Here’s Your Invitation To Ignite Your Investment Performance

/in , /by

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.

 

 

Here’s The Capital You Need

/in , /by

By Dana Bersch

There’s a whole buffet of real estate deals out there, but with powerful unsecured credit lines from Stonebridge Capital Group, you can cherry pick the deals you want on-demand.

At Stonebridge Capital , we don’t believe you need a winning lottery ticket to realize your financial dreams. There is a constantly moving “good luck conveyor belt” in front of today’s business owners, entrepreneurs, and real estate investors. The catch is that “you need the money to take advantage of those opportunities, and good deals simply won’t wait for you to find the money.”

The Biggest Problem You Face Today

The most pressing issue on the current landscape isn’t a lack of deals, buyers, or rentersDana “the biggest problem facing business owners today is a lack of access to capital.”

The data shows that most businesses fail because they just run short of cash flow. They can no longer pay the bills, push out great marketing, or seize on the best opportunities. Some fail because they don’t appreciate their need for funding, or how much they need. Others are stuck with rigid funding sources and arrangements that don’t serve them well, or simply haven’t found an attractive source of financing. Ultimately the main source of failure is all about the money.

We are constantly reminding all real estate investors and entrepreneurs that they are in business. “Flipping houses is a business.”  As is acquiring and operating rentals, wholesaling, and note investing, and so on.

I know the challenges these entreprenuers face well. As a business owner for more than 30 years,  I understand the pitfalls small businesses have in having access to capital, which is critical for their success.  Before I started  Stonebridge Capital  in 2006 I was involved in several industries, including manufacturing, healthcare,  restaurants, real estate, oil and gas investments, and entertainment.

Over the last decade the Stonebridge team  has been working with hundreds of entrepreneurs, investors, and business owners to help them recognize their need for additional capital, position themselves to obtain the best funding, and  obtain generous lines of credit.

The Unsecured Credit Line Advantage

Stonebridge Capital specializes in providing business and personal lines of credit from $25k to $250k.  We also have access to bank term loans, which can add to the amount of funding.

This credit is working capital that real estate investors, entrepreneurs, and business owners can use for just about anything they need. That means acquiring new properties, down payments, paying down high-interest debt, rehab work, marketing, filling the gaps when tenants are late on rent, etc.

Credit lines offer a huge advantage to real estate professionals. You only pay on the money you are actively using, it helps you qualify for the mortgage or hard money loan, covers expenses while you are involved in your rehab, and once you cash out on deals and pay it down, the money is right there to use again without  the application and appraisal hassles and expenses. We receive a sizable portion of our business from referrals from mortgage brokers and hard money lenders for clients who need to increase their down payment to qualify for their loan and to bridge the funding gap from what they provide too. Additionally, using an unsecured line of credit means no liens on your properties, and never diluting your business ownership or giving up control as with equity fundraising.

Features to Love:

  • Funding in just 10 to 21 days
  • 24 hour preapproval
  • No application fee
  • 0% interest for up to 24 months
  • Stated income
  • New startups OK
  • 680+ FICO score
  • Free guidance on maintaining, optimizing, and growing your credit

Don’t Prejudge Your Credit

If an extra $250,000 could help your business (and you can bet it can), “don’t prejudge your credit.” There are no application fees, and you can find out how much of a line you can get within 24 hours..

Check it out and get pre-approved online at www.sbcapgroup.com/sb or call 480.626.1772.

 

Many U.S. Communities Seeing Real Estate Inventory and Lead Shortage

/in , /by

By Leon McKenzie, CEO, US Probate Leads

As a professional real estate investor, keeping a pulse on the changes in the market can be the difference between having a profitable year and seeing losses in your business.  Seeing these trends and knowing how to react to them can be one of the most critical skills for any individual working in the property business.

One of the most pronounced trends in the market recently has been the tightening of real estate inventory and, consequently, a shortage of leads.  This trend has paralyzed many real estate professionals and prevented them from finding and making the deals that will take their business to the next level.  The contributing factors to this problem come from many areas.  Knowing a bit about the factors that are causing the issue will help you to navigate the current changes in the market.

Contributing Factors to Real Estate Shortage

There are a myriad of factors that may be affecting your real estate business and your ability to find good properties – both on the residential and the commercial side – that will lead to profits and excellent options for your portfolio.  Alan Heavens of the Philadelphia Inquirer reported, “Research from the National Association of Realtors shows the U.S. needs to build 1.3 million to 1.7 million housing units annually to keep pace with yearly household formations averaging 1 million to 1.4 million, in addition to replacing the 300,000 obsolete dwellings that are razed each year.  Statistics released two weeks ago by Freddie Mac, however, show that only 910,000 units were started in 2008 and 550,000 in 2009. Projected starts for 2010 are better, but just 700,000 units.”

Decreased construction means that more homeowners and business owners are staying where they are in terms of their location.  Homeowners and business owners who would like to relocate to a new home or office space simply don’t have any options from which to choose.  This means that people are more likely to pursue the option of remodeling or adding on space rather than going out into the real estate market and looking for a new residential or commercial property.

Heavens said that it can be challenging to try to predict how much space will be needed in any given year, “Predicting how much housing is needed involves a complex calculus that weighs hard statistics (new-home starts, sales of previously owned homes) against a certain amount of demographic tea-leaf reading (household-formation forecasts). Thus, there isn’t complete consensus on what will be enough. ‘At current levels of housing construction and demand, the nation has just about two years’ worth of excess vacant homes for sale and rent,’ said Moody’s Economy.com chief economist Mark Zandi.” Without additional construction, many homeowners and those looking for commercial space may find themselves frustrated.

Here are just a few statistics that support the issues with the current real estate market according to Heavens:

  • “At the current sales pace nationwide, the supply of previously owned houses would take 7.8 months to exhaust, not including the vast “shadow market” (houses whose owners are waiting to sell until real estate recovers) and “distressed properties” (foreclosures and bank repossessions).
  • The inventory of unsold new houses is at 9.1 months of supply, and the volume for sale is flat at 234,000 homes — a 30-year low.
  • At the end of the fourth quarter, 24 percent of all U.S. homes with a mortgage were worth less than the loan balance. The housing vacancy rate in the fourth quarter was 2.7 percent.
  • The U.S. homeownership rate is 67.2 percent, down from its peak of 69.2 percent in fourth-quarter 2004 and decimated by record foreclosures.”

Booming Populations Contribute to Shortage in Some Areas

With the population in the United States continuing to shift to areas with temperate weather, positive economic conditions and those that don’t have issues with fresh water supplies, some areas are seeing a boom in population that no level of construction can meet.  Connor Hyde writes, “The Sugar Land and Missouri City area experienced a record number of home sales in 2014. However, population growth in the area paired with various construction woes has led to a low home inventory, causing a rise in home prices and a dip in sales since January.  Since 2012 Sugar Land and Missouri City real estate agents have classified the area’s housing market as a seller’s market due to the decreasing inventory of available homes and climbing home costs. As a result, many of Fort Bend County’s master-planned communities are struggling to keep up with the demand brought on by the influx in population in the region.”

In fact, these changes to the market have driven up the prices of the homes that are currently on the market.  Hyde quoted a local real estate agent, Shad Bogany, who has seen these changes first hand, “‘We have more customers than we have houses to sell, and we are getting multiple offers on houses,’ said Shad Bogany, a real estate agent with Better Homes and Gardens Real Estate in Sugar Land and Missouri City. ‘We do not have a lot of houses to sell, [and] we have the builders, who have been the biggest pushers of home sales in Fort Bend [County], behind in construction.’”

Issues with construction in population booming areas face a two-pronged challenge – not enough qualified workers for residential projects and not enough funding.  Hyde writes, “Home developers and cities are competing with projects in the Greater Houston area, such as the construction of the new Exxon Mobil campus in Spring and the continued construction of the Grand Parkway. These major projects have contributed to the lag in home construction as there are fewer skilled laborers available. ‘That is exactly why we cannot keep up with building homes fast enough,’ Reichert said. ‘There are just not enough workers out there to build homes [and] builders struggle on a daily basis to find workers.’”

While all of the construction that is being completed in booming areas may seem like a good thing, there are also ancillary issues.  Hyde writes, “The shortage in laborers and influx of construction projects has also led to an increase in the price of construction materials, which has directly caused housing prices to increase, Reichert said. Since 2011 material costs have increased by 11.7 percent and are expected to climb through June 2016, according to the national construction management company Turner Construction Company’s price index.”

Not only are homeowners faced with fewer properties to choose from and fewer new construction projects, but the new construction they do find may cost the average homeowner more money than they can afford to spend.  With rising construction material costs, the associated increase in new construction prices may prove to be too much for homeowners.  These homeowners may end up staying in their current home to avoid the problem.

Changes in Season Effect Inventory

Another contributing factor to the shortage in real estate inventory is the upcoming change in season.  While spring markets generally show expansion as more and more property owners put their homes on the market, the opposite it true during the fall and winter months, especially in the cold weather climates.  Said Lawrence Yun, “As winter approaches, inventory will slide further. Few homes are newly listed after Thanksgiving. Historically, inventory tends to be 15 percent lower in winter than summer. Last year’s seasonal decline was even more dramatic, at 25 percent. We hope we won’t see an inventory decline of that magnitude this winter. Home values rising much faster than income growth will markedly cut into housing affordability.”

The contraction in the market will pull many properties off of the market with buyers still looking to purchase homes.  Being able to find a property during any time of the year is becoming a significant challenge for buyers who want to have several homes they can investigate.

Alternative Leads are the Solution

Is there a way to solve the lack of leads currently occurring in the real estate market?  There is.  For real estate investors who want to continue to profit no matter the market, looking to alternative leads is the best strategy.  These leads – found in the probate, divorce and bankruptcy industries – are the best way for investors to find homes and commercial properties despite the shortage in the United States.

Probate leads are plentiful.  With experts estimating that more than 30,000 probates are filed each month throughout the United States, each and every county has new options of homes, personal property, vacation homes and commercial real estate that are for sale.  Executors, responsible for the sale of property held by someone who has passed, are under an obligation from their local court jurisdiction to sell the property in order to close the probate.  What does this mean for you as an investor?  For real estate investors, probate properties offer discounted prices, sometimes up to 30% to 50% off of current market prices, on homes and other property located in some of the most desirable areas of the region that you work in.  Executors are generally eager to look at all offers for property as they need to sell the property in order to pay medical bills, taxes, legal fees and funeral expenses for their loved one.

Divorce and bankruptcy leads are also another way to find great deals on property.  Usually governed by the local court system, these leads can also provide excellent options for discounted prices.  With divorce and probate leads it is critical to have your attorney review all of your documentation especially during your first experience working in this market.  The language used in the sales documents can be different that is used in traditional offers due to legal requirements.  Ask your legal counsel to ensure that there are ways for you to exit divorce deals if the parties do not cooperate.  As an investor it is not wise to have your deal stalled due to marital discord.

Accessing Alternative Types of Leads

The best way to access these alternative types of leads is to use a lead service that can help you to locate the most current and viable option for your business.  U.S. Probate Leads, the industry leader in lead coordination, offers probate, divorce and bankruptcy leads in every county in the United States.  Our qualified, trained professionals visit courthouses to collect the most up-to-date information on what types of property is available through the probate.  Using an expert service will help you to save time on trips to the courthouse and give you more time to visit properties and make contact with Executors.  We offer a full range of services, including webinars, seminars, books, communication software and even individualized mentoring.  Call us today or visit us at www.usprobateleads.com for more information.

Sources:

http://www.matrixrealestate.com/about-matrix/market-news/slowing-construction-could-lead-housing-shortage-experts-say

http://communityimpact.com/2015/05/06/low-inventories-labor-shortages-contribute-to-rising-home-prices/

http://realtormag.realtor.org/news-and-commentary/economy/article/2012/11/seeds-housing-shortage

 

US Probate Leads
Leon McKenzie
Chief Operating Officer

Leon cofounded US Probate Leads more than 12 years ago and has witnessed its growth during that period from a one city lead provider in the probate space to the only national provider of probate leads for virtually every county in the country.

Leon likes to point out that US Probate Leads is the only company providing Probate-related Real Estate-related leads to Investors and Realtors based on data collected directly from individual probate courts in virtually every state. This has been achieved by building a National Network of Researchers that visit each county one time each month. Leon’s team processes this incoming data and makes it available to individual subscribers for their use in reaching out to highly motivated property sellers.

Overcoming The Unknowns of Texas Tax Deed Sales

/in , /by

By Arnie Abramson

Texas has a thriving economy, population growth and an incredible rental market.  It also has a tax sale structure that is very, very investor friendly, which makes it very attractive to tax lien and tax deed investors alike. But sometimes people don’t profit as much as they could (or may even lose money) because they don’t understand all the nuances of investing in Texas tax deeds.

For example:

Texas is a tax deed state and when you buy a property at the auction it is a judicially caused foreclosure and you get a deed to the property.  You buy the property – not the tax lien. 

The auction bidding starts with the amount owed for taxes plus administrative charges, and the price of the property is bid up from there.  The winning bidder gets the property but the former owner has the right to buy it back, or redeem it.  The redemption period is either 6 months or 2 years, depending on whether or not the property is a homestead, mineral lease or has an agricultural exemption. But, regardless of the duration of the redemption period, it is unlikely that a title policy can be obtained prior to 2 years.

If the previous owner or lien holder does redeem the property, they must pay the investor their costs plus 25% if they redeem in the first year, and 50% if in the second year.  This is a penalty, not an annualized interest rate and it is not prorated, meaning that if they redeem it the month after you buy it you get the entire 25% profit.

Therefore, it is best to buy the properties and rent them out at least until the 2 year period is over.  While this is what we do for our clients, and their returns are almost always in double digits, there is one BIG CATCH!

Until you buy the property and are the owner, you are not allowed to disturb the occupants of the house and it is deemed trespassing if you do (Remember, this is Texas-you do not want to trespass).  What this is means is, THERE ARE SEVERAL UNKNOWNS ABOUT THE PROPERTY UPON WHICH YOU MAY WANT TO BID!

IS IT OCCUPIED OR VACANT?  It is very easy to be fooled when the neighbors park a car in the driveway, cut the lawn, and maintain the outside appearance.  I started buying tax sale properties in Texas in 1992 and I have been fooled by neighbors that do not want to “advertise” a vacant house on their block.

WHAT IS THE CONDITION OF THE INSIDE OF THE HOUSE?  This may be the most important unknown of all.  From the outside, you may not know whether it needs $1,000 worth of work or $30,000, or even more.  Remember, you are advised not to knock on the door and ask to see the inside of the house.

WHAT WILL IT RENT FOR?  MLS, Zillow, etc. are not always accurate.  Remember, you do not know when it was last refreshed, rehabbed or even if everything works.  Many investors do not list their houses for rent on MLS so they are not always so accurate either.

WHAT WILL BE YOUR TOTAL OUT OF POCKET COST?  How would you know if you do not know how much rehab is necessary?

WHAT WILL BE YOUR CASH FLOW AND ROI?  Let’s see, if you do not know how much it will cost you nor what the rent will be, it might be pretty tough to know how much cash flow you will have and what your return will be.

Let me summarize with a question.  WHEN WAS THE LAST TIME YOU BOUGHT A HOUSE WITHOUT YOU OR ANYONE YOU KNOW SEEING THE INSIDE?

The correct answer usually is NEVER!

So, we now know some of the unknowns that can burn you, how are they overcome?

SIMPLE.  GET SOMEONE ELSE TO BUY THEM FIRST SO YOU CAN TURN THOSE UNKNOWNS INTO KNOWNS!

THATS EXACTLY WHAT WE DO FOR YOU !

In fact, that is so simple we call it the TEXAS 2-STEP FOR TAX SALES !

STEP 1.          WE BUY THE PROPERTY

STEP 2.          WE OFFER IT TO OUR INVESTORS AFTER IT HAS BEEN INSPECTED, REHABBED AND RENTED.

Guess what?  You then know that it is occupied, rented, what your total out of pocket cost will be and what your cash flow and return is.

It is completely TURN-KEY!  We do all the work for our ”priority members”.

Other programs offered or to be offered starting in January are:

All day workshop teaching about and how to purchase tax dees in Texas.

Learn and Earn program that pays you while you learn.

Sharevestor for smaller investments to partner with us.

List of services to do what investors want to outsource.

Arnie Abramson

Before becoming a Texas real estate investor in 1991, Arnie Abramson had successful careers as a financial planner and Vice-President of Marketing for a national real estate management company that marketed public Real Estate Limited Partnerships.  He began buying houses at Sheriff Sales in 1992 and has been an investor, landlord, mentor, educator, speaker and property manager for over twenty years.

Arnie is a national speaker on Texas tax deed sales and is the Texas provider for tax deed purchases for several of the national tax lien gurus seen on the Internet.  He is past president of the Texas Real Estate Investors Association (TxREIA), on the Advisory Board of several REIAs  and was a co-founder of the REI EXPO.

His company, Texas Tax Sales Resource Group LLC, HAS THE ONLY COMPLETELY TURN-KEY PROGRAM THAT COVERS THE ENTIRE STATE OF TEXAS.  This includes the research, due diligence, previewing, bidding, inspecting, rehabbing, renting and management of the properties purchased at the Texas tax sales.

Arnie was a speaker at the recent Lone Star Real Estate Expo in Texas and will be participating in future Realty 411 Expos in the near future.

For more information, contact Arnie Abramson or visit the website at www.txtaxsales.com.  His direct email is [email protected]

3 Proven Strategies for Small Business Owners to Increase Cash Flow

/in , , /by

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.

Double Your Return With a Tax Efficient 401k Strategy

/in , /by

By Clint Coons

Most real estate investors are aware they can use their self directed IRA to invest in real estate.  I have quite a few posts on this topic.  If you are familiar with any of these prior posts you probably know I am not a fan of the self directed IRA unless you are dealing with ROTH funds or you plan to buy and hold one property for an extended period of time.  Outside of these two situations I believe the risks of investing through a self directed IRA do not justify the risks given the IRS current interest in these transactions.  My preference is, and will remain, the Qualified Retirement Plan (Profit Sharing Plan or solo 401k) which offers the same, and many more, benefits over the self directed IRA.  Rest assured this is not another post on why you should avoid self directed IRA, you can read these prior posts if you are in doubt, but a strategy wherein you can partner with your QRP to buy real estate.

Consider John who would like to purchase a house for $200,000.  John has a QRP with 150k and personal funds of $100,000.  John could purchase the house in his own name with financing or he could partner with his QRP to buy the house.  To partner with his QRP John and his QRP would need to form a LLC and divide the ownership proportional to the contributions from each member, i.e., if John contributes $70,000 and his QRP contributes $130,000 then the ownership would be divided as follows:  John 35% and his QRP 65%.

If you are familiar with LLCs and their creation, then you should know profits will be split based upon ownership percentages.  If John’s LLC generates $20,000 then John will receive $7,000 and $13,000 will be distributed to his QRP.  From a tax standpoint, John will have taxable income of $7,000 and the QRP will not have any taxable income from its $13,000 in earnings.  Straightforward right. How about the losses?  If you recall, real estate is depreciated over 27.5 or 39 years depending on its characterization.  Depreciation is often referred to as a paper loss because it can be used to offset your real estate income.  In my example, the 200k house (175k allocated to depreciable structures and $25,000 to land) will generate approximately $6,400 per year in depreciation.  John’s will receive $2,240 of the deprecation thereby reducing his income from $7,000 to $4,760 and his QRP will capture the remaining $4,160 depreciation.  This of course does not benefit John because his QRP does not pay tax on its portion of the income.

Wouldn’t it be more advantageous if John could allocate all of the losses to him where then can be utilized.  Of course it would and you can if you use an Anderson Tax Efficient LLC.  An Anderson Tax Efficient LLC will allow John to take full advantage of all the real estate depreciation by specially allocating all the losses to John. The following table shows the tax advantage of using such a structure:

Without QRP

$20,000 net rental income

<$6,400> depreciation

$13,600 taxable to John

<$4,080> taxes

$9,520 net income to John

With QRP W/O an Anderson Tax Efficient LLC

$20,000 net rental income

$7,000 allocated to John

<$2,240> depreciation

$4,760 taxable to John

<$1,428> taxes

$16,332 net income to John and his QRP

With QRP and Anderson Tax Efficient LLC

$20,000 net rental income

$7,000 allocated to John

<$6,400> depreciation

$600 taxable to John

<$180> taxes

$19,820 net income to John and his QRP

9520 x (X)=19820

Partnering with your QRP can produce some desirable tax benefits and opportunities to increase you’re your overall investment portfolio.  However, this is not something you should set up without the assistance of our firm or another qualified advisor experienced in the tax aspects of LLCs and QRPs.  If you would like to explore the creation of this structure, please call my office to schedule a consultation.

Young South Florida Entrepreneur Leads the Way in Enhancing the Community

/in , /by

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

/in , /by

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.

 

Foreign Investors Approach to Real Estate Investing Under $50K

/in , /by

By Priti Donnelly

Real estate investing does not necessarily have to be in your backyard. In fact, with volatile markets around the world, many investors are expanding their criteria to more diverse international real estate portfolios.  International properties can be much more rewarding, both in affordability and higher yield. To qualify for the under $50K option you must meet the following requirements:  have an open mind to foreign real estate, an interest in cash flow rather than capital appreciation;  and interested in investing under $50k.

The Prospect

Now that you qualify, let’s take a look at properties in the Japan market. Outside of Tokyo you can easily find properties from $30K to $50K. Even more impressive is the yield of 6% to 12% because prices haven’t risen as sharply as they have in other cities. For example, in the center of big cities, or first tier cities such as Fukuoka and Nagoya you can expect a yield of 6% to 8%. In second tier cities such as metropolitan Sapporo, you will find properties with a yield of 9% to 10%. In the third tier are smaller townships, albeit with good profiles, a yield of 10% to 12%, all net pre-tax. With an occupancy rate of 93% to 94% properties are usually occupied bringing your investment property immediate income of $250 to $400 a month on average.

Method

To invest in real estate in Japan, investors work with an agent/proxy acting as an extension of themselves for the property purchase and management. This is mainly because of the language barrier. As agents/proxies ourselves, we communicate on investors’ behalf with the property/rent manager, building management company, tax authorities, and insurance company. Since non-residents cannot open local bank accounts, by having a physical address and telephone number in Japan to manage the portfolio, we are able to pay bills, collect rental income, and transfer/accept overseas funds.  In fact, you actually never need to travel to close the purchase, unless of course, you want to take a leisurely trip to take in the culture, historic traditions and breathtaking scenery.

Tenants

Japan is a landlord’s paradise — high, stable and reliable cash flow, very affordable, and because of Japanese ethics, tenants are polite, docile, trouble free, and honest. Living away from your investment property, you will not need to worry about destruction to your property or evictions.  Of course, the same tenant will not last forever but the average turnover is quite stable at 4.5 years for singles’ units, and higher for larger family sized units, sometime up to 15 years.

Earthquake Concerns

While the recent earthquakes have not deterred investors from properties in Japan, we have had concerns about the effect of earthquakes on properties. Under a standard policy, earthquake, tsunami, volcano and flood damages are covered by insurance policies and insurance is surprisingly inexpensive, only a few dollars a month. Since the building itself carries an accumulated funds pool, any remaining losses not covered by insurance are generally covered by the pool. As part of the due diligence process at the time of the purchase, we check the status of the accumulated funds to determine whether 100% coverage is necessary.

Selling Your Property

Since the market moves very quickly in Japan, properties are listed only a few days before they are sold. Therefore, if you decide to sell your property, there is usually a buyer ready to purchase.  Keep in mind the tax implications. A property owner, whether foreign or local, who sells a Japanese property within five years can expect to pay 40% capital gains tax. After five years, the tax drops to 20%.

Generally, our clients invest in properties for cash flow purposes rather than capital gain. If capital appreciation is what you are looking for then your ideal market would be Australia, U.K., U.S. and even Tokyo and at a considerable price.  But, for steady monthly income, where yield is high, cash flow is immediate and properties are incredibly affordable, the real estate market in Japan could be an option to consider to let your cash flow investment journey begin.

 

Priti Donnelly

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 understands the importance of transparency in today’s international market. Through her insight, she focuses on breaking barriers and helping investors feel confident about their overseas property investments.

Website: http://www.nippontradings.com

Using a Probate Lead Service Can Make Your Business Efficient and Profitable

/in , /by

By Leon McKenzie

Have you been working in the probate business for a while and aren’t sure you are making any progress?  Do you find yourself dreading your trips to the local courthouse, frustrated by the amount of paperwork to sift through, when you could be spending time with friends and family?  If this describes your situation, then it may be time to take a hard look at how using a lead service can save you time and help make you money.

Professional probate leads services are designed to fulfill the needs of probate investors in two major areas.  First, by using a probate leads service, you can have access to a customized list of probate leads that are located in the areas that you choose to target.  Secondly, taking advantage of a leads service can make your business run more profitably and efficiently.  These are the main reasons that highly successful probate investors take advantage of a leads service.

Probate Leads Fuel Your Business

When a loved one passes away, they generally leave quite a bit of property behind, which has to be sold by the Executor of the estate.  The Executor is the court appointed representative of the individual who has passed away and has the job of making sure that legal and tax paperwork is filed in a timely manner and, once the assets are sold, will make distributions to heirs as noted by the will or the court system.

Gary Digrazia writes, “In my Probate Real Estate business our life blood, of course, is the leads we work.  Estates have real property which needs to be sold to settle the estate.  Where do we receive the leads and how do we have a constant supply for now and future business?”  This is really a core question for every probate real estate investor to answer.  If you are working in the probate business, then you know that having access to data is critical in order to move your business forward.  As an investor, you certainly can take the time to visit your local courthouse to see the records in person.  When you are beginning your business, this is probably a good exercise in understanding the process of how probates are filed and what is necessary in ensuring that the property is sold and the profits are distributed.  Taking the time to see and understand the process can be helpful in gaining a broad understanding of how the probate process works.

That said, taking half a day on a regular basis to visit your local courthouse can become a drain on your business.  In addition to the travel involved in going, there is the use of gas, the time spent parking, paying for parking if necessary, and then the hours spent finding and locating viable leads.  While having access to viable probate leads is a necessary part of the business, it frankly might not be the best use of your time.

Using US Probate Leads Gives You an Edge

As an entrepreneur, how you spend your time directly influences the ability of your business to succeed.  Going to the courthouse week after week can eat up a good deal of the time that you have available to actually work your business.  While you are at the courthouse, you could be sending communications campaigns, meeting with potential sellers, networking with attorneys that specialize in estate law or speaking to business and community groups in the area, getting more exposure for your business.  Taking the time to dig through records simply might not be the best use of your time.  This is the reason that many probate professionals choose to use a probate leads service.  Said Leon McKenzie, the CEO of US Probate Leads, “Our researchers, numbering into the hundreds, are in county courthouses across the country finding a never ending stream of probate real estate leads. This really puts us in the unique position of being the only source of probate real estate leads with such a broad reach into this niche market. US Probate Leads is second to none when it comes to both the quality and the breadth of research that goes into providing you with prospects that are both well vetted and favorably located for you.”

Having probate leads that are focused on areas and types of property that you are looking for gives you an edge in the real estate market.  While other probate entrepreneurs might prefer to get their leads the “old fashioned way” by going to the courthouse, you can move right to contacting the Executor and visiting the property.  By the time a competing probate investor finds what they are looking for, you may have already made a deal!  This is one of the most compelling reasons to use US Probate Leads.

Why Do Executors Want to Sell?

Once a probate has been filed with the courthouse, in order to have the best opportunity to purchase it at a low cost, you’ll have to move quickly.  Having access to a lead service can keep you abreast of the changes in your area and immediately shows you new filings.  Finding out as soon as a filing has been made gives you a distinct advantage in providing you time to drive by the property and also in contacting the seller.  There are real reasons that you want to have access to this information so that you can make a deal.  While leads are generally good for up to eighteen months, there are many Executors that move at a rapid pace once a loved one has passed away.  They may do this for a variety of reasons.  If the Executor is struggling with grief, it may be easier to simply sell the family home to eliminate the painful memories.  Also, if the Executor lives out of state, they may feel the need to sell as soon as possible.  This is because they will be facing repairs and maintenance of a home that they cannot easily supervise.  Selling the home quickly is a way to eliminate that stressor.  Executors also may need cash in order to pay bills that have accumulated in the individual’s name, such as funeral expenses, tax bills, medical charges or credit card expenses.  By selling the home quickly they will have cash to cover these financial needs.  The Executor may also have no one who is willing to live in the property and may not want to be in the position of having to rent it out.

All of these reasons are what compels an Executor to move quickly when selling a probate property.  If you have access to professional probate leads then you can take advantage of making a deal to assist them in moving on from their family home.  This is an important reason to have a professional lead service identifying options in your area.

The Professional Probate Leads Process by US Probate Leads

It might seem too good to be true to be able to have probate leads delivered into your inbox on a regular basis.  With the US Probate Leads service, you can have just that.  Said McKenzie, “We have relationships with banks and credit card companies that utilize our service. These contacts have allowed us to establish a network of Data Researchers throughout the US. This network coupled with our proprietary data mining tools and processes allow us to access probate data at a cost which allows us to provide reasonably priced information to you. Our network of Data Researchers located throughout the US provides the first wave of data access. We couple that with proprietary tools and processes which allow us to access the data you need.”

What this means is that every probate investor working with the experts at US Probate Leads can have access to probate real estate records without the hassle of sifting through tons of other types of filings, saving time and effort.  McKenzie went on to say, “We provide all estate-related probates. Most probate courts also handle guardianships, conservatorships and cases pertaining to minors. There can be a great deal of excess information in these records – information that does not benefit you as a Probate Investor. We cull those records out and provide you records that have the potential for having real estate as part of the estate.”  Once the record has arrived to your inbox, all you have to do is to contact the Executor and follow up on a regular basis if it is a property that you are interested in pursuing.  This streamlined process is what allows probate investors to net huge profits each and every year.

Finding More than Just Residential Real Estate with Professional Probate Leads

When you choose to use a professional probate lead process like the one offered by US Probate Leads, you may find more than just residential real estate.  Many probate cases have homes, vacation homes, businesses, commercial property, apartments and personal property attached to them.  This means that there are many ways to profit.  Having access to information that will propel your business forward is a powerful tool in a competitive market.

Being able to access information about more than just residential real estate offers your business the ability to diversify as well.  Instead of simply buying and selling or holding and renting residential real estate, you may be able to find a business that will generate additional cash or add commercial or vacation homes to your portfolio.  Having leads gives you this type of flexibility which will allow you to adjust to changing market conditions quickly. 

US Probate Leads is the Expert in Probate Leads Service

Now that you understand why it is critical to have access to a probate leads service and how the process works, it is time to take advantage of what US Probate Leads has to offer.  Whether you are a new probate entrepreneur or you have been in business for a long period of time, you can be sure that adding automated data retrieval will give you a competitive edge in your business investments and access to the newest properties coming on the market.

Contact US Probate Leads today for more information on how we can assist you in accessing probate leads for your county.  Our trained, friendly team of probate associates will help you get set up in just minutes.  And, if you are looking for additional support, look to US Probate Leads for software, books, webinars, seminars and individualized mentoring programs that can take your business to the next level.  Call today!

 

Sources:

http://activerain.trulia.com/blogsview/1936988/how-do-we-find-probate-leads

http://www.usprobateleads.com/FAQ.aspx

 

US Probate Leads
Leon McKenzie
Chief Operating Officer

Leon cofounded US Probate Leads more than 12 years ago and has witnessed its growth during that period from a one city lead provider in the probate space to the only national provider of probate leads for virtually every county in the country.

Leon likes to point out that US Probate Leads is the only company providing Probate-related Real Estate-related leads to Investors and Realtors based on data collected directly from individual probate courts in virtually every state. This has been achieved by building a National Network of Researchers that visit each county one time each month. Leon’s team processes this incoming data and makes it available to individual subscribers for their use in reaching out to highly motivated property sellers.