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Residential &

O C t O b e r e d i t i O n 2 0 1 2

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Winners revealed!

Buy, Fix, Retail Southern California

In this issue we explore a fundamental investment strategy we employ in the Southern California market: Buy, Fix & Flip. This strategy has certainly attracted thousands of “newbie” investors

seeking to capitalize on current market conditions over the last sev-eral years. We’ve all seen or heard of the countless television shows glorifying the opportunity, or the guru’s claiming instant riches if you buy their “fool proof” program. While it is true generous profits can be made, it’s what you don’t know that may very well cost you your initial investment & more.

Here is a question we hear pretty often...what the investor SAYS and what they MEAN------>

Why not just buy it myself? (How is it more advantageous for me to invest passively as a joint venture partner or lender in a real estate project instead of just buying it myself?”

There is a difference between working for your money and making your money work for you. As an investor, you want to invest funds in a vehicle that performs while freeing up your time to enjoy your life. Over the years we have heard from all too many active investors who have learned from experience that their investments can become a full time job. Generally, the lure of becoming a real estate investor is being your own boss and working on your own time and terms. To be a successful investor you will need to leverage the knowledge and help of other qualified professionals working in the industry.

For example your team should include, realtors, mortgage brokers, building inspectors, a variety of tradesmen to handle everything from general repair to roofing, plumbing & electrical, as well as, a real estate attorney & accountant just to name a few.

Needless to say your REI team is an investment as important as any financial investment that you will make throughout your investing career. In some cases it can be more important than your investment itself. The right supporting cast can be the difference of making $20,000 profit from a deal, or losing $30,000 dollars because of mistakes along the way. This becomes increasingly more important when the investor has deployed the majority of their funds into one (1) asset. Construction delays, unexpected repairs, municipal viola-tions, inspection issues, & of course your buyer backs out or fails to secure funding. It is rarely “smooth sailing” & each instance creates additional holding expenses you may not have planned for, ultimately reducing your income potential.

The main weapon used by today’s savvy investor is the Leveraged Joint Venture. The investor’s purchasing power is increased; exposure to capital is minimized, and the portfolio is increased. This is the very reason why so many investors have changed their course and deployed their funds through our investment platform.

When you can let your money work for you and still achieve lucrative returns, you have freedom.

The Fed & InFlaTIon; explore your options

The first week of September 2012, the US Federal Reserve announced one of the most radical central banking decisions in recent history. The third round of quantitative easing

also known as the money printing experiment immediately opened the flood gates to $40 Billion per month or $480 Billion per year to be used by the big bankers to purchase mortgage backed securities. This radical money printing experiment is the third round of its kind since the banking crisis of 2008 and the biggest concern is how it continues to increase the national and international pressures to create an inflationary atmosphere. A continuous flow of new money into the economy leads to inflation but since the money printed is also used abroad we can be sure that the effects of inflation will come to realization in a few years. The US currently faces high unemployment, slow economic growth and high rates of inflation as the money supply continues to increase known as stagnation. As of now, it is clear that Europe and the US will continue their reckless monetary and fiscal policies to bail out countries on the brink of default. Meanwhile countless banks, & other financial institutions along with other too big to fail companies throughout the world await their share. European central banks will keep inflating and spending like there is no tomorrow and sooner or later will have to face a global funding and currency crisis. In the U.S., it is clear that we will have to face this inflation monster sooner or later as the country continues to run budget deficits and print money through QE draws to “stimulate the economy”. So, how do you protect your assets against inflation?

options to protect your assets:

There are two types of invest-ments that are traditionally favored as inflation hedges; Precious metals and real estate. Inflation index secu-rities and inflation ETFs created by the US government address the concerns that investors have in regards to inflation. It is often said that precious metals hold their value over time. An ounce of gold would buy you a quality suit in the 1400’s and it would still buy you a very nice quality suit today. Gold which became publicly available in the US in the 70’s, fell from $800/oz in the 80’s to about $350/oz in the late 90s. Of course, you can make money investing in gold related stocks and ETFs as gold continues to rise on inflation concerns but do you want to protect your assets against inflation or do you want to become a speculator?

other disadvantages:

If you buy gold bullion or coins, you must store them, pay for the bank safe or safe deposit box and these costs add up to

$100 - $120 per year or more depending on the size. Physical gold does not pay dividends, does not pay interest, it just sits there in a box, in a safe, in the dark and the chances of gold being stolen keeps a lot of buyers away from transacting with it on a daily basis. It is tough to justify buying bullion unless you are convinced of a doomsday scenario and it is not clear that gold will be useful as the world turns to total chaos. Just imagine having to pay for your food, medical emergency or for any other service in gold and imagine carrying your bullion around town en route to your home or safe!

Real estate

Residential real estate: Your home can provide a real hedge against inflation no matter what happens to the price of your home in the future. How so you ask? With rising inflation, buying an owner occupied home can eliminate paying increasing rents, while buying an investment home will help you capitalize via the increasing uptick in rental rates. If you have a fixed rate mortgage, you stop the progress of inflation on one of the biggest items in your personal budget: housing expenses. Your mortgage payment will be the same today as it is in 10 years from now or 30 years into the future. Your inflation rate will drop as your housing expense decreases although you will still have to pay taxes/insurance, however, that represents a minimal cost compared to rents. Average real estate prices tend to increase over long periods and if you buy at the right time and for the right price you can capitalize on the real estate appreciation opportunities.

Commercial:

History can also prove that commercial real estate is also a great hedge against inflation. Throughout many years, commercial real estate returns beat inflation regardless of its correlation as you can see in figure 5.

Surge in property values during the 70s and 80s did more than keep pace with the surge in inflation during the Carter and Reagan administrations. How does this happen?

Leases usually contain escalation clauses tied to CPI (Consumer Price Index) or specific dollar amount based on a percentage or absolute dollar increase.

Rising inflation usually brings rising construction costs which reflect in replacement costs of commercial real estate properties thus driving up their appraised values.

Assignment of expenses can further provide inflation protection for commercial real estate. A Triple net lease for example, passes all expenses through to tenants, protecting the owners from ever increasing construction costs, wages and other carrying costs associ-ated with commercial real estate.

Although the pressure of QE 3 is not high enough yet to create a hyperinflationary situation, if the stock market slides more than 20% in the next months and the economy has a negative quarter in terms of GDP growth, the FED will come again with the rescue plan and it’s money printing experiment so we hope you are ready. If you would like to learn how to diversify your real estate invest-ment portfolio using our balanced investment approach, please visit our website at hiscapitalgroup.com.

We’re living in a very exciting time and savvy investors are wasting no time in putting their retire-

ment plans to work to capture consistent double digit returns. People everywhere realize that the real estate opportunities available right now will most likely never be repeated again during their lifetime.

Would you agree that it is time to rethink your retirement plan investing options?

Most people hold their retirement savings in traditional and widely-known vehicles such as; company-sponsored 401k plans, online IRA brokerage accounts and the like. But these are the same vehicles that have people up in arms due to the gut wrench-ing decline in the stock market. You see, most “traditional” retirement plans only offer limited selections that are based in the equities markets.

Problem is, all of these investments are driven by and subject to whatever impacts Wall Street and lately that has been just about everything. If you are sick and tired of the roller coaster ride on Wall Street then perhaps it’s time you explored so called, alternative investing.

Freedom of choice - a self-directed retirement plan

Using your retirement plan to become wealthyWarren Buffet…“Single-family homes are a very attractive investment right now”CNBC - Monday, 27 Feb 2012Honestly - how often does America “go on sale?”

Largely unknown yet extremely power-ful tools for your retirement, self-directed retirement plans can help you break free of the investment restrictions your current custodian or employer plan places on you. By employing a self-directed plan, a whole world of alternative investments opens up.

While they do require a special custodian (as most of your widely-known online and brick-and-mortar brokerages don’t offer them), it’s simple to roll over assets from your existing plan into a self-directed plan. Your custodian of choice will walk you through the process of transferring assets into your self-directed plan and will also provide you with guidance on what you can and cannot invest in with your new retirement account.

Just what types of real estate investments open up to you with a self-directed retire-ment plan?

Here is a just a partial list of idea starters-Raw landResidential homesCommercial propertyApartmentsDuplexesCondos/townhomesMobile homes

Real estate notesReal estate purchase optionsAll of these investments and more come

alive when you have a self-directed retire-ment plan. Not only will these non Wall Street alternatives help you personalize and reach your financial goals, a self-directed plan provides you unheard of privileges that the old tired traditional plans will not.

Depending upon the type of self-directed retirement plan here are some examples of the flexibility and freedom you will enjoy:

100% Check Book Control – every penny of your retirement money is available with a stroke of your pen. Easily invest into virtu-ally any type of opportunity you feel good about by simply writing a check.

Simplify Your Life – you can consoli-date all of your scattered retirement plans together (except Roth IRA) into your new self-directed plan. This increases your investment horsepower enabling you to properly diversify for an even better return on your money.

Don’t Forget Your Spouse – One type of self-directed plan allows your spouse to combine their retirement money with yours. Together you have check book control every penny in the account for convenient

America is on Sale

investing. This also saves you the cost of a separate retirement plan for your spouse.

Need Some Cash Now – One self-directed plan will allow you to personally borrow up to $50,000 and use the money for anything you want. You have up to five (5) years to pay off the loan and this is NOT a taxable event, rather it’s a benefit of the plan. Oh by the way, if your spouse has money in the plan they can also borrow up to $50,000

Protect Your Nest Egg – every year frivolous lawsuits strip away the retirement dreams of

thousands of people simply because they did not know what type of plan would have kept their hard-earned dollars out of harm’s way. The correct type of plan can be a fortress protecting your financial security from a greedy legal system.

There, have you just learned something new?

Wall Street lives by two iron clad rules. Get CONTROL of your money and keep CONTROL of your money - anything else is unacceptable to them. They have absolutely no interest in helping to educate you that they are NOT the only game in town.

I have no doubt your curiosity has been peaked by this brief article. I urge you

to educate yourself as to the self-directed plan choices you qualify for, based on your personal circumstances. Then you will be ready to make wise choices while having the confidence to take back control of YOUR money.

- David Cole from www.realestate401kplan.com

Progress Report

I’ve been working with HIS Capital for a little more than a year now. My experience with them has been great so far & I have been lucky to be able to refer them several of my friends to also look into what they have to offer. A couple months back, I was excited to find out that I was chosen as the First Cruise winner, where I would actually be joined by some of the HIS Capital team. We went on a cruise in the Caribbean to the Bahamas. I was excited to receive this opportunity not only because I would be able to hangout with members of the team, but this was my first time ever being on a cruise! We participated in several activities included live shows, a jet ski ride, rock climbing, etc. My favorite activity was snorkeling around the reefs in the Ocean; the water was incredibly clear! Not to mention the food and the crew service. It was great fun and laughter with great people. Thank you member’s of the HIS Capital group for this experience & all you do. I am looking forward to doing more business with you!

Jeanette P.

We especially have to reach out & give Jeanette thanks for her trust & loyalty in referring several new clients. as the first cruise winners of 2012 Jeanette & evan were also joined by a few hIS team members. We enjoyed an amazing time together taking full advantage of all the amenities & activities offered, from rock climbing, to snorkeling, as well as, the exceptional meals & evening entertainment. In fact, we enjoyed it so much, several of us decided to book another cruise next month! Unfortunately, it’s back to dry land for now, but there is still time for YoU to join in on the fun. Find out how you can qualify for a FRee Cruise for Two by checking out the details listed on the back page…..Stay tuned, as our next winner will be announced in 90 days, will it be YoU??????

Cruise Winners

We've been fortunate to have grown favorably the last several years, and much of it is due to our loyal client base and referral partners. As a way of showing our appreciation each quarter we will award a Cruise for Two to the individual who refers the most names of friends, family, & colleagues. Simply submit the names & contact information of those you know like yourself that want to make their money work hard & enjoy a generous return. We will take care of the rest, and update you along the way. For more details just call us @ 877-452-6569 ext 118 or email us @ info@HIScapitalgroup.com.

The Bottom Line:

We provide everything you need!

www.HISCapitalGroup.com

We provide you the education, research, maps, data, tools, opportunities, process, due diligence checklists, and

contacts, along with personal, financial, and asset portfolio tracking and analysis to help you chose the right income-producing assets to add to your portfolio.

Tired of earning low interest rates in CD’s, Stocks or Bonds? Let us show you how to make your money work for you safely through income producing real estate. Please call (877) 452-6569 option 1 for the Investor Relations Department or go to investor@hiscapitalgroup.com or access our website at www.hiscapitalgroup.com

Passive Investors

Win a Royal Caribbean Cruise!

Do you have questions regarding your investment statements or online portfolio access? We have many resources available for you, so give our Support Department a call at (877) 452-6569 option 4 or send your questions to support@hiscapitalgroup.com.

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