounts will not report to the personal credit bureaus, and may or may not require a personal guarantee.

• Tier 2 credit is issued from a large corporation to a small business. For example, store cards from BP, Home Depot, Lowes, Staples, or U-Line. A small business can get a line of credit from anyone of the companies above, and most of the accounts above report to Dun and Bradstreet. However, the spending on each of the accounts approved is restricted to the stores from which each of the cards was approved. These accounts may or may not require a personal guarantee.

REICredit.com is a NEW financial website for dealmaking. Learn more in this exclusive interview with Bill Malone, the CEO of REICredit.com. Malone is a specialist in the field of corporate finance; he has helped fund the investment transactions of hundreds of real estate investors.

For Example, a $30,000 BP card will allow you to purchase $30,000 worth of product from BP, but no other stores. (A BP card is typically suited for trucking compa-nies that have large monthly fuel expenses) These accounts generally do not report to the personal credit bureaus, and are good if you are looking to establish a Dun and Bradstreet credit profile.

• Tier 3 accounts are personally guaranteed business credit cards that report to the personal and business credit bureaus. The beauty of these accounts it that they can be spent

anywhere where credit cards are accepted. These accounts typically do not report to Dun and Bradstreet, unless you “self-report” them, which means you add the account infor-mation to your Dun and Bradstreet profile manually. The balances incurred on these business cards will affect the individual’s personal credit profile because these accounts do report to personal credit bureaus. If a business owner is having a high expense month on these accounts, then, the personal credit profile will be negatively affected. At REICredit, we focus on helping our clients establish Tier4 accounts, which are business credit cards that do not report to the personal credit bureaus. Our accounts allow our clients to separate their business expenses from their personal credit report. When clients work with us, we help them understand what is available in terms of business credit and what >

Most people don’t realize that there are four main tiers of business credit. Most companies that offer business credit focus on the first three tiers, because they are easiest to obtain approvals.


in real estate, our clients only need to apply one time to have ongoing access to capital through our revolving line of credit program. For example, an investor purchases a property, and uses our revolving accounts to finance rehab expenses. Once the property is flipped and sold, the investor can pay off the bal-ances on their revolving lines, and have capital immediately available to finance their next project. A majority of our real estate investors take advantage of their 0% introductory periods and can expect to receive addi-tional 0% interest offers on their accounts, after responsibly managing them for six months.

PM411: What if my investing company is brand new? Can I still get capital?Malone: Absolutely! A majority of our clients have brand new businesses. As long as our clients have an existing business and a strong personal credit profile, we can get them approved for real estate capital.

PM411: Do you require financials on the business or individual?Malone: Our program is completed on a stated income appli-cation. For clients, this means they do not need business tax returns or collateral to get approved.

PM411: How fast can clients get capital from you?Malone: Clients will be able to find out if they qualify within one business day. If the client qualifies and decides to pro-ceed with the approval process, they can expect to have their approved capital in hand within three weeks.

PM411. What can the capital be used for?Malone: The capital can be used for any business related expenses. Many clients use their approved lines to cover ev-erything from accountant payments, rehab costs, materials, education, fuel, office supplies, etc.

PM411: How important is it for a real estate investor to establish business credit?Malone: I believe it is imperative. Getting and establishing working capital is essential for any small business, especial-ly real estate investors. Over 200,000 new businesses are formed each year in the United States with half of them failing within their first five years. The U.S. Small Business Administration states the top two reasons for failure are: 1. Poor management and 2. Lack of working capital. Ensuring the success rate of any business requires reliable and obtainable financing, REICredit arms our clients with the working capital they need to succeed.

PM411: Thank you for taking the time to speak with us. Malone: It’s a pleasure. Thank you for the opportunity.

may be beneficial for them to establish for their particular company. Many business owners believe that they must build a Dun and Bradstreet profile before first, before they can get access to the top tier corporate credit instruments. By utilizing our network of lenders and high level banking associates, our clients are able to get approved for top tier credit quickly, even with brand new businesses. Real estate investors may not see much of a need for Tier1 through Tier3 credit. Having a $30,000 Staples card, for example, or a $10,000 line of credit from a local shoe store may not help a real estate investor finance rehab expenses. Our business credit program gives clients access to capital they can use for any business expense without affecting their personal credit profile. As an added bonus for coming through our funding pro-gram, clients are provided with a step-by-step PDF, which shows them how to establish their Tier 1 through Tier3 credit on their own, at no additional charge.

PM411: You mentioned that there is more than one business credit bureau. What are they?Malone: There are three main credit bureaus of which small business owners should be aware: The first one is almost synonymous with business cred-it—it’s what everybody talks about because it is the easiest for businesses to get access to, but, it might not be the most helpful for a real estate investor. And that’s Dun and Brad-street. Dun and Bradstreet allows businesses to get a D&B Profile number for free. After paying a quarterly fee for their credit builder program, businesses can begin reporting their Tier 1-4 accounts. This reporting is what helps establish the D&B Paydex score. The next two business credit bureaus are Corporate Expe-rian and Equifax Commercial. These reports are primarily used by local, regional, and large big-box retail banks. Just as it is important for an and individual to have a strong Experian and Equifax credit profile, a business should also have a strong Corporate Experian and Equifax Commercial report. Helping our clients build their business credit profiles with these business credit bureaus also allows our clients to get additional perks from other major lenders in the future, as their profile ages.

PM411: Bill, what type of terms are available with your program? Malone: We help our clients establish revolving lines of credit. This means the accounts can be charged up and paid off as often as the client wishes. These accounts come with a 0% interest introductory period for 6-12 months. Instead of applying and re-applying for new loans to invest


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Interview by Stephanie Mojica

Patty Arvielo commands the spotlight as one of the most influential Hispanic lead-ers in the finance world. For more than three decades, she has raised the bar high for women seeking success in real estate

investment. Arvielo, who co-founded New American Funding, a Tustin, Calif.-based company that employs more than 2,000 people, is also a frequent lobbyist to Washington D.C. Arvielo has also dedicated much of her free time to a variety of advocacy roles, including membership on affordable lending panels for Fannie Mae, Freddie Mac, and HUD, the diversity committee for the Mort-gage Bankers Association, and chair of the Corporate Board of Governors of the National Association of Hispanic Real Estate Professionals. We recently connected with Arvielo to discuss the changing world of the mortgage industry.

PATTY ARVIELORISES TO THE TOP

Continued on Next Page


Question: You’ve been in the mortgage industry for more than three decades. What would you say has been the biggest changes you’ve seen, especially in the last few years?

Answer: I think one of the biggest changes has been a level of awareness, among consumers and profes-sionals in this industry. This isn’t an every person for themselves world we live in, people are unifying their efforts – in the family, in the community, in the workplace - looking out for each other and moving forward as a group. Take social media for example, people are con-nected with one another in ways that didn’t exist a decade ago, and people are using these forums to be helpful to one another and look after the overall inter-est of the group. We share good experiences with one

another, we warn each other about bad experiences, and that’s the way it should be. I think we’re going to start seeing a divide be-tween business that stand behind something and those that don’t. Consumers and industry professionals are beginning to see that doing business isn’t just about the bottom line. If you’re not conducting business with your heart, people are going to see right through that. Consumers themselves are raising awareness and flocking to businesses with a common passion, and they’re diverting one another away from businesses they deem insensitive.

Question: Do you believe women are gaining larger places of leadership/respect within the real estate and mortgage industries?

Answer: We need more women in decision-making roles, and we need to see ourselves not just as lead-ers, but as mentors for other women. Women need to speak up, be assertive, and be confident that our voic-es matter. Our ways of doing things hold merit and we need to remove any hint of self-doubt that may exist. If we see a better, smarter, or more efficient way of doing things, we need to suggest it, and push to make changes in the way we conduct business.

Question: Do you have any particular mentors that you would like to highlight/thank?

Answer: I believe mentors change as you evolve, because different phases in life bring different chal-lenges. Wisdom can come from many sources, but I’m most grateful to my husband, Rick. He believes in me, he challenges me, and I trust him with every-thing. When I’ve approached a challenge from every angle I can think of, he’s shows me there’s another

Money 411


way to do things, there’s always another perspective.

Question: How has the scene for lobbyists changed in Washington D.C. (especially in recent years?)

Answer: The fundamentals of lobbying remain un-changed, we work toward fairness in our industry and we always keep diversity top of mind.

Question: What do you believe is the biggest miscon-ception about the real estate and mortgage indus-tries?

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Answer: I know that women and minorities in this business are critical to shaping our industry; from the way we communicate with our markets, to the prod-ucts and services we provide, even down to processing and operations. We need to have involvement from professionals in the industry that represent an array of backgrounds and perspectives. We have a lot of room for improvement toward making that happen.

Question: What do you enjoy the most about work?Helping people achieve the American dream of own-ing a home.a) your position at New American Funding: It’s incredible knowing that after just over a decade, my family has expanded by 2,000 people.W e really are in this together.b) your lobbying endeavors in D.C. – The work we’re doing to expand the box of credit for sustainable homeownership.c) your other work such as with Big Brothers Big Sisters and the National Association of Hispanic Real Estate Professionals–This is where we truly reap the benefits of all our hard work, we get to give back.

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Private Money is Your Friend...

YOUR ENEMY!

By Charlie Fitzgerald with Civic Financial Services

Firstly, in the spirit of full disclosure, I am a Private Money Lender. I decided to write this in an effort to bring some level of education and understanding to this topic, for those people that may be looking

for that. I am also interested in helping others to achieve their goals when it comes to real estate investments. I have been an investor myself since buying my first home in 1980. I have owned lots of properties since that time and I have been employed in the banking and finance industry since 1986 in some manner, shape, or form. For the last 16 plus years, I have been a Mortgage Broker, Mortgage Banker and Private Money Lender. I am currently an Account Executive for Civic Financial Services, offering retail and wholesale direct private money loans. >


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I believe there is a great deal of misconception about what role a Private Money Lender plays and I also believe more people should use this avenue as a pri-mary source for their real estate investment capital. In the simplest of terms, it’s the classic case of “OPM.”

OPM = Other People’s Money, and most of us have heard more times than we can remember that one should always use OPM to make real estate investments when possible. Doing so, does not come without costs, however, these costs are proportional to the benefit one may derive from using OPM. So, let’s look at some “Myths About Money.”

Myth # 1: “Private Money is too expensive!” No, SOME private money is too expensive. Additionally, using private money without making sure that you are recovering the costs of that capital in your investment is where most people hurt themselves. Money is no dif-ferent than any other “thing” you buy for use in your business. In the case of the Real Estate Investor, money borrowed, is used to buy property, in which we hope to earn a return (in up to 5 different ways) and so the cost of the money borrowed is just another “operating cost” of our business.

Myth # 2: “Private Money Lenders want me to default on my loan so they can take my property!” Not true. If we wanted property, we would just buy it to begin with. We make money with money…you make money with properties. Together, we both make money. Classic win/win. What a Private Money Lender really wants is for you to borrow our money, achieve your goals with it, pay us back on time with interest, and then do it again…

and again…and again.

Myth # 3: “My bank can do a better job for me than a Private Lender can!” Well, that depends on what makes you happy and how much time you want to spend getting the money you need. In today’s lending environment, bank loans are a very frustrating pro-cess…even when they go as planned. The Dodd-Frank Mortgage Reform legislation has inundated the lending industry with layers and layers of additional regula-tions and guidelines that quite frankly, have made it a complete mess for both the lenders and the borrowers.

Qualifying for a loan today is tough. Borrowers that seven to eight years ago would sail through the lending process, now are finding the process somewhat like being drug through a knot hole. In the real estate investment world, nothing is truer than “time is money.” Being able to move quickly and fund quickly and turn your money over quickly is the key. Private Lenders have the ability to fund a loan for a borrower in 4-10 days. That’s a far cry from the 30-45 days average for a conventional lender today. (After October 3, 2015…this will be even longer when the next major changes to the conventional lending regulations take place.)

If you are a real estate investor…I encourage you to consider using Private Money funding as an option to your own cash or other means for acquiring your properties and/or paying for the costs for rehabbing them (if applica-ble to your business model.) If I can answer any specific questions anyone has about this process, feel free to reach out to me.

OPM= Other People’s Money, and most of us have heard more times

than we can remember that one should always use OPM to make Real Estate investments when possible.


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Steve Bighaus has over 24 years experience in the mortgage industry. He maintains a focus on servicing the real-estate investor by offering aggressive financing options and resources for buyers interested in purchasing or refinancing their investment property. By concentrating on investment properties and the financing that comes with them, Steve is recognized nationally as an industry expert. The knowledge that he has enables him to find financing for people even when they have had difficulty elsewhere.

This is not a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant. Security National Mortgage Co. is an Equal Opportunity Lender.

NMLS#: 112825

Contact Steve BighausSenior Loan [email protected]

Attention Investors:Pre-Qualify Today!

It’s about time we show you

A REAL HEROClose your loan in as little as 30 days!

NMLS# 3116

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Private Industry AlternativeProhibited Investment

Many people ask why they have never heard of Deeds of Trust or

Trust Deed investing. Is this concept “New”? Not at all. I can remember my neighbor telling a story of how farmers in his home town who were unable to obtain a bank loan to purchase additional farm land would approach an-other farmer in the community to lend them the money. A contract would be drawn up and filed with the county recorder office. A third party would act as the es-crow holder until ownership title to the property is released to the borrower upon satisfaction of the debt. This was a common way to develop and construct in areas that were insufficiently serviced

by traditional banks.Due to the rise of real estate securitization in the 1990s and the

shift from “lend to hold” to “lend to securitize”, deeds of trust have become a common way for builders and developers to purchase real estate. Besides purchases, deeds of trust can also be used for loans made for other kinds of purposes, such as construction and develop-ment, where real estate is merely offered as collateral. Non-tradi-tional or indirect financing offers benefits for the borrower that is not met through traditional bank financing.

Banks are limited in the amount of money, or the percentage of their lending portfolio, that can be lent out for commercial construc-tion and development. Also, banks rely heavily on the creditwor-thiness of the borrower when evaluating loan requests. Trust Deed lenders effectively evaluate the borrower but focus on the collateral has a greater determining factor for a loan. Since these loans tend to be short-term, less than 5 years, higher rates can be charged and still be advantageous for the borrower when compared to the lengthy process involved to obtain bank financing, if a viable alternative.

Another primary reason for not hearing about Deeds of Trust investing has to do with geography and how home financing is executed. In 20 of the U.S. states the laws regarding financing of real estate purchased is regulated and facilitated under state agen-cies. These states use Deeds of Trust instead of traditional mortgage notes to execute home purchase transactions. In states that use deeds of trust, there are always at least three parties involved; the borrow-er, the lender, and a trustee who holds title to the property until the debt is paid. In the remaining states mortgages are used to facilitate residential lending direct from the lender to borrower. In mortgage states, the transaction involves two parties; the borrower and the lender. Should the borrower default on the loan, the lender must sue the borrower in a state court in order to take possession of the collateral property.

The term, Mortgage, is sometimes used when trying to explain Trust Deeds. However, the concept behind a mortgage and a trust deed are similar with some major differences. >

Deeds of Trust A Not so New Approach to INVESTING


STRATEGY

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Both mortgages and deeds of trust are essen-tially security instruments in the form of convey-ances. Transactions involving deeds of trust are normally structured so that the lender/beneficiary gives the borrower/trustor the money to buy a specific property. The borrower provides the money to the seller of the property; the seller executes a grant deed giving the property to the borrower; and the borrower immediately executes a deed of trust giving the property to a trustee to be held in trust for the lender. An escrow holder is always used to ensure all of the “pieces” are in place so that the seller gets their money, the lender is protected by the ability to assume ownership of the property through the “power of sale” clause (should the borrower fail to pay), and the borrower gets access to their property.

How does this provide investment opportuni-ty? By working with a company that underwrites deeds of trust, you can participate to be a lender without the hassle of underwriting the loan your-self. The company provides several safety nets by evaluating the borrower’s ability to pay, obtaining a property appraisal or broker pricing opinion (BPO), and ensuring title insurance is in place. Many companies allow investors to pool their funds together for a particular project offering the individual the ability to invest with smaller dollar amounts and be a part of greater overall invest-ment projects

Anyone wanting to participate in the growth of communities while receiving 9%-11% annual interest can become a lender (investor) on a trust deed by checking out www.ignitefunding.com and talking with one of our qualified Investment Agents. Ignite Funding is redefining the standard for investor-backed lending.

For additional information, please contact:Carrie Cook, President, Ignite Fundingph: 877.739.9053 - www.IgniteFunding.com

Money invested through a mortgage broker is not guaranteed to earn any interest or return and not insured. Before investing, investors must be provided applicable disclosure. Past performance does not guarantee future results or success. Ignite Funding requires a $10,000 minimum investment. • Nevada Mortgage Broker License #311, Arizona Commercial Broker License CMB-0922050, Cali-fornia Finance Lender #603J286


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HackingThe Money

By Fuquan Bilal, CEO, National Note Group

This is where we start with OPM (Other People’s Money). Even sophisticated investors with several million to put to work can benefit from

leveraging what they have. The world’s top individual investors like Warren Buffett and Donald Trump invest with other people’s money as the new rule.

And we’ve already seen how banks, mortgage lenders, and the largest hedge funds use other people’s money to make more money. And it just makes sense. By multiplying what you have with leveraging you can reduce risk, enjoy more diversification and safety, and amp up returns.

All at the same time. You’ve got to invest that money wisely and safely, with as much care as your own, if not more. But it can help you, and them too.

There are a number of ways to raise and pool funds. But before we dive into these, you’ve got to know your goals. And most importantly – your why. This is your compass.

Without your compass you are virtually guaranteed to end up at the wrong destination. And all it takes is to get off course by a couple of degrees and your destina-tion can be thousands of miles away from where you wanted to go.

SO WHY?

Why raise funds? Why invest? Why make more money?

Not that we should condone any of his actions by any means; but even Al Pacino’s character in the movie Scarface knew his why. Getting more money was just a means to an end. In this case it was to have more power and control over his life so that he could attract love and relationships. But he knew his why.

Too many fans of the film, and perhaps the populace in general today get hung up on the money. Just getting more money for the sake of it. And few remember >



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Attracting Private Money, Disclosing Risk, pg. 15

money is very fluid. And unless you have a plan it will flow through your fingers like sand. It is either depreciat-ing, or working for you.

So ask…How much money do I want to make? What will that money do for me, allow me to do?

Once we recognize that every single thing we do and say, and every single dollar that we spend or give away, is either taking us closer or further away from our why, the sooner we can begin to operate fully optimized.

This will all help you live intentionally, and get on the faster track to your goals. You’ll be able to pinpoint how much you need to earn in returns, and the investments you need to make to be able to achieve those returns and your goals. And you’ll be able to more effectively raise the funds to multiply all of this.

Traditional Leverage & Fundraising Channels There are many established channels for gaining more leverage to invest including: · Credit cards · Commercial real estate loans · Business loans · Personal and business lines of credit · Unsecured loans · Bank loans

While it is important to use credit wisely, it is one of the most powerful tools available to investors. Good, bad, ugly, overused, or underutilized, we all have credit. Again, this is one of those factors that is constantly either working for or against you. So make it work for you, wisely.

If you haven’t already this may be the ideal time to start developing business credit. Build credit for an LLC or other legal entity, which can leverage non-recourse loans, and separate your personal credit from everything else, while maximizing leverage capacity. Many will find that they can rapidly scale to wielding several million dollars very quickly.

RAISING FUNDS FROM FRIENDS & FAMILY

One of the best and easiest sources of OPM is the friends and family you are already know. Those that already know, like, and trust you.

This can be a highly controversial source of funding for some. But it can be one of the best and most rewarding. Some people rush to reach out to friends and family, and everyone in their old rolodex every time the get excited about a new way to make a dollar. Others are afraid to let their closest contacts down, put their most valued rela-

tionships in jeopardy, or to put their ego on the line. Both of these mindsets can be equally harmful, to everyone.

The Pros of funding from friends and family include:

· Efficient to raise · Fast funding to put into play · Zero hassle in qualifying · Great terms · A little patience & understanding when you need it · Helping those you care about the most

Most of us have had that one ‘friend’ that has an incredi-ble entrepreneurial spirit. They are filled with inspirational passion that overflows and bubbles over. Only they never stick with anything for long. Eventually, they only become your friend when they need early adopters or more cash. Yet, if you do really have something valuable that can help those you care about, you are really doing them a disservice but not turning them onto it.

Imagine one of your friends or siblings having the cure to a chronic medical condition you, your spouse, or children had, but they never told you about it. This definitely applies to finances. If you can help others not just achieve their nice-to-have dreams, but to provide the essentials for their family, secure needed health care and education for their kids, and give them the ability to provide for themselves through retirement and to spoil their grandkids, you must. You at least owe it to them to alert them to the opportunity.

THAT’S GIVING, NOT TAKING

The best way to cross this bridge is often just to show them what it is doing for you. If that’s something they are interested in replicating for themselves, let them know how they can participate. If that means investing with you, or investing in you, that’s not taking; that’s helping them. Still, whether you go over this out at dinner, around your own kitchen table, or in your office, make sure they are investing wisely too.

Relationships are priceless. Great ones are rare and take work to develop, but can so easily be ruined. Maybe you’ll begin by giving them a copy of this article to read, or help them get other parts of their mindset and finances aligned first. But at least for me; if I ever accept investment funds from people I know (or anyone for that matter) I tell them not to invest any more than they can afford to lose.

“While I am 99% confident in this investment, crazy and unexpected things can happen. So if giving me that much money to put to work for you is going to mean you don’t speak to me again if lose it – don’t do it. Or start with a smaller amount.” Protect their interests, do everything you can to serve them.

Hacking the Money, pg. 74


THE JOBS ACT AND CROWDFUNDING

The Jumpstart Our Business Startups (JOBS) act[2] came into play in 2012 and added a whole new dynamic to fundraising and investment capabilities.

Although the SEC is still clarifying and finalizing the finer points of the act and its various titles, the JOBS Act is empowering both organizers to raise funding from a broad-er cross-section of the crowd, and individuals to invest in a wider selection of investment opportunities. In some cases, such as in Florida, states have even paved the path and pre-empted further rulings by greenlighting expanded intrastate fundraising.

There has been a lot of buzz about the Security and Exchange Commission’s ruling on Regulation A+, which goes into effect in the summer of 2015. Regulation A+ has opened up the door for firms to launch ‘mini IPOs’ up to $50M far easier than ever before. It also tears down old restrictions so that regular individuals can be told about

investment opportunities and can invest in a wider variety of choices, even if they don’t meet the old ‘accredited investor’ requirements.

It’s really all about crowdfunding. Crowdfunding plat-forms have been gaining traction and evolving over the last few years. There are now well over a hundred crowdfund-ing website platforms ranging from donation crowdfund-ing via Go Fund Me, Kickstarter, and Indiegogo, to equity crowdfunding portals for startups, and specialized real estate crowdfunding options.

These online platforms make it ‘easy’ for individuals and companies to raise money. So far it has been used to fundraise for everything from eating burritos to the Hard Rock Hotel in Palm Springs.

However, while the websites and names are new, the concept certainly isn’t. Crowdfunding is essentially people getting together to fund things they care about, or which provide them a return for their investment. This has been done through various forms of partnerships, syndications, and groups for centuries. It’s been used to develop and control real estate since at least medieval times by kings and queens, and on a very small scale by families helping each other buy homes to live in.

When it comes to investing in debt and notes, various type of crowdfunding can be used. This could theoretical-ly include donation crowdfunding, establishing a niche

crowdfunding portal, friends and family, partnerships, REITs, and participating in, or even creating your own fund.

STARTING YOUR OWN FUND

Starting your own legitimate fund can be a great option for those serious about operating at the top of the note and debt investment field. Call it a fund, hedge fund, or becoming ‘the bank’; it’s a lot better than being a bank cashier, loan officer, or solo private money lender. It provides the ability to accomplish a lot more, negotiate better discounts, and get access to inventory individuals simply cannot.

However, this is a totally different league than just investing in individual notes or properties; though there is nothing wrong with that. There is a right fit for every-one. But there is a substantial difference in operations, responsibility, and legal and accounting requirements.

This is why most don’t even have this option on their radar. It’s why there are only a few thousand banks in the U.S., versus millions of real estate investors, and even more bank customers.

Setting up a multi-million or multi-billion dollar fund also requires a superior level of attention. It is not just a matter of filing an LLC online yourself for $100, and then hitting the ground running. Even though the JOBS Act has brought down many barriers, new regulations like Dodd Frank are continuing to make lending a murky and more regulated industry. It is essential to be on the right side of the law from day one, and have systems to keep your activities, marketing, and accounting in check. Just a couple of paperwork mistakes can cost you a cou-ple hundred thousand dollars, easily.

If you want to become a fund manager, and operate a fund, the first real step is to talk to a law firm that really specializes in this area. Securities attorneys and those that advertise help with organizing private placements are a good start. Saul Ewing is a large and popular firm in the northeast. They have offices throughout the major cities and business hubs of the region including Bos-ton, New York, Washington, Wilmington, and Harris-burg. However, it is important that new entrants to this landscape don’t burn all their resources before getting started. Do always get the best legal and accounting >

‘If you want to become a fund manager, and operate a fund, the first real step is to talk to a law firm that really specializes in this area.’


help that you can afford. Don’t throw away money. Wherever you are, there are bound to be firms in this

domain offering free workshops and free private consulta-tions. You may even run into them at local real estate and finance networking events, and investor groups, or even happy hour. If these attorneys charge $400 to $500 an hour, every conversation you have for free piles up the savings. They’ll help you drill into your action and to-do list, clarify costs, tell you what you can’t do, what you need a license to do, and maybe even provide some great insight into what is working for others, and may even turn you onto money leads.

Remember that you don’t have to buy everything they are selling. Just get what you need. However, if you plan to raise millions of dollars expect professionals to charge a substantial percentage of that for top-level assistance; that can run into six figures once you get going.

You’ll also want to do the same with great accountants, bank managers and others.

RAISING PRIVATE MONEY TOBECOME THE BANK

No matter which of the above channels you take to rais-ing money, you’ll need to get good at presenting, pitching, and closing. You need to be able to clearly present the opportunity that is available, your strengths, how it helps, and how you’ll keep their money safe. This applies whether you are walking into a local bank for a loan, approaching a venture capitalist, or even trying to help your friends and family enrich their lives with smart investments. So where do you start? What materials do you need? How do you create more opportunities to raise money efficiently? How can you avoid self-sabotage by putting your foot in your own mouth?

THE WARRIOR POSE

If you’ve ever practiced yoga, you’ll have seen the warrior pose. The warrior pose has several variations and advanced stages including the ‘humble warrior’. While a great warrior pose may be a feat in itself, it’s really used in the process of mastering one’s self, and increasing strength, balance, and flexibility in order to achieve even more in other areas of life, as well as more complex and advanced yoga routines.

Before rushing out to pitch private investors, or raise funds, it is crucial to get your pose right. This is your stance, mindset, and the core of the body that will deliver. When raising private money you have to have the right stance, and be equipped to efficiently and effectively both raise money and deliver on the promises.

There is a clear and glaringly obvious difference between

those that are trying yoga, or fundraising for the first time, versus those that have gotten some practice in. If you’ve ever tried yoga, you’ll already know all too well the wobbling, muscle contorting sensations, and visible clumsiness that comes as a first timer. And you wouldn’t pick an obvious first-timer as an expert yoga instructor would you? You want an instructor that looks and acts the part, and can help you get the same results. The same applies to investing, fundraising, and financial advisors.

So start by getting your stance right:Know your whyKnow how much you are going to raise, and by whenInvest in your education, and have the knowledge you needBe supported by a great board of advisors and team mem-bersDevelop great habitsCreate great branding and presentation materialsLook the partBe confident

You attract what you are. Money comes easily and fre-quently when you have the right stance and expectations.

Make sure you can check off the items above and you’ll find that money is far more abundant than you ever imagined. All too often the biggest challenge is that we simply don’t set our expectations high enough. I remember when I started out raising private money and sharing these concepts and invest-ment opportunities.

We began with requiring a minimum investment of just $5,000. In hindsight; that was ridiculously low. It meant a lot more work raising money from more people, rather than raising larger amounts from fewer people. Now having other sophisticated and experienced investors and money manag-ers call in eagerly wanting to invest six figures is just a daily occurrence that happens on autopilot. If you’ve invested in yourself, in your fund organization, and are achieving solid results, you should be confident. Never undersell, underval-ue yourself, and the value of your opportunity. That doesn’t mean letting your ego swell to gargantuan proportions. Just understanding how much value you really have to offer.

GETTING ORGANIZED

Beyond organizing and formalizing your fund or business in terms of legal structure, accounting, and team members, the following are some of the specific items and tools that can be used in raising money…· Business plan· Credibility package· Prospectus or investment opportunity presentation· Pitch decks· Website


· Blog· FAQs· An ‘elevator pitch’· Social media pages· Email marketing messages· Business cards

Three Keys to Successfully Raising Capital:1. Keep it simple2. Don’t oversell3. Pre-frame and win the capital before you pitch

Create good presentation materials, deliver them at the right time, in the right environment, never act desperate, be con-fident, and over deliver on your promises, and you’ll never come up short of funds.

PRE-FRAMING

Raising money isn’t about hard selling on the phone Wolf of Wall Street style. Some might do it that way, but I wouldn’t consider it to be the responsible or best way to go. If you are doing business right, and set up conversations well with good branding and deliver great results you shouldn’t have to ‘sell’. Their mind should be made up to do business with you, even before you have a serious conversation with prospec-tive investors. The ‘close’ should just be a matter of them finding out how they can give you money to invest, signing any agreements, and wiring you the money. Good testimo-nials, visibility, and online branding materials can all help accomplish this with ease. Then even when you do make new contacts they can do their due diligence on you in seconds from their smartphones, on the spot.

CREDIBILITY & PRESENTATION PACKAGES

Follow up conversations and communications will prob-ably involve sending credibility or presentation materials. These can take many forms such as pitch decks, printed prospectuses, or simply websites and emails. They should look good, answer questions, and give confi-dence to readers. But they need to be simple. These are tools to facilitate, simplify, and streamline the process. They are to create action. If you make it too complicated, confusing, and just raise too many more questions, you’ll only be taking investors further away from investing with you, or stall them permanently. Be transparent, overcome objections in advance, use infographics, and include FAQs, but keep it simple, streamlined, and keep up the momentum.

FINDING PRIVATE INVESTORS

So who do you present these materials to? Beyond the above fundraising channels; crowdfunding, friends and family, and institutional lenders, how do you find more investors to connect with?

There are millions of private investors out there today. Some are full-time angel investors. Others run family offic-es. Then there are simply regular individuals with cash they need to invest, and get better returns on. Some are already very wealthy, some are actively looking for opportunities like yours, others are average individuals that aren’t aware of these options, but need a way to get ahead financially.

Seven ways to find more private investors:1. Attending investment club meetings2. Starting your own local investment club or meet up3. Attending national events4. Google Adwords5. Blogging and other forms of content marketing6. Social media marketing7. Buying or renting lead lists

Nothing is really private today. We may not always love how much our lives are tracked by websites, and how often that information is shared. But it can be really handy when you want to find private investors. There are mountains of data out there. It can be filtered and overlaid to help laser target those that are a great fit for investment opportuni-ties. Between credit bureau data, social media profiles, and Google alone there is enough data to identify individuals by how much they earn, how much they are worth, where they are, and the types of investments they like. You can even find out their favorite brands, bands, how much they owe on their mortgages, and where they bank. These lead lists can be bought, borrowed, and rented for direct mail, cold calling, internet, and email marketing.

For both these new contacts and existing ones, make sure you put all their contact information to use to follow up. Do so by email, phone, mail, social media, and in person. Organize this. Personalize it. Automate it! Optimize your time and conversion rates by automating emails, social media, direct mail, and other contacts so that once a contact is made they are followed up with until they invest and refer others. And don’t stop there. Maintain contact with all of your regular investors, vendors, and strategic business partners. This can help generate a lot of repeat business and referrals.


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vate lender pool. Just think about the response from your audience when you can successfully go through the project life and be able to demonstrate your performance results; this will instill confidence from your peers and the people you are trying to secure as private lenders or partners. In addition, they will appreciate your transparency and hospitality in sharing this information. There is another factor to consider. The happier your private lenders are with your performance and their invest-ment return, the easier it will be to bring them to high-er level of commitments and ask if they could bring in other people they know. Talk about free marketing! I want to wish you the best of success in rolling out your private lender program.

Carl Schiovone is a Performance Coach with over 33 years of experience as a Real estate Investor and REALTOR® and is President of Carl Schiovone & As-sociates Real Estate Coaching Inc. In addition, Carl is the President of East Coast Real Estate Investors Association located in New York. Please feel free to

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Self-Directed IRAs are a useful tool for retirement savings. Like any good tool, it works best when you know how to work it. From time to time the investments our account-holders make go bad. It happens. Risk is always a part of investing. When this

happens what should you do? It’s not just a matter of sending an e-mail to your cus-todian saying the asset in your Self-Directed IRA has no value. The IRS is going to want proof that it’s valueless. Your Self-Directed IRA custodian cannot determine the value of your assets. You need a third-party valuator’s professional report. We had an account holder (we’ll call him Fred) with

such an asset. His IRA made a Note and the borrower did not repay the debt. After quite some time (and after receiving no account fees from him) we advised Fred we would distribute the asset to him at the last known value and close his account. Imagine that: Being taxed for the full value of an asset when that asset is actually worthless! Truth is, he wanted the account closed so this seemed to solve a problem for him, but the problem was not solved. The rules are clear: Assets must have a fair market valuation when taxable events occur. To get this kind of valuation you need to seek the help of a valuator. If the asset is real estate then often an appraisal will do. In lieu of this kind of third-party authenticated value all >

Valuations & Worthless Assetsby Kaaren Hall, President of uDirect IRA Services


we can reasonably do is use the last known value. Keep in mind that the valuator needs to be “independent”. Using your personal CPA for the valuation is usually not considered to be independent enough. Additionally the report itself must have supporting documentation and computations attached to the report. Fred did not want to have his IRA pay a valuator to have the situation properly handled. He put himself in a very bad position by not spending the money. The IRS will likely send him a nasty letter telling him that he owes taxes (because assets were distributed and 1099’d at the last known value). Next Fred calls the IRS and they tell him to have the custodian correct the 1099. We won’t correct the 1099 because no valuation was received (and in this case no fees either). The IRS is not likely to take his word for what the value currently is. In fact they likely will not care because of crossing tax years. They will tell our account-holder to prove the Note was worthless back at the time it was distributed. That usually requires foreclosure/court documents or a valuation. So, Fred gets caught in this endless loop. Bottom line is that the possi-bility of needing a formal valuation of your assets should be factored in as the cost of doing business with a self-directed IRA. In fact, we in-clude this information on the account agreement. In the end Fred wished he had spent the money for valuation up-front instead of after his asset was disbursed and he was facing a taxable event. After some time he understood

a valuation was required and why it was required. Fred said, “Thanks so much Kaaren that was quite helpful. If there’s any way you could resend the name of the company you use for proving a zero value, I’ll get on this and get everything wrapped up. I’m so sorry for the trouble and the delay.” Valuations aren’t just for worthless assets. Each year all Self-Directed IRA account-holders are required to provide a value for their assets to the custodian holding their account. Keeping these valuations up-to-date annually is important because we use that information when we report your account value to the IRS each year (on a Form 5498). Any time there is a taxable event in your IRA such as a Roth con-version or a withdrawal, the IRS is going to want proof of the asset value as well. A good valuator is a self-directed IRA’s best friend. We at uDirect IRA Ser-vices can certainly help you find one.

~~~~~~~~

Despite being in the midst

of a recession and mortgage market collapse, Kaaren Hall founded and made a resounding success of uDirect IRA Services. The single mom discovered a strategic way to put her 20 plus years in mort-gage banking, real estate and proper-

ty management to use. The solution was an untapped market for both her skills and for investors – self-directed IRAs. Because self-directed IRAs can have a dramatic impact on retirees’ quality of life, Hall brings her full passion to educating Americans about the little-known investment ve-hicle. She has educated tens-of-thou-sands of investors and professionals on how to build wealth by taking control of self-directed IRAs. She says, “Financial literacy is not taught in schools, but our future depends on understanding it. Only about 4% of U.S. investors have a self-directed IRA. Why? Because most investors and many advisors simply aren’t aware of it.” Prior to her years at Bank of America, Indymac Bank and Hall’s own mortgage brokerage experience, she was an on-air news and traffic

reporter and radio host. Now Hall broadcasts how to invest IRAs in real estate, land, startups and more. She takes pleasure in demystifying the subject via webinars, YouTube videos, live events, social media and her free weekly newsletter. Through uDirect IRA, she has guided

thousands of Americans through the process of diversifying their invest-ments using self-directed IRAs. Learn more about Hall and her thriving company at uDirectIRA.com

THE RULES ARE CLEAR: Assets must have a fair market valuation when taxable events occur. To get this kind of valuation you need to seek the help of a valuator.



LEARN FROMTHE TEXAS’ EXPERTS

The Real Estate Leaders of the Lone Star State Share their Secrets of Success;

These Tips are Applicable Nationally.

Don’t miss the opportunity to learn from top investors who are actively investing

in the Texas market! Many renowned speak-ers from throughout the country joined us for our first Lone Star Real Estate Expo: Dennis Henson, Dr. Dolf de Roos, Tim Herriage, Brad Sumrok, Arnie Abramson, Tom Wilson, John Jackson, Merrill Chandler, Randy Hughes, Todd Dotson, Reggie Brooks, Rebecca Rice, Jim Beam, and many, many more. Don’t miss this exciting one-of-a-kind expo in Arlington!

LONE STARReal Estate Expo

Arlington - Nov. 12thWhere Leaders Share their Secrets!

Successful Investors from Around the Country Unite for ONE DAY in Texas!

FOR VIP TICKETS: 805.693.1497

Dennis Henson

Tom Wilson

Brad Sumrok

Arnie Abramson

JimBeam

TODD DOTSON

PLUS SO MANY,MANY MOREEDUCATORS!!

The Lone Star Real Estate Expo raises funds for charity again in Arlington with a new expo November 12th.

NETWORK, LEARN, GROW

Merrill Chandler

Chris Clothier

The Lone Star Real Estate Expo is Expanding! To learn about this event, visit Realty411Expo.com/TX

LONE STARReal Estate Expo

Arlington - Nov. 12thWhere Leaders Share their Secrets!

Scenes from Our First LONE STAR Real Estate Expo

Discounted Tickets Available@ Realty411Expo.com/TX

Big State, Big Expo - Mingle & ConnectNetwork - Learn - Expand

Reserve Your Exhibitor BoothFor info: 805.693.1497

Unite with Local and National Investors! On Nov. 12th, ARLINGTON is the is the place to be.

We had the pleasure of hosting Dr. Dolf de Roos for our last two events in Arlington & Houston!

The Lone Star Real Estate Expo is Expanding! To learn about this event, visit Realty411Expo.com/TX

Once you’ve experi-enced the perks of being a real estate investor you’ll never

dream of wanting to do anything else again. So how can you become permanently ‘unemploy-able’ by harnessing sustainable, highly effective real estate strat-egies, and mastering the Texas property market?

We recently caught up with Shenoah Grove of Texas Wealth Network to find out the answer.

THE PREMIER REAL ESTATE INVESTOR

ASSOCIATION IN TX

Along with her husband Phill Grove, Shenoah operates seven Texas REIA groups, with a network of over 15,000 inves-tor members. Monthly meetups hosted by the Texas Wealth Network are held in:

• Austin• Houston• San Antonio

Strategies for Becoming Permanently Unemployable

THE TEXAS’ EXPERTS

• Dallas• DFW

Events are regularly attended by over 100 local investors, as well as an array of local vendors, and lenders.

UNEMPLOYABLE & LOVING IT

Phill and Shenoah Grove have been “unemployable” and loving it since the early 2000s. They love real estate, the lifestyle they have achieved, and are passionate about sharing the keys to their success with others.

Once you’ve been your own boss for long enough, and do well at it, you reach a point where you are too qualified, too independent, and often too wealthy to work for anyone else. Some have crashed and burned and have cringingly tried to crawl back to the work-place, only to find they are too intimidating for employers to bring in. Others just can’t ever imagine a scenario in which they’d work for

anyone again.The Groves have dedicated

themselves to being lifelong edu-cators and students of the market. Shenoah shares that “we do what we teach, and teach what we do.” A big part of that is “recognizing that when you stop learning, you start failing.” In order to proudly maintain your ‘I’m unemployable badge’, Shenoah explains that like Wayne Gretzky, “You must always be skating to where the puck is going to be.” That will ensure you will “be successful in all the years ahead.”

AN UNCONVENTIONAL APPROACH

“If you want different results, you need different strategies”

In order to create and maintain uncommon achievements you’ve got to take uncommon actions. Shenoah Grove lives this out on a daily basis, and together with Phil has developed a powerful formula


THE TEXAS’ EXPERTS

for their events, which ensures Texas real estate investors have a superior advantage in this arena.

TEXAS EXPERTS

The first, and perhaps most star-tling aspect of this approach, is the commitment to specializing in, and staying loyal Texas. There are a lot of ‘gurus’, speakers, salespeople, and websites out there trying to sell property in TX, and around the nation, and globe.

Many really don’t know what they are selling, or don’t have the framework to really manage that well. In spite of being offered opportunities to branch out, or to

partner up with out-of-state vendors, the Groves have stayed committed to their ‘tribe’ and provid-ing an elite level of “tribal knowledge and service”, which simply can’t be beat.

12 STRATEGIES

At each investor event there is time for meeting vendors expo-tradeshow style, networking one on one, tuning into a keynote presentation

In order to proudly maintain your ‘I’m unemployable badge’, Shenoah explains that like Wayne Gretzky, “You must always be skating to where the puck is going to be.” That will en-sure you will “be successful in all the years ahead.”

from a great speaker on real es-tate investing, creative financing, and marketing, as well as trading leads and deals. Then there is a market update, which digs into the “data and leading indicators”, which show where the market is headed over the next six months.

At these events, investors will learn the 12 different real estate investment strategies for finding deals in all phases of the market (up, down, and sideways), while empowering investors to make money on every lead, maximize marketing ROI, and finding a solution to match every situation.

Check out the schedule of up-coming events, and how to get two FREE TICKETS at:http://texaswealthnetwork.com


Professional Asset Management & Sales«««««««««««««««

Property Research « Property Acquisition « Property Renovations

Property Management « Marketing and Leasing

Call Pam Blanco Nowto get a Free Portfolio & Market Analysis

817.907.7347www.pamtexas.com

Real estate investing has the reputation of being a great way to acquire wealth,

and the interest in learning how to become a real estate investor is growing!

Here are some Getting Started Questions to help you before mak-ing your first offer.

Many of the publications and arti-cles on how to get started investing from real estate gurus are vague and confusing. Trying to learn to invest in real estate out of a book is possi-ble, but it is also very difficult.

One of the biggest problems new investors encounter is they do not even know what questions to ask in order to get started.

The famous author Rudyard Kipling, in one of his most quoted poems, once wrote:

“I kept six honest serving men,They taught me all I knew,Their names are Why and What and When,And How and Where and Who.”

As with many other things - these questions will also guide you well within your quest to learn how to become a successful real estate investor. Let’s take a closer look at each one.

WHY? Why do you want to start investing? The answer to that question will go a long way in determining the degree of your suc-cess. If you have a strong enough WHY— you will be able to contin-ue, and endure when the inevitable problems arise. Many, without this

strong sense of purpose, will falter, and quit at the first signs of trouble.

WHAT? There are many —WHAT— questions that will need to be answered. What are your goals? What are your criteria for the proper-ties you want to purchase?

What techniques do you plan to use to locate good property investments? What system or software will you use to determine the optimal amounts to offer for properties?

WHEN? When do you plan to pur-chase your first investment property? When will you be able to devote your time and efforts to the numerous tasks involved in the investment process? When will you make the time to study, and acquire the massive amount of knowledge you will need in order to become truly successful in the real estate investment business?

HOW? How will you fund your property purchases? How will you find all the information needed in order to make informed offers? How will you market your properties after the purchase? How will you deal with tenant problems?

WHERE? Where will you set up your office? Where will your farm area be? Where will you get answers to the many questions with which you will be faced? Where will you find the educational materials you need to study and learn? Where will you find the help you will need to run your business?

WHO? Who will do the fix-up,

and maintenance on your properties? Who will manage them? Will you manage them yourself, or do you plan to hire a management company? Who will answer the legal, financial, and tax questions you will surely have? Should you enlist a mentor? If so, who? Who will you turn to if the mar-ket goes south?

As you can see, there are many questions that need to be answered be-fore you will be able to find success in real estate investing. The good news is, the answers are readily available to you if you take the time to seek the wisdom needed for success, and the rewards of that success can be wealth, and riches beyond your grandest dreams!

I trust this article will help you in your quest to build wealth through real estate investing. For more articles on real estate investor training, visit my website at http://dennisjhenson.com. Also, on that site, you may sign up for free reports, articles, e-books, free forms, documents, MP3 down-loads, and much more.

Have a GREAT Year Investing!

Dennis HensonFor a great real estate investing tool visit http://dennisjhenson.com

Getting Started Questions by Dennis J. Henson, President of Vanguard

Marketing & Investments, Inc.

Dennis Henson and his wife, Norma, who is instrumental in running AREA.

Professional Asset Management & Sales«««««««««««««««

Property Research « Property Acquisition « Property Renovations

Property Management « Marketing and Leasing

Call Pam Blanco Nowto get a Free Portfolio & Market Analysis

817.907.7347www.pamtexas.com


When it comes to investing in real estate they say “hindsight is 20/20.” What if investors could leverage both the insight of the industry’s top minds and

their proven best practices?Instead of watered-down seminars and endless up-

sells, could this be achieved by taking a page out of a winning playbook? Or, instead of general theory, what if ambitious investors could literally tap into the same resources as the industry’s leaders? How much of a difference would that make in getting to real results, fast, and predictably achieving investment goals?

TIM HERRIAGE: Tactician, Intelligence Analyst, Business Developer, and CEO.

Don’t call him a ‘guru’...

Tim Herriage is the CEO of the 2020 REI Group of Companies, and in an exclusive interview with our magazine, Tim revealed the backstory that led to the launch of a very different type of real estate firm... Why do we need another player on the real estate map? What qualifies Herriage and his team to lead? How can this hindsight become a truly unique advan-tage on the financial battlefield?

After serving in the U.S. Marines, managing sys-tems as an intelligence analyst, Herriage got his start in real estate through house flipping and property management. To date he has been personally involved in more than 1,200 house acquisitions and “over $1 billion in real estate investment transactions.” It didn’t take long before Herriage became a sought-after speaker within the industry.

His next step was to unite the ranks of U.S. in-vestors by founding the REI (Real Estate Investors) Expo. Dubbed ‘The Largest Real Estate Investor

Tradeshow’. In 2013 Herriage was recruited by the largest alterna-

tive investment firm in the world – Blackstone. As Man-aging Director for Blackstone’s B2R Finance, Herriage helped pioneer a new approach to single-family home investment property financing. This venture highlighted how great the need there is for approachable, high-quali-ty financing sources and expert guidance for non-institu-tional, private real estate investors.

Herriage explained that “it was a case of supply and demand. Investors are starving for practical, high-level assistance and straightforward access to great products and services.”

They simply weren’t finding it, mostly because those designing the real estate investment loans and services were institutional New York City banking executives who were detached from both their market and customer base. Herriage, on the other hand, knew how to trans-form the Wall Street approach into financing sources and services that actually work for the Main Street real estate investor.

He has, after all, succeeded by being one himself. Herriage began formalizing his systems and growing his team in order to bring a range of real estate investor services and financing solutions that provide maximum benefit and value. The result is… The 2020 REI Group of Companies. 2020 REI Group is comprised of five companies, that cover six core focuses:

1. Elevate Private Capital for providing nimble, trans-parent real estate investment opportunities that leverage local level expertise not found in most traditional large Wall Street institutions2. 2020 REI Finance for guiding and connecting real estate investors to the best financing solutions for their individual financing needs

TIM HERRIAGE On Tactical Investment,

Strategic Planning & Eagle-Like Vision

Realty411Guide.com PAGE 92 • 2016 reWEALTHmag.comContinued on Next Page.

THE VISION FOR 2020 IS TO NOT ONLY DELIVER THE HOW-TO-KNOWLEDGE INVESTORS NEED TO SCALE AND ACHIEVE THEIR INVESTMENT GOALS, BUT THE TOOLS AND SUPPLIES TO GET IT DONE, SWIFTLY.

3. H&R Acquisitions for sourcing and renovating dis-tressed and undervalued properties4. Investable Realty for specialized real estate investor brokerage services5. 2020 REI Consulting for real estate lending, sales and business strategy consulting and advisory services6. DFWInvestors.com a community of both accom-plished and aspiring Dallas-area residential real estate investors

The vision for 2020 is to not only deliver the how-to knowledge investors need to scale and achieve their in-vestment goals, but the tools and supplies to get it done, swiftly. We’re all familiar with the book franchises, late night infomercials, seminars, and $40,000 coaching packages that are out there.

All too often individuals spend months and tens of thousands of dollars spinning their wheels, and still have nothing to show for it. Often they are lost in terms of how to put these strategies to work to actually generate wealth and returns.

THE 2020 DIFFERENCE What really makes 2020 REI stand out is its access to

high-level intelligence, in conjunction with bulletproof practical roadmaps for serious real estate investors. Tim Herriage and his leadership team have “Wall Street level experience, having been there and performed in the trenches.”

2020 REI HAS TAKEN A DIFFERENT APPROACH

2020 REI leverages the collective knowledge of its partners in order to accomplish its mission: To provide world class customer service with the highest level of integrity. They achieve this through a collection of pro-fessional real estate investing companies; specializing in acquisition, brokerage, consulting, disposition, equity, financing and other products or services nationwide. Herriage was very clear when stating his vision, “We will be the nation’s leader in real estate investing products and services; and be known as the place where investors and companies turn to for knowledge and resources in order to grow their businesses.” After meeting him, you’d have no doubt he’ll be able to do that, and more.

To learn more about the 2020 REI Group of Compa-nies, connect with Tim Herriage and his team online at: http://2020REI.com.


2020 REI COMPANIES8330 LBJ FREEWAY SUITE B603, DALLAS, TX 75243888.674.5823 WWW.2020REI.COM/REALTY-411

Leverage over 20 years and $1 Billion dollars in investment transactions to achieve your goals in the Real Estate Investment space. 2020 REI is the nation’s premier real estate investor products and services organization. Whether you are interested in your first investment, your 100th, or structuring a $100 Million

dollar transaction; our team is the right one to have on your side.

∞ EQUITY

∞

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NS ∞ B ROKERAGE CO

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∞ DISPOSITIONS

Schedule a complimentary 15 minute consultation with our team at www.2020rei.com/Think-Realty/ or call 1.888.674.5823. If you have questions about investment options, private equity, financing a project of any size, or need help with your business plan; Our Hindsight Is Your Advantage®!

Tim HerriageFounder and CEO

The BEST Niche in

Commercial Real Estate

The BEST Niche in

Discover Why Real Estate Investors are Excited About SELF STORAGE

www.SELFSTORAGEACADEMY.com

Have You Every Thought About Owning A Self Storage Facility?

Is It Something You’ve Been Dreaming Of?

Do You See Yourself Growing Your Portfolio?

Do YOU Want to Earn a Comfortable Income?

IF SO, THEN CALL ME!

Learn A-Z with Me!

Here are just some of the Key Points you will learn during our 2-Day Seminars:•Learn what it takes to buy and mange a facility.

•Take advantage of our advisory services WITHOUT emptying your wallet!

•Find out why 40,000 investors chose this niche.

•Taxes, liabilities, software and extra income sources.

Kevin Rollings, Owner/Investor

How does 14% to 100% more for your real estate deals, a 5x better chance of success, and making tens of thousands per deal, even on pretty houses sound?

You might be surprised at what kind of profits Little Pink Houses might be able to put in your pocket.

THERE’S A NEW DEAL ON YOUR BLOCK

While the American real estate market has expe-rienced an amazing recovery over the past few years there are still two major problems.

1. 80% of would-be buyers can’t walk into the bank and get a loan

2. Starting out in real estate investing can have very low rates of success for solo investors

So Little Pink Houses of America Co-Founder Michael Mathe, conducted extensive research on these issues, and appear to have pioneered a disruptive solution, with incredible viral potential. The outcome is a powerful real estate investment busi-ness in a box, with a few big differences that put more green in the hands of investors.

BIG GREEN PAYDAYS- BY TIM HOUGHTEN -


PINK HOUSES?

No LPHOA isn’t actually focused on pink colored houses. In a recent telephone interview, Michael Mathe explains that the unique name came from a simultane-ous combination of factors, which fit just right. Giving credit to an in-house marketing assistant Michael says, “Pink just popped, and stuck.” Explaining it “perfectly matched the goal of standing out, giving our partners a catchy brand to leverage, and reflects the desire to give back.” LPHOA now works to support Little Pink Houses of Hope, which supports the families of cancer patients by sending the whole crew on carefully curat-ed retreats.

YOU CAN’T ARGUE WITH THE NUMBERS

If such a high percentage of Americans can’t get a conventional bank mortgage loan, and most of those who can, don’t want it, the average individual and

family is going to be in a tight financial spot in a few years with rising rents, interest rates, and property prices. The Pink plan enables buyers to get into homes sooner through Executive Lease Purchases on pretty homes. LPHOA’s research also found that investors who took a more organized approach to real estate invest-ment as a business, and who started out with a great model and support system were 4x to 6x more likely to succeed. We’re all familiar with the fact that one of the big-gest struggles and seller objections today is still that they can’t net enough money. In fact, many investors are having a hard time making the numbers work, or are getting burned trying to rehab properties that prob-ably should be condemned. Little Pink Houses of America may have solved all of these issues at once. The firm’s proprietary system enables stuck retail sellers to move properties through

investors for an average of 14% more than traditional methods of selling. Additionally, investors who buy for cash can make 2x – 3x more on a normal flip deal by simply implementing our back-end selling strate-gy. And it is all packaged up to be a virtually turnkey system that investors can plug in for their local markets all over the country.

WHAT’S IN THE BOX?

For affiliates who share the character and work ethic of Little Pink Houses of America, the firm offers an incredible opportunity and ally in getting into real estate or scaling existing efforts quickly, and with little competition. Mathe says, “We focus on higher-dollar homes (ex-ecutive level), so there’s little to no competition in any market we operate in. Most investors are working with lower dollar homes due to the natural ROI. Our plat-form allows investors to make $10,000 to $25,000 (or

more in the cases of a cash buy on a delayed flip) per transaction by securing these homes without any mon-ey out of pocket, and no credit. We target retail-based, sellers, so we don’t have to deal with ugly properties.” Investors who team up as affiliate partners not only get the LPHOA system to implement in their market, complete with proprietary contracts, closing docu-ments, nationally-branded marketing material, licensing to a nationally registered trademark, customized CRM software, branded website, but also get massive help with lead generation, business set-up, ongoing training and even routine on-the-ground assistance. The brand’s co-founder highlights a feature that blows away virtually everything else out there in that “We also negotiate all deals for the affiliate until they get their ‘sea legs’. Meaning, we talk to the buyer, seller, and negotiate terms, coordinate the due diligence on the buyer and ‘glue’ the deal together. That closing coordinator role ensures that every deal, especially ini-

The PINK plan enables buyers to get into homes sooner through EXECUTIVE

LEASE PURCHASES on pretty homes.



CREDIT

Q&A with MERRILL CHANDLERMerrill Chandler, CEO and

Chief Strategist at Credit-Sense, has a long-standing

passion for the art of credit profiles.

In fact, before launching Credit-Sense, Merrill co-founded Lexington Law Firm, which is the largest credit repair law firm in the country. While there, he discovered that credit repair didn’t provide borrowers (especially real estate investors) with the kind of credit transformation that they needed to get funding.

Due to his unique background in cred-it scoring and credit profiling, Merrill had an opportunity to create a process that he coined “Credit Profile Optimiza-tion.”

Recently we caught up with Merrill at one of our national expos to find out more about this revolutionary technolo-gy.

Q: There is all this commotion among real estate investors lately about “credit optimization.” What is it and what makes you qualified to help people with their credit and fundability?

A: Well, what most people don’t know is that FICO scoring software measures 40 characteristics of a credit profile. Not only do we know all 40 of those characteris-tics, but we know how to raise the credit score in every single one of those areas so that we can make a credit profile fundable — the type of credit profile that lenders are looking for—not just write a few letters and hope something is deleted from a credit report. We actually can do very powerful things to a credit profile that makes

them fundable.

Q: How does credit optimization help real estate investors get funding for their real estate deals?

A: Credit optimization helps real estate investors because the least expensive money is big-bank capital — the cheap-est money around is from big banks, credit unions, commu-nity banks, etc. If you fit their lending guidelines, they will give you money.

People think that there’s an adversarial relationship between lenders and borrowers. There’s not. Lenders only make money when they lend. We just need to know what criteria we need to meet in order to hit their funding bulls-eye. That’s what credit optimization does. It takes those 40


CreditSense

areas and it creates a profile that is fundable.

Q: What are some of the key strategies that help make real estate investors more fundable?

A: One of the things that most people don’t understand is that identity is extremely important to your funding success. Every one of our accounts revolves around our identity. If our identity is not absolutely clear to a lender, there are going to be underwriting problems.

For example, there are 29 Merrill Chandlers in the credit bureau databases. It’s not a common name, but that is still a lot of Merrills out there. So, the poor Robert Smiths, Lisa Campbells are truly going to have a problem with being specifically identifiable to lenders.

Unless I have a specific version of my name, and a spe-cific address; unless all my data is perfect across all three bureaus, any application I submit is going to create red or yellow flags in underwriting. Part of credit optimization is to make sure every piece of data on your credit appli-cations matches what’s on your credit profile at Experian, Transunion and Equifax. This is vital. That’s the first point that we try and work on.

Another key strategy we teach our clients is how to pur-chase a vehicle and get “bonus” credit score points AND make your credit profile look more fundable.

A lot of people go buy a $20,000 car and then they think, “Okay, I’m going to put $5,000 down.” That leaves them a $15,000 loan because of the down payment. If you do that, your balance-to-loan ratio is 100%. You have made no payments, so it’s 100%.

I teach my clients to do it differently. Take that same $20,000 loan and put NOTHING down, and make the first payment using the same $5,000 you were going to use for the down. Now, after the first payment, you have 75% bal-ance-to-loan ratio and FICO® scoring software will give you bonus for having lower installment loan balances—with your first payment, you’ve gotten extra bonus points.

A FICO® credit score is the result of a powerful algorithm that measures the 40 characteristics of a credit profile and then scores it. The higher the credit score, the better. The FICO® score is designed to predict the likelihood of a borrower defaulting and/or filing for bankruptcy.

CREDIT PROFILE OPTIMIZATION PERSONAL AND BUSINESS

Another strategy I tell my clients is to repurchase, re-lease, or refinance a car every 24 months. FICO® front loads credit score points on installment loans. After you make your 12th payment, you actually get 40% of the points that the loan is ultimately worth to your credit profile. You get another 30% of those points, for a total of 70%, when you make your 24th payment. Thereafter you’re only getting seven to ten points each year depending on what your term is.

Q: Are the majority of credit approvals based mostly on credit score?

A: No. There are three major facets of credit approvals: credit reporting, credit scoring and underwriting. Credit approvals require all three of them.

A high credit score simply means that you will get more of the SAME type of credit you already have. Chase and Wells Fargo are NOT going to give you a $50,000 busi-ness line of credit simply because you have a great Home Depot and Victoria’s Secret payment history. You have to have great fundamentals in all 40 of the FICO® metrics to attract lenders who will give you upper echelon loans and lines of credit. In this case we’re talking about underwrit-ing. What are they looking at?

Q: What is the difference between a credit score and a credit profile.

A: A FICO® credit score is the result of a powerful algo-rithm that measures the 40 characteristics of a credit profile and then scores it. The higher the credit score, the better. The FICO® score is designed to predict the likelihood of a borrower defaulting and/or filing for bankruptcy.

A credit profile, on the other hand, is a collection of accounts in your revolving accounts and installment loan portfolios. These accounts are known as trade-lines. You can have high, mediocre, or low value trade-lines.

Our credit optimization process is designed to make sure your credit profile has the quality of trade-lines that

are going to attract high-caliber lenders. Tier 1 and Tier 2 lenders want to see other Tier 1, Tier 2 lenders on your profile and that you have a spectacular reputation for ALL aspects of how you manage your credit—NOT just that you make your payments on time.

Everyone talks about using OPM for their real estate investments. But lender’s are looking to see how you treat OPM, how you respect it, and how you manage it. Only then will they trust you with their money.

Q: Are there specific strategies you can use to rebuild your credit profile.

A: Absolutely. Remember, the most important thing you can do is learn how this game is played. If you don’t know what you’re doing, you can build a credit profile that will ultimately be worthless. When trying to recover from bankruptcy, divorce, or a financial collapse, just know that EVERY SINGLE credit offer is from a sub-prime finance company and will NOT help you build a FUNDABLE credit profile. They are predatory lenders who are looking to take advantage of your situation. Now this: All secured

cards and secured loans are NOT created equal.

Depending on your situation, there are certain Tier 1 and Tier 2 banks that will give you a secured card that will convert to unsecured after you prove that you can manage your credit well. Be careful of institutions that offer cards that NEVER become unsecured or that require you to close your secured card and re-apply for an unsecured card. These types of cards will harm your credit profile and indi-cate to lenders that you are an unsophisticated borrow — a death sentence for your future as a borrower. You want to make sure you know the rules of the game, so that you can absolutely build a fundable credit profile from the very start — or in this case your re-start.

For more information regarding the transformational pow-er of credit optimization, go to http://CreditSense.com For serious real estate investors who are looking to weaponize their credit profiles and increase their capacity for funding, we offer a Credit Funding Analysis. The cost is $200 or it’s free if you watch the powerful video on credit optimization found on our website, CreditSense.com. Contact us at 801.438.9090 or email us at: [email protected].

Building Your Pool of Private Lenders, pg. 8


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Whether you are looking for renters or new owners, the pre-rush period is an ideal time to capitalize on these interests and bring wooden decks back to life. Much like a central interior room, a well-kept, pristine deck can significantly increase property value and boost rental – and ultimately resale – interest. In fact, this year’s Cost vs. Value Report study found that a wooden deck generates a 75 percent return on investment when homeowners decide to sell.

In most cases, wooden decks simply need rejuvenation – rather than a complete replacement – to deliver the added value and enjoyment prospective owners and tenants seek. As a general rule, decks should be re-stained and sealed every two years to protect the investment and preserve its appearance and performance.

Although renovation parameters will vary depending

on location, property size and preferred materials, keeping a few essential considerations in mind during the evaluation stage will deliver a sleeker, safer deck that owners will value and neighbors will envy.

CHOOSE THE RIGHT MATERIAL

A deck that is stable, safe and visually attractive is more likely to influence prospective owners and renters. Following the wear and tear of winter, it’s possible that some warped or decaying boards may need to be uplifted and replaced. Selecting the right materials for the project can ensure visual continuity and sturdy support.

Decking wood typically falls into three categories, each offering unique benefits. Composite wood has grown in popularity in recent years for its natural look and enhanced durability. Pressure-treated lumber offers greater design flexibility, especially as color-infused cedar products grow in popularity. Others opt for the beautiful appearance and texture of natural woods, such

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The late spring/early summer season often brings a rise in movers looking for new spaces to call home. As the weather grows warmer, outdoor patios and

decks bear greater value for potential occupants dreaming of cookouts and nights under the stars.

LIVE THE LIFE:


as redwood.Consider long-term performance and required

maintenance to identify which decking boards make the greatest investment. While composite wood boards come at a higher initial price point, they require little work and will last longer than their alternatives, so they may be worthwhile for investors looking for long-term renters. Also, while no product can truly match the look and feel of natural wood, these boards will require more upkeep, which makes them a good consideration for investors looking to sell soon.

PREP THE SURFACE

At a minimum, outdoor decks should be given a thorough cleaning with a pressure washer to make them visitor-ready, just like the interior of the home. This not only gives boards and fixtures an extra shine, but also preps the surface for paint and stain application by making it more consistent and smooth. This outdoor touch-up does not need to be laborious or expensive – you can likely handle it yourself with a pressure washer rental from The Home Depot’s Tool Rental Center.

A deep wash can also expose other cosmetic issues that could potentially dissuade tenants. Boards affected by decay, fungal growth, insect damage or premature aging may need supplemental treatment or have to be replaced altogether. Any thorough deck

inspection should also account for safety hazards, such as loose nail repair and chunk or splinter removal.

ADD SOME COLOR

Surface treatments enhance the natural beauty of wooden boards while giving the overall deck a brilliant and youthful look that will capture prospective tenants’ attention. Deck compositions vary, and there is no single answer to which product or application will deliver the best results.

If you’re looking for long-term results, consider staining the deck. Clear stains best emphasize the natural grain of wood planks, but are more susceptible to UV exposure. Semi-transparent stains provide added durability and solar protection while also bringing out the wood’s rich color. Solid color stains provide long-term protection while simultaneously masking blemishes and discolorations.

However, if you’re not as concerned about long-term maintenance and need a quick solution, consider painting the deck. While paint does not amplify natural wood colors and textures as well as stain, it provides great coverage with a low-maintenance application. A solid color resurfacer, such as BEHR’s Premium DeckOver, provides color flexibility and a slip-resistant finish while also protecting decks from mildew.

SET THE MOOD

Beyond refining the physical structure, a spring deck renovation adds ambience and comfort that warmly invite potential tenants and owners outside.

Exterior lighting has grown in popularity in recent years as a means to further bring out the deck’s color while providing an added layer of safety. As gatherings move outside, low-voltage lighting can better identify steps and rails, and clear a path to the deck. Investors seeking low-maintenance,

>

With the Most Challenging Enhancements now Com-plete, it’s Time to Incor-porate Amenities and Add Personality to the Deck

LIVE THE LIFE:

easy-to-install alternatives also can turn to solar lighting for an efficient solution.

A railing system also can provide added support and safety while creating a more open feel. You can customize the railings to match the look and feel of the deck, with options ranging from vinyl to wood to aluminum. Cable railing systems have emerged as a popular deck enhancement trend in recent years, with advantages like weather resistant design and low maintenance. In any scenario, consider using pre-assembled railing panels to reduce time and expenses. These panels are available in a range of materials, and can cut down on labor costs by turning a potential weekend-long project into one completed in a few hours.

With the most challenging enhancements now complete, it’s time to incorporate amenities and add personality to the deck. Amenities ranging from modern, inviting patio furniture to flower pots and fountains can add color and intrigue – and ideally have prospective tenants envisioning their own add-ons.

While decks come to the forefront and enjoy heavier traffic in the summer months, they are a critical home component that requires ongoing care – just as any interior room would. By rejuvenating the deck through a few simple steps, investors can make their properties more desirable to potential buyers and renters.


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investments, and see better net results faster.

Matt explains that for real estate investors this all leads to:1. Better credit2. Access to more money3. Lower debt-to-income ratios and being a better qualified buyer4. Increased equity positions

Imagine if you or your clients could avoid 80% of the fu-ture interest costs on building a portfolio of rental properties or a house flipping business. That could easily mean an extra $100,000 or more in the pockets of investors, on each property. It also bolsters sustainability so that investors can swiftly, safely, and confidently scale their assets.

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wiser) is experience. Not only your own personal experience, but that of your peers. Over the last 44 years of investing in rental real estate, I have seen many investors destroyed by poor planning and bad advice from others (professionals and non-professionals). The real problem is by the time you discover you have been given bad advice it is too late to do anything about it. You cannot buy fire insurance on your house when it has already caught fire! No one will learn to protect your assets like you will. No one will lose sleep over setting up a good asset protection plan to protect you and your family...other than you! So, take the bull by the horns and get to work. It is my suggestion that all real estate investors put each of their properties into separate Land Trusts (so each is insu-lated from the other). This is easy to do once you have the knowledge and forms. It is also very cheap to do because forming a Land Trust costs NOTHING! Zip, nada. Why not get the “best of both worlds” and link the great privacy benefits of a Land Trust together with the asset pro-tection benefits of an LLC for some dy-no-mite asset protec-tion? This can easily be done by making the beneficiary of the Land Trust your LLC.

There are many other similar structures that I discuss in detail in my Land Trusts Made Simple ™ home study courses. Please go to: http://landtrustsmadesimple.com for more information.

If you would like to attend one of Randy’s FREE Land Trust Webinars, go to: www.landtrustwebinar.com. Also, feel free to call Randy with any questions. He actually an-swers his phone! 1-866-696-7347

Holding Title in a Land Trust or LLC, pg. 40


Little Pink Houses wit BIG GREEN Paydays, pg. 101

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dow” is open. Investors can finance up to 10 residential properties using conventional 30-year fixed rate loans (if their credit permits). With some maneuvering, married couples may be able to stretch it to 20. If you are under that 10 (or 20, as the case may be) property barrier, it would be quite a smart move to buy SFHs and utilize the incredible loans you can get. You may wish to pay the loan off in 16 years to pay for your kids’ college education (SFHs are effec-tive at this – especially if they don’t go through a crazy 10-year cycle as

we had from 2004-2014). You could aim for the properties to be paid off at your retirement date (or the sav-vier move is just realizing how low they have become and let inflation keep eroding them as equity grows into your retirement years, providing financial growth well into the future in the face of ever-increasing lifes-pans and the need for our finances to

keep up with our life expectancy).The busy professional investor

would be well-served to realize that action is paramount. I have seen too many people get stuck for years – even decades – thinking they have to become experts on every facet of SFH investing.

While education is of great impor-tance, the “paralysis of trying to get ever-more educated” has stopped many an investor from achieving their financial goals due to lack of action. In the field of SFH invest-ing, local property managers can be

used, and they are plentiful in large metropolitan areas (which I recom-mend investing in). Knowledgeable local brokers can help a great deal as well. In addition, there are outfits with experience, which could “hold your hand” and help you. Experience is key! Just ask the expert you know how many SFHs they actually own.

If they don’t own very many (I

Adiel Gorel, Optimal Real Estate Investment, pg. 19

While education is of great importance, the “paralysis of trying to get ever-more educated” has stopped many an investor from achieving their financial goals due to lack of action. ‘ ’


would say owning a few dozen SFHs for an experienced mentor is probably a floor if they are going to lead you down the SFH investment path), then they may not have much more exper-tize than you do. It is easy, nowadays, to verify properties owned, since the county recorder’s data for most US counties is online.

The question is WHERE should we look in 2016 to invest in SFHs? This is important this year since there are markets which have rebounded very strongly since 2012 in the aftermath of the recession, to the point that SFHs

are priced too high to be a good in-vestment. There are also some markets that have become “hot” in 2014-2016, also driving them to be too expensive to make sense.

I will follow this article up with an article dedicated to this very subject (there is a lot to say!). I will also be speaking at selected Realty411 events in California and will discuss this

more in further detail. In addition, I, and

our company, have been holding 1-day events for over 20 years with market teams, expert speak-ers, extensive Q&A and networking etc. During our events I will, of course, cover many subjects in detail, including this one.

Looking forward,

Adiel Gorel

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