Assign or Double Close: The $9,000 Question

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By Jeffery S. Watson

In a conversation I had with a real estate investor regarding the differences between assignments and double closings, we talked about the cost associated with double closing a transaction. When you close two separate real estate transactions involving the same property within a short period of time, say 30-45 days apart, there are certain inescapable costs incurred twice. The title and escrow company or closing attorney is doing almost twice the amount of work.

The general rule of thumb I have given investors has been that if the assignment fee is $9,000 or less, then go ahead and assign the contract so there is only one closing and the assignee (the new buyer stepping into the shoes of the first buyer) completes the transaction with the title company or closing attorney. If, however, the assignment fee is greater than $9,000, then it’s time to examine if a double closing should occur.

In certain jurisdictions, that $9,000 number would change. For example, in Cook County, Illinois, I would recommend it be $15,000 or higher because of the extraordinarily high cost of closing a real estate transaction in that jurisdiction. In some states, many of my clients wisely choose to double close on all transactions due to the large spread between what they are buying it for and what they are ultimately able to resell it for.

In your market, the best thing to do to determine whether to assign or double close is to have conversations with various title and escrow companies or closing attorneys. Do some cost comparison as to the usual and customary fees and whether those fees can be negotiated down. Find out the basic, unavoidable costs of closing a real estate transaction.

Until you have that information readily known to you, you cannot make an intelligent decision as to whether you should assign or double close on a particular transaction. With that extra information, you become more effective in managing your real estate business.

Jeffery S. Watson

Attorney

Jeffery S. Watson is an attorney who has had an active trial and hearing practice for more than 27 years. As a trial lawyer, he has a unique perspective on real estate investing, wealth building and asset protection. He has tried over 20 civil jury trials and has handled thousands of contested hearings. Jeff has changed the law in Ohio 5 times via litigation or legislation:

Smith v. Rudler – 70 Ohio St.3d 397
In re Hugley – 629 N.E.2d 1136
Bahr v. Progressive Insurance – 2009-Ohio-6641
Snyder v. Snyder – 865 N.E.2d 944
H.B. 463 amending the Ohio Civil Rights Act

Jeff has also been a real estate investor since 1994, investing in both residential and commercial properties. He currently represents established real estate investors in commercial and residential matters when the transactions involve self-directed retirement accounts. As a frequent and popular guest speaker and teacher on stages and webinars, he is a recognized thought leader and innovator in the field of real estate investing, wealth building and self-directed retirement account transactions.

He is a nationally-recognized authority regarding regulatory concerns with wholesaling. He was the co-creator of the Option Contract method that revolutionized the short-sale flipping process. Thousands of investors have used documents created by Jeff to flip properties.

Jeff is general counsel to the National Real Estate Investors Association. Jeff is general counsel to and a cofounder of Realeflow, LLC, which made the Inc 500 list in 2011. He currently advises six different national organizations with a combined membership of over 250,000 investors.

From 2010 to present, Jeff has led lobbying efforts in Washington, DC on behalf of real estate investors which has brought about several changes in both government regulation and policy on distressed property purchases and resales. In 2014 and 2015, his efforts on Capitol Hill helped bring about change in the U.S. tax code and helped reinstate the Mortgage Debt Forgiveness Act. Since 2015, Jeff has worked to secure passage of the Seller Finance Enhancement Act.

Jeff’s efforts to secure reform in the real estate arena aren’t just on Capitol Hill. In his home state of Ohio, he has worked with the Ohio Division of Real Estate teaching on the legality of wholesaling.

He is a part owner of Venture Land Title II, LLC, and his law firm prepares deeds and other documents for two title companies. He is also legal counsel to a number of other organizations including Eagleville Bible Church, Inc.

Jeff is the author or co-author of 6 digital books:

  • “Understanding Self-directed Individual Retirement Accounts”
  • “A Guide to Private Lending”
  • “Short Sales Done Right – How to Profitably and Legally Navigate the Short Sale Jungle”
  • “Death of the Land Trust … in Short Sales”
  • “How to Hire Your ‘Dream Team’ ”
  • “Understanding the Foreclosure Process”

In addition to his digital books, Jeff authors an email newsletter twice a week and maintains a blog at WatsonInvested.com on investing, business and entrepreneurship which are read by thousands of successful investors.

Stop Dissin’ the Housing Market—Set it Free!

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By Christopher Thornberg, PhD

Editors Note: This posting was originally published on the Opinion Page of the Los Angeles Daily News.

High housing costs continue to be at the center of policy debates in Los Angeles—and across much of the state. This intensifying focus is warranted now more than ever given how the crisis has moved from simply eating up the disposable income of residents to slowing overall employment growth in coastal economies – something driven by a lack of available workers, which in turn is driven by the housing shortage.

Sadly, the many proffered solutions to the problem remain wildly off base and are not likely to accomplish much of anything.

Take the City of Los Angeles’s proposed linkage fee, a fee to be paid by developers of market-rate properties to fund more affordable housing – and something that has been endorsed by many prominent voices in the community in recent weeks. That support has been motivated in part by the results of a recent homeless count done in Los Angeles County, which suggested that there was a 20% increase in the County’s homeless population over the last year. This is a total red herring when it comes to addressing the lack of new housing supply.

The recent homeless census count indicates that the total number of homeless in Los Angeles County is 53,000—a minuscule fraction of the 10 million plus people who call the County home. Moreover, a clear majority of these folks are homeless not because of the high cost of housing but because of mental and/or substance abuse problems, serious issues that would leave them homeless regardless of the current market price of housing. These people desperately need help—but a different kind of help than the linkage fee would provide.

And the few who are helped represent the proverbial tip of the iceberg—for every family that receives support there are another thousand that continue to struggle as rising rents eat into their incomes. Conservatively, the County would need close to one-quarter of a million new units to catch up with current need.

The linkage fee and similar policy proposals being rolled out at the city and county level reveal a deeper problem: Many localities and policymakers simply believe that the free market is not willing or able to create an adequate supply of housing in the region so they pursue punitive measures to make up for these perceived inadequacies.

Such a claim is akin to chaining a mighty eagle to the ground and then accusing it of not being able to fly. The lack of housing in Los Angeles is not due to the market’s failure but rather to the actions and choices of the City’s citizenry and its policymakers who have systematically intervened over many years to slow new development.

Research conducted at UCLA (UCLA Dissertation, The Homeowner Revolution: Democracy, Land Use and the Los Angeles Slow-Growth Movement, 1965-1992, Morrow, Gregory D.) shows how the City has energetically downzoned over the years, shrinking housing capacity from 10 million people to just slightly over 4 million—roughly the same as the current population. Add to that sky high permitting costs imposed by the City, non-stop California Environmental Quality Act (CEQA) lawsuits, as documented by the lawyers at Holland and Knight (In the Name of the Environment: Litigation Abuse Under CEQA, Jennifer Hernandez, David Friedman, and Stephanie DeHerrera, August 2015), and other rules and taxes including inclusionary housing and prevailing wage requirements, and it becomes obvious why the market is responding so slowly to current price signals.

It is true that what does get built in this town tends to be for higher income households. But this is a natural outcome of the barriers to entry that afflict the system. When supply is artificially limited, what does get produced is going to be concentrated in the highest margin portions of the market. If supply were less restricted and fixed costs reduced, there would be a natural movement towards lower income families. Would costs ever go so low as to entice developers to build ‘affordable housing’ using the public regulatory world definition? Probably not. But in Los Angeles the overall lack of supply keeps middle income families in housing that would otherwise be available for lower income families.

The market should not be blamed for problems created by public policies that have constrained them. Addressing these critical policy issues is the place to start. A few small changes have occurred at the state level, but so far, Sacramento has looked more towards punishing local jurisdictions for not allowing housing, rather than attempting to deal with the true root causes. Everyone is treating the symptoms, not the disease.

Take for example inclusionary housing, the new buzz word in many communities. Past studies conducted by neutral researchers have shown that these policies have very little overall impact on housing affordability in a community. This is because the gains enjoyed by the lucky few families who receive inclusionary housing subsidies are offset by the higher cost of housing for the rest of the population. And ultimately such efforts are tiny compared to the scale of the problem. The $90 million raised per year would support less than 1000 new units. This is less than the annual increase in the housing shortage.

A few places with similar problems are starting to look at more realistic options. Oregon has started to move in the right direction with Oregon HB 2007, a proposal that goes to the next level—it seeks to prohibit local efforts and activities that restricted housing development in the first place. As the old ditty goes when you’re in deep the first thing to do is stop digging. But Oregon’s proposal is controversial, there are many loopholes, and even if it passes it will only prevent new restrictions from being put into place. Until California, Oregon and other development-unfriendly places roll back current market restrictions and fill in the hole, the housing crisis will only get worse.

Christopher Thornberg

Christopher Thornberg founded Beacon Economics LLC in 2006. Under his leadership the firm has become one of the most respected research organizations in California serving public and private sector clients across the United States. In 2015, Dr. Thornberg also became Director of the UC Riverside School of Business Center for Economic Forecasting and Development and an Adjunct Professor at the School.

Top 5 Reasons Why Real Estate Investors have their Eye on Kumamoto

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By Priti Donnelly

If there is one city in Japan to watch for, it is Kumamoto, the capital city of Kumamoto Prefecture on the Kyushu landmass. Here you will find a property market in which opportunities are rare and sell almost as soon as they hit the market. Most investors familiar with the Japanese property market focus on high yields and affordable prices.  A city such as this, in its growth phase also has the potential for increased land value. Hence, Kumamoto is one of those markets with the potential for the best of both worlds.

Population

Kumamoto has experienced remarkable growth. Notable for one of the largest solar farms in Japan and positioned as a hub with a port for people and import/export of cargo. In this satellite city, population has grown from 670,348 in 2008 to 734,917 in 2015. That’s 9.63%! Compare that to 3.91% growth in Fukuoka, 1.31% in Kobe and 1.13% in Sapporo during the same timeframe. The location continues to draw tourists to its natural hot spring resorts and to the impregnable, defensive designs of the historical Kumamoto Castle dating back to 1467.

Affordable High-Yield Properties

Where there is a surge of population in a developing area, investors can find affordable, high yield properties. It’s first come first serve for the rare availability of one room apartment units (“mansion” in Japan) on the market in Kumamoto. Prices can be as low as 2.4 million to 2.8 million JPY (USD $21K to $25K) at between 7.5% to 9% yield net pre-tax, approximately USD $150 to $240 net income per month.

Secure Returns

Governance in Kumamoto supports subsidized employment and volunteer opportunities as well as rehabilitation and housing services for first offence ex-cons, the destitute and homeless. Therefore, along with great price and high yield, unlike other parts of Japan, the government pays rent directly to the landlord. In fact, some realtors and property manager offices specialize in buying vacant buildings to rent entirely to welfare recipients because of the high and secure returns.

Occupancy

From our experience we have never had a vacancy longer than two months in this city. Part of the reason is that properties are generally within ten minutes walking distance to the nearest train station. By comparison, Sapporo has five to six month vacancies, despite its size, high returns and white collar industries, and similar vacancies in Nagoya, the industrial powerhouse city.

Construction Standards

Investors often ask us about the effect of earthquakes in the area. Again, from our personal experience, on the 14 properties under our management, approximately only USD$500 in damages and that was to one window frame and some flooding under it. Even if there had been more damage, investors would have been protected under insurance.

One of the reasons that Kumamoto does not tend to disappoint is that many of the properties were built after 1981when the building standards act was revised for earthquake resistant construction methods. While 1981 is a turning point for some investors, some older buildings built prior to 1981 can be retrofitted to bring them up to code by renovating, repairing and re-strengthening exterior walls.  In assisting buyers with their due diligence, we look to see if the building has sufficient accumulated funds for repairs to cover the cost for work, or alternatively we look for completed work to justify depleted funds. Either of these cases tells us that the building is well managed, common in Kumamoto.

For these reasons, investors say Kumamoto is one of the best high return locations in Japan. if you see an opportunity don’t ponder over it too long. Properties there don’t come up often enough and when they do they most certainly don’t last.

Priti Donnelly – Manager, Sales and Marketing

Nippon Tradings International (NTI)

Priti Donnelly is the sales and marketing manager at Nippon Tradings International, a proxy and buyers’ agency representing foreign investors with purchasing, selling and managing real estate in Japan. She helps real estate investors, new to the Japan property market understand both the value of the cash flow property market, the challenges, as well as assisting with individual needs in growing cash flow portfolios.

http://www.nippontradings.com

 

Here’s Your Invitation To Ignite Your Investment Performance

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By Carrie Cook

Still looking for better investment performance? How does $1M in tax free returns sound?

Securing strong investment yields is still one of the top priorities of all investors out there today. Of course big promises alone can’t be the single driving force behind investment decisions. Otherwise we’d all be off to the casinos in Vegas to go all-in on every next roll of the dice, and financial planners would be out of business. Returns are important, but so is diversification, tax planning, and finding sustainable investments.

The Search for Sound Investments

Finding sound, profitable investments and enough of them can be challenging. Some have very diverse stock portfolios, yet really have no idea what to expect from their performance. Many have added owning a home to their assets, and hope to gain from equity growth as they pay down their mortgages. Some take this further with direct investment in rentals. Rental homes can provide similar benefits to homeownership, but can also bring significant time demands and expenses. Then there are REITs, which promise ease of investing, but provide no collateral and present the same high volatility risks they are exposed to in other stocks.

Then there is trust deed investing. This may also be called ‘note investing’ or private lending. This is a sector loved by sophisticated individual investors and institutional investors for its simplicity, strong collateral, and of course the yields. These are the types of investments which have made the likes of Warren Buffett, Sam Zell, Blackstone, and Bank of America very wealthy.

President of Ignite Funding, Carrie Cook says it’s entirely “possible to invest $100k at 10% in mortgages for 25 years, and reap $1M in tax free returns.”

Ignite Funding

This is exactly the type of investments Nevada based Ignite Funding specializes in. Ignite Funding has been featured on Modern Living with Kathy Ireland and Bloomberg Television. Led by president and woman entrepreneur Carrie Cook the firm has been providing these elite investment opportunities for 21 years.

Ignite Funding offers qualified investors the ability to participate in their success by funding high quality borrowers in the real estate space. These trust deed or mortgage investments provide cash flow, above average yields, and the security of being backed by tangible real estate collateral.

Some big funds and new note brokers have recently made this space popular in heralding the benefits of investing in distressed debt and non-performing existing loans. In contrast Carrie explains that Ignite focuses on issuing new capital to strong builder developers with great track records. Specifically the firm’s president explains that they carefully curate “a pool of highly prized borrowers who have been in business for at least 10 years.” In fact, this lender-broker does not even operate a borrower facing platform. They seek out those they see are the most qualified. If builders do find them Carrie says they “accept only around 20% of the requests received.” The funds are used for acquisition, development, and construction, and target a 10% to 12% annualized return to investors.

This is NOT Wells Fargo

Among the refreshing differences that investors will find at Ignite Funding is a serious dedication to sustainability and transparency.

Those are words which are easy for companies to spout out these days to capitalize on trends. But this company proves it by really putting the information out there. Other CEOs, especially in this male dominated field might deem some of this transparency clearly unnecessary and going too far. Yet, it is clearly in favor of the investors, as it holds their asset manager to a high standard and ensures they are working hard to deliver the best results today and over the long term.

Some of the ways you’ll see this displayed via the firm’s website include a calendar of deals being funded, five years’ worth of detailed performance documentation, and even information on defaults. That’s right; no matter how diligent and careful you are some loans will default. Some big banks have become infamous for how they hide this information for so long. Not here. Carrie Cook’s team clearly displays any default information, along with the cures. The data is encouraging too, with the company recouping over 100% of investor capital even in some of the worst performance cases displayed. Carrie credits this success not only to the investors and borrowers involved, but her teams attitude of being willing to “run into the fire, not from it,” as well as the consolidated approach of completely in-house operations from origination to servicing and loss mitigation.

Who is Investing in Trust Deeds?

In addition to the very visible and notable examples of big funds and billionaires who invest in this asset class, there are a growing number of private individuals who are experiencing great results here.

Ignite Funding accepts a minimum investment of $10,000, though Carrie says “around 75% of clients are using their IRAs to invest,” which means they can invest a lot more. However, one of the best features here is that while adhering to Nevada’s strict sustainability standards, this type of collateralized investment is open to those earning just $70,000 or more each year, providing they are not investing more than 15% of their net worth.

For those interested in learning more about trust deed investing, how Ignite Funding protects its clients with multiple layers of security, and who want to soundly diversify their portfolios find out more online at IgniteFunding.com.

Disclaimer: Money invested through a mortgage broker is not guaranteed to earn any interest and is not insured. Prior to investing, investors must be provided applicable disclosure documents. Ignite Funding, LLC | 6750 Via Austi Parkway, Suite 230, Las Vegas, NV 89119 | P 702.739.9053 | T 877.739.9094 | F 702.922.6700 | NVMBL #311 | CACFL #603J286 | AZ CMB #0932150 and AZCMBBR #0121055.

 

 

3 Proven Strategies for Small Business Owners to Increase Cash Flow

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By Dr. Teresa R. Martin, Esq.

Is your small business struggling to make enough profit to pay the bills? Living paycheck to paycheck can be quite frustrating. Perhaps you started a small business so you could pursue your dream while earning money at the same time. If so, then you know that it isn’t always easy to get a small business to bring in the profits you’d like.

However, if you’re willing to work hard and have a good plan, there’s no limit to how far you can take your small business. Luckily, there are many ways to increase your current cash flow and free you from the threat of financial disaster.

Consider these strategies to increase your cash flow:

  1. Collect feedback. Many small business owners forget the importance of soliciting feedback from their clients. There are several effective ways to find out what your clients think about your products and services.

  • Ask the client to fill out a quick survey or questionnaire to rate various aspects of your business. These surveys can provide an excellent glimpse into your client’s point of view. There are many different websites that enable you to create simple surveys. Look online to find one that meets your needs.
  • Follow up with your clients with a phone-call or email asking for comments about your products or services. Inquire about which aspects they are satisfied with and which need some work.
  • Talk to your clients in person and ask them how they feel about their experiences with your business.

Remember, word of mouth is one of the best ways to advertise your business. If you have a bunch of satisfied customers, they’ll tell their friends and family about their positive experience and you’ll get more business.

  1. Get rid of products that don’t sell. It’s likely that you offer your customers a wide variety of products, but only a few of these products bring you maximum profit.
  • Sometimes a large inventory can work against your business. Customers often avoid buying altogether when they’re overwhelmed with options.

  • Instead of offering more products that likely won’t be sold, trash the unattractive products and offer more items or services related to your best-sellers. This is an excellent way to boost sales while reducing upkeep and inventory costs.
  1. Pursue unique marketing strategies. If your business is experiencing a steep drop in sales, there must be a reason. It could be that your marketing techniques are simply not as effective as you thought. Consider alternative marketing techniques.
  • Think about marketing your business online. It’s becoming easier with each passing day and more people are prone to search the internet for better deals. Businesses that have online order options are often much more successful. It’s a perfect way to increase cash flow.

  • Get the word out. Take advantage of social media sites like Facebook and Twitter to promote your business.
  • Radio advertisements, commercials, billboards, and flyers all increase the visibility of your business. Sometimes, door-to-door marketing is just as effective.

By using these strategies you can boost sales and increase the revenue of your business. Once these strategies have been implemented, there will be no need to worry about how you’re going to pay the next bill. You’ll finally have the money to live the life that you’ve dreamed of.

It just requires determination, persistence, creativity, and an open mind to make your business successful. Test different strategies and stick to the ones that work best for you. Your efforts will be worth it once you see those increased profits.

Dr. Teresa R. Martin, Esq.

Dr. Teresa R. Martin, Esq. is the founder of Real Estate Investors Association of NYC (REIA NYC). REIA NYC (www.reianyc.org) is a premier real estate investment association serving the New York City marketplace. Its primary focus and mission is “helping our members build, preserve, and harvest multi-generational wealth” in the areas of real estate investments, business ownership and personal development.

Young South Florida Entrepreneur Leads the Way in Enhancing the Community

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By Tim Houghten

Young Entrepreneur John Aaron reveals his thoughts on the direction of the Florida market, and where he sees the most attractive opportunities ahead…

Going from small town to leading a popular brand in the Magic City of Miami, John Aaron demonstrates where his company is going and what’s possible with serious focus, commitment, and a leap of faith.

If you’ve ever heard of Sebring, Florida you know it is a little town without much going on. That’s were John Aaron grew up. There aren’t many options when you grow up in that type of environment. If you do really well you might eventually get a job at the local hospital, or perhaps get a football scholarship and a pass to a faraway college. Sebring doesn’t even have any interstate highways going through it. That didn’t stop this hungry entrepreneur from pursuing his passion and dream.

During a recent interview with Katrina Campins (The Apprentice) he is described as one of the few next generation young entrepreneurs that have both hustle and work ethic. Early on he knew he wanted to do something with real estate, and he believed Miami was the place where you could really make the magic happen.

Initially starting as an agent John quickly through in the towel and started investing. John formed the Aaron Organization in late 2012 and began hunting for his own property deals. While he insists that real estate investing is not a get rich quick gig, his first deal which landed him a check for $19,000 got him hooked and only emboldened his mission.

In the last four years the Aaron Organization team has flipped over 200 single family homes in the tri-county area of South Florida. However, John tells Realty 411 that more than just being about the money, his focus and persistence has really paid off in proving the ability for you to achieve what you believe in, in whatever field you are willing to take a leap of faith towards. The Aaron Organization has a great brand and blossoming company culture, but in John’s words the team is also winning in “creating something positive.” By enhancing the community and giving job opportunities

As John experienced; there will always be the pessimists, the bears, and those that have given up on their dreams willing to offer their negativity or two cents. Aaron Organization’s founder insists “It’s always a great market, if you have the right strategy.”

Aaron Organization is definitely on the rise in South Florida, and boasts a growing team including Acquisition Manager Darlenys Castillo who is young, hungry, and has been with Aaron organization for 2 years. Darlenys has helped acquire of over 80 homes and counting. Paola Vizcaino has been with the Organization for over a year and is closing transactions every week.

Aaron Organizations thoughts on the market now is that there may be more Florida buyers and investors using loans for leverage today than a few years ago, but for those that have ever visited Miami; you already know the international attention it commands and its role as a major global banking stronghold, playground for the wealthy, and investment haven for wealthy domestic and foreign investors. These are trends only likely to continue and grow with the recent finishing of the Panama Canal widening which is pegged to dramatically bolster the Florida economy.

John reveals that Aaron Organization has gone beyond its stronghold of renovating single family homes to enhancing the way of life in the region through developing commercial properties. Miami, Fort Lauderdale, and West Palm Beach have well built up areas, but despite that fact they still have pockets which are ripe for development and revitalization. John tells us that this is where the biggest opportunities are for both having the greatest returns for investors who are seeking better value and spreads than can be found in Miami’s more congested neighborhoods and districts and also have positive impact for the community,.

For investment and partnership opportunities for qualified investors find out more about this firm, its founder, track record and vision online at AaronOrganization.com.

Improving Quality of Life through Real Estate Investment

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Featuring Dennis Henson

An exclusive interview with Dennis Henson on enhancing life while making fortunes on single family…

Dennis Henson has been investing in real estate longer than most real estate experts have been out of diapers. He’s seen the market from every angle, seen it rise and dip, and rise again. Today Dennis Henson heads up the Arlington Real Estate Association, and the comprehensive training portal Single Family Fortunes, which has seen one student recently soar to acquiring 23 properties in just 8 months. So what’s enabled him to not only maintain success, but successfully train others to get in and win?

Here’s the inside scoop…

How did you get started in real estate?

Dennis: “A combination of moving up from living in a small house to a large one, and badly renting out the old home, and then reading ‘How To Wake Up The Financial Genius Inside You’ by Mark O. Haroldsen.”

If there is one thing you could credit your success to, what would it be?

Dennis: “Maintaining a burning desire to succeed.”

How did you make president of the Arlington Real Estate Association?

Dennis: “I started the group in order to become more knowledgeable about REI Topics. For example; probate. If I had to do a class on that subject in front of 50 to 100 people – you can bet I was going study, learn about that topic, and master it.”

What’s different about your training system from what else is out there?

Dennis: “Many of the other teachers focus on one technique for examples Short Sales or Wholesaling. The biggest difference is that my training covers all areas of REI. I call it the 5 M’s of Real Estate Investing.”

  1. Mining
  2. Money
  3. Maintenance
  4. Marketing
  5. Management

You have students who report achieving very significant results, very quickly. What makes the difference between them and the rest of the wannabe investors out there? 

Dennis: “My training is one on one, and I am very interested in their success. There is nothing magic about my training. It is just combining knowledge with hard work. I have a system that works, if they do. ”

You have a slogan “Improving the quality of people’s lives through real estate investing” – what does that mean to you?

Dennis: “Well that is my motto. My goal in life is helping others become more successful so that they can enjoy a better quality of life.

What is a better quality of life?  It is being able to have the freedom to do the things you want to do, going to the places you want to go, and having the things you want to have.”

Where do you see the best opportunities in real estate ahead?

“I believe that REI always has, and always will have the greatest opportunities for those who are willing to learn and work hard. The number one need for a human is shelter. Do you ever watch those survivor reality shows where they leave someone stranded in a jungle or on an island? What is first thing they need? Not water, not food, but shelter. It is the most basic human need, and always will be. If there is a disaster people will not be needing stocks or bonds, or gold or silver, but they will be needing shelter. So I think REI will always be a great business for my students and association members.”

What’s the best strategy for those that fear the market may be in for a correction soon?

Dennis: “Buy lots of properties. When the people are not buying houses, what are they doing for shelter? Living in a cave? No, they are renting; so the rental market will be booming.”

Interested in learning more about Dennis Henson, his training, and the Single Family Fortunes he has empowered others to create? Look out for Dennis and his wife Norma at upcoming Realty 411 Expos, listen in to him speaking on Blog Talk Radio, and visit his website at SingleFamilyFortunes.com, where you’ll find a FREE TRIAL for an online app that helps you evaluate your deals faster.

 

Understanding the Mindset of the Investor

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By Leonard Rosen

In my 38  years of being involved in the real estate marketplace, I have come to the conclusion that not many promoters of real estate syndication understand the mind set of of the investor.

In order to begin the process of raising capital, the promoter needs to understand the risk tolerance and appetite of the investor. Every investor needs to feel comfortable with the asset class, geographical area and dividend yield associated with the investment. Real estate investors have different comfort levels, consequently, the investment must fit into their strategy.

Also, investors come in all shapes and sizes, some investors will deploy capital utilizing their self directed IRA, while others deploy capital outside of their retirement accounts.

Obviously, these are easy questions to be answered with a quick due diligence check list. I ask real estate syndicators all the time, what is your investors most dominate question prior to deploying capital? I receive answers such as dividend yield is the predominate concern. After further discussion, we realize that the dividend yield is used as an excuse for not feeling comfortable with the investment proposal.

Investors participate in business deals with people that they like and trust. If the trust factor is not addressed, the likelihood of an investor participating in your deal will be low. Addressing the emotional needs of someone who is asked to give you money is a complex issue.

I believe you should follow my simple 4 step rule.

Rule number 1. Never ask your investor for capital on a first meeting, simply share some concept and ideas and gauge their interest. This is a time to fact find and begin your relationship. The ultimate goal is to begin a dialogue in the purpose of creating a trust factor.

Rule number 2. Exchange contact information and reach out to your possible investor by email or phone and thank them for the time they spent with you.

Rule number 3. Schedule a time for coffee to explain in detail your investment strategy to determine if the investment strategy fits into the investors comfort level. You can speak about risk factors, dividend yields and security interests.

Rule number 4. Be patient, move the relationship along at the speed the investors feels comfortable with. This is the time to gauge their interest for their participation.

Always remember, Have testimonial letters available, website address and a detailed executive summary of the proposal.

Good luck

Leonard Rosen

CEO, Pitbull Conference
“The Most Interesting Man in Hard Money”

Leonard Rosen’s career has spanned over 30 years in the financial services market as it relates to real estate. In the 80’s, Mr. Rosen was the nightly news anchor for the Financial News Network. After the network was sold to CNBC, Mr. Rosen hosted the nationally syndicated television program “The Leonard Rosen Show”.

Today, Mr. Rosen hosts “Financial News with Leonard Rosen”, which focuses on the real estate markets with an emphasis on the private lending sector. Mr. Rosen’s market commentary has been featured in The Wall Street Journal, Fox News, and MSNBC.

As the CEO of Pitbull Conference, he is regarded as “The Most Interesting Man in Hard Money”.

Mr. Rosen believes you sell the problem you solve not the product. His visionary approach has earned him praise from the real estate and lending community nationwide.

Mr. Rosen provides private consulting to major banks, hedge funds, mortgage companies and private lenders.

“Business is based on two essential components, power and leverage. The most common way people give up power is by thinking they don’t have any.”

 

 

Crush Those Goals!

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By Sensei Gilliland

This is not your average financial planning article…

If you want to be lulled into a half conscious Sunday afternoon post-game coma, or find yet another excuse to go back and take another 6 months to build a business and investment plan, this is not the advice you want to read.

If you do want real results, and you want them today, then the next 5 minutes are going to produce a nice healthy ROI.

Let’s do this!

What Do You Really Want?

Financial goal setting doesn’t have to be a dull, laborious, or time consuming affair. It really doesn’t. Spending hours with financial planners who give you colorful presentation packages can make you feel warm and fuzzy. Commissioning another revision of your 25 page business and investment plan might give you a little ray of hope. But do these things put money in your pocket? Or are they just stealing your most precious resource – time?

Airbnb is famous for its one page business plan. On August 7th, 2016 TechCrunch values the bed and breakfast app at $30 billion. Not too shabby. So if you are simply hoping to score somewhere south of $2 billion in the next 8 years you’ll probably be fine with a paper napkin. In fact, in my latest book Wholesale Warrior I reveal how I ended up boiling down my model to the simplicity of being able to fit on less than a 10 inch square.

Your plan is really all about four questions.

  1. Why?

What are your finances going to achieve for you?

  1. How Much?

How much are you shooting for? Wealth, income, and time?

  1. When?

By when should you be enjoying these benefits? What date?

  1. How?

How are you going to get there? Break it down into three simple steps A, B, C.

  1. Acquire rental properties
  2. Scale to owning 100 cash flowing rental units
  3. Spend free time helping to train other investors

Now focus on accomplishing A.

Be a Financial Champion

If real estate is all about “location, location, location,” then winning at your financial goals is all about “ACTION, ACTION, ACTION!”

We had the Rio Olympics. What did it take for those world class athletes to win those medals? Did they wait to get a master’s degree? Did they have a bigger binder and financial prospectus than all of the millions of spectators around the globe? Or did they just go?

They practiced, they trained, they took action daily, and they got the best coaches they could find.

I competed in martial arts for years. How do you get great at combat sports like martial arts (or real estate)? Not in a corner office or in front of the TV. You get on the mat, and you train. You spar. Sure you’ll get hit. You might even get a bruise or two. Guess what; you just get smarter, faster, and stronger. Next time you are less likely to leave yourself open to that blow. You’ll be faster and more accurate at securing a win.

Now I’m a big fan of education. I wouldn’t recommend anyone just jump in the UFC octagon after watching Rocky or a Jean Claude Van Damme movie. Just like you shouldn’t just rush to put all of your money into real estate based on a ‘reality’ TV show episode, or a handbook printed in the 80s. You’ve got to have some knowledge, a good trainer, and an up to date system. But at some point you’ve just got to take action.

You’ve probably seen martial arts block breaking. Practitioners can smash through stacks of concrete blocks, boards, and other building materials. But those items aren’t going to break unless the artist swings on them. Without action nothing will happen. The same goes for your financial plan.

Even Water Breaks Stone

Even dripping water breaks through stone over time. That small drop of persistence can literally drill through seemingly insurmountable boulders. And this is one of the reasons that building a rental portfolio is so powerful in breaking through financial goals.

I am a big fan of wholesaling, rehabbing, and even private lending. However, rentals are also a great choice. They are great for steadily building wealth, building up powerful streams of cash flow, and it can be a completely passive strategy that delivers the results you want, while you sleep.

I firmly believe that anyone can benefit from rentals, if they have discipline and a good system. With a good turnkey system it doesn’t matter whether you own 10 or 100 in your portfolio, you still have all the free time in the world to do what you are really passionate about.

Over at Remote Rehabs we took rental property investing two or three levels further by giving investors access to wholesale priced properties, in the best nationwide markets, have a pro team handle all the rehab and leasing, and property management. They get the best value and cash flow, while retaining the maximum amount of their most precious resource – their time.

Five Ways to Take Action Right Now

  1. Answer your 4 questions above; write them down
  2. Make an offer on a property; just throw one out to get rolling, even if you lowball something from the MLS or a FSBO down the street
  3. Register for The Ultimate Investor’s Tour of great rental homes at BlackBeltInvestors.com
  4. Register on our waiting list for hot rental property deals at RemoteRehabs.com. We presell all of our properties.
  5. Call our office and set up a free strategy session

 

Sensei Gilliland

Founder of Black Belt Investors; 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 trademarked real estate investment systems. Sensei is the go-to source for serious investors and entrepreneurs seeking extremely effective, no holds barred training, investment properties and funding. Claim your copy of his powerful Cash and Wealth Report here.

 

Fire Your Real Estate Banker!

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By Mark Willis, CFPⓇ​
Lake Growth Financial Services

“A banker is a fellow who will lend you his umbrella when the sun is shining, but wants it back the minute it begins to rain.” — Mark Twain

Ain’t that the truth? As we look ten years back on the Great Recession, we can see how much has changed, and how much more has stayed pretty much the same. Home values are up again to 2007 levels. Unemployment is down to pre-crisis levels. The stock market is hitting record highs as I write these words. And yet, not much has changed since 2008 or since Mr. Twain wrote those humorous words – bankers control the money supply, and just when you need the money most, they are there holding all the umbrellas.

I have no problem with bankers, personally. Some of my best friends are bankers!

In fact, as investors we’ve been taught to use “other people’s money” (also known as OPM) as leverage to help us gain traction in real estate or to get ahead in our business. Other solutions include getting a business line of credit to buy new equipment, or securing a mortgage on an investment property to renovate and flip a property. These are the standby solutions used by many Americans.

But ask yourself – who are the “other people” when OPM is your strategy for leverage? (Remember, leverage can work both ways – for ​and​against you!) And what do other people want so badly that they’re willing to part with their money and hand it to you? Were you just handed an umbrella on a sunny day?

When banks control the environment where your money lives, they win every time. When you control the financial environment in which your money lives, you win.

34% of all American income goes to servicing debt. If time is money, as the old saying goes, that means a full one-third of the day is spent working as slaves to a bank! Think of how many folks you know who are in debt up to their eyeballs and working 60+ hours a week, or stressing over non-paying tenants, or feverishly rushing from property to property, hoping they can sell a property before the balloon payment comes due.

For many real estate investors, the road to becoming a wealthy landlord turned south toward the highway of serfdom, with their banker holding the upper hand.

Is there any other way? How can someone who has skill and passion for real estate or their business keep control and a sense of sanity amidst a world gone insane? Is there a way to break free of financial slavery to the banks?

Yes, it’s simple.

Fire your banker!

Where is it written that you have to service your debts and pay off a banker before you can enjoy the fruits of your investment? Who says you have to pay interest on your properties, effectively turning all your real estate assets into liabilities? Where did we get the idea that banks were the only ones who could provide the function of banking in our society?

You can be your own source of financing – you can rid your financial portfolio of your banker and provide the function of banking yourself.

How? The answer may shock you. I’m talking about a modernized form of dividend-paying whole life insurance. It works like a source of capital, a bank, to provide a guaranteed pool of money liquid and available for whatever you need. The funds you accumulate in your life insurance grow safely and predictably every year, guaranteed – no matter what’s happening in the stock market. You can use the equity in your policy like a line of credit to yourself – and you have complete control over how, when and if you pay your money back to your policy. You are in complete control of the entire process.

When most people see the words: whole life insurance, their mind turns off. Mine sure did! I was taught to avoid whole life insurance even in my earliest days as a financial planner. Since then, I’ve come to see how useful and valuable a ​properly structured, dividend-paying​whole life policy can be, when issued from a mutual life insurance company that offers non-direct recognition loans. This vehicle helps my clients overcome the inertia of opportunity cost, accumulate a powerful warchest of capital, and deploy liquid capital for their real estate ventures.

It matters where your money lives. As a CERTIFIED FINANCIAL PLANNER™ I have investigated nearly every financial strategy available to investors. Well over 400+ products are available and tens of thousands of uses of those products have been hocked and sold to folks looking for that golden goose that will just help them sleep better at night. Financial pundits and Wall Street advisors will tell you that whole life insurance is the devil, and while I’m sure I’ll be ostracized by mainstream financial advisors for saying this, I think every person should at least KNOW that becoming your own source of financing through a properly structured whole life policy is an option worth investigating for yourself. Besides, if mainstream financial advice got us into the mess we are in, maybe it’s time for a new way of thinking!

We’ve had two major market crashes since the year 2000. Do you think another one will happen in your lifetime? Do you want your reaction to the next market crash to be the same as the last one? If you’d like to not only protect yourself from the next recession, but actually anticipate and take advantage of it, prepare for it now by doing what the banks do, not doing what they tell you to do. Banks purchase a huge amount of life insurance to run their businesses. Prepare by becoming the banker by using a form of capital that banks themselves take advantage of (Google “Bank Owned Life Insurance” to see what I mean).

Imagine we’re in the middle of another financial calamity. Everyone is seeing their 401(k) values drop and real estate prices are plummeting. Your friends are nervous about losing their jobs.

But instead of fear and instead of begging a banker to lend you his umbrella, you’ve established yourself as your own source of capital, using the cash value in your properly designed life insurance policy. You’re in control. When you see the real estate values crashing, instead of fear, you see opportunity. You borrow from your own policy’s cash, and within 3-5 days your policy’s cash value is direct deposited into your bank account and you’ve got cash at closing. No tax obligations, no government red tape. You are in control.

With this kind of leverage, the kind of leverage you own, you can borrow from your policy and still have it earning interest as if you did not take the loan. You read that right. That’s a rare feature often misunderstood and overlooked by most insurance agents. And when it’s properly implemented into a policy, you overcome the biggest hurdle in the financial universe – opportunity cost, and giving you uninterrupted compound growth – what has been referred to as the 8th Wonder of the World. You can pay your policy back on your own terms, when and if you choose. Do you think that will make you more or less competitive as an investor? Could this help you with more than just investing? How about buying the stuff of life – cars, medical expenses, paying off debt… which financial situation would it NOT make sense to be the banker?

The only thing better than being debt free is to be the banker. Then you’re the one lending the umbrellas!

There’s more to this than just picking up the phone to call your local insurance guy. Most insurance agents (and certainly most Wall Street brokers) have ​never​heard of this strategy, and you don’t want to put your money with an “I’ll just Google it” advisor. If you’d like to talk to someone who has been specially trained and authorized to specifically design a Bank on Yourself policy as described above, please contact us at ​[email protected]​or call us at 1-800-962-9141.