Liens and Encumbrances Affecting Real Property

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By Dan Harkey

What is a Lien?

A lien is a legal right, usually referred to as a security interest, in real or personal property given to a creditor to hold and possess as consideration for a loan. The creditor /lender has a charging interest against the collateral and may seek possession in the event of default by the borrower. A borrower willfully grants the security interest in a real property by agreeing to sign instruments called a deed of trust or mortgage which are recorded in public records as an encumbrance to the real property in consideration for the loan. A lien refers to a monetary claim which may be attached to one or more properties.

What is an Encumbrance?

An encumbrance refers to a claim and/or agreement to enforce the rights and obligations relating to a property. There are literally dozens of items that may be recorded in public records that create either a lien or an encumbrance on the property. The first will be the original tract map. Then comes utility easements, other easements, government mandated requirements such as historical registries, association by-laws, ownership and partnership agreements leases; various public notices such as notice of weed abatement, notices of substandard condition, lis pendens, property settlements, divorce decrees, subordination, non-disturbance and attornment agreement (commonly abbreviated as an “SNDA agreement”) parking easements, reciprocal usage and parking agreements, signage easements, property tax, federal or state tax liens. etc.

The lending industry sometimes uses the terms lien and encumbrance interchangeably. However, a lien is a monetary charge against the property. All liens are encumbrances, but not all encumbrances are liens. They both create a claim against the property that impacts the transferability and restricts the free use until the claim is lifted or is conveyed.

How does an attachment to a property occur?

In the United States we have a government system referred to as the municipal recorder’s office. The recorder’s office has the task of maintaining public records, documents; and in this case, relating to real estate ownership. Additionally, their task includes recording and maintaining records, making those records available and identifiable to the public. Those public records can relate to both voluntary and involuntary rights and claims.

Each of the above creates a cloud on title that must be dealt with, either accepting to property with the conditions or clouds, removing from title, releasing, modifying, or rejecting the property because the risk of accepting all the conditions is go great or not practical.

Each document that is recorded on the property may also contains an agreement, considerations, prohibitions, and risk that must be dealt with.  A recorded trust deed may have 20-40 pages of legalese that need to be reviewed.  The document may contain clauses such as “due-on-sale”, “due-on-further encumbrance,” etc.  This subject relating to clauses in loan documents should be addressed in another article, because of its tremendous complexity.

Sometimes a property owner may record changes in amends ownership status.  An example would be changing or conveying the title of a property from “husband and wife as joint tenants” to a “revocable family trust”. Another example may be the recording of a divorce decree or a quit claim relinquishing one’s interest in the property.

This body of knowledge and law and the process of recording and maintaining the documents becomes very important when establishing the priority of a lien or encumbrance. California law regards lien priority as “first-in-time, first-in- right”.

What is a first, second and third lien priority?

Lien priority is related to the point of time that the document is recorded in the public records office.  When a document is recorded it is date stamped and given a sequential recording reference number.  If a borrower or his/her title company recorded 3 liens at the same time on one property, that would create a first, second, and third lien, regardless of the dollar amount of each lien. The first lien is considered a senior lien, the second and third liens are junior liens. with the second lien being senior to the third.  After the documents are recorded and scanned into the public records computers the borrower will receive the original documents back for safe keeping.

What insures the order of the recording.  How do you know that the recorder did not make a mistake and record the documents out of order?  You may order and pay for an insurance policy referred to as title insurance from a title insurance carrier. The policy guarantee’s your lien priority position or may be required to pay insured claim.   If you were to go to the recorder’s office yourself, stand in line, and have the documents recorded you could check the sequence of recording yourself.  But, generally your recording of documents is done by a title company in relation to a sale or loan transaction in which you are a principal party.

Let’s assume that there was a first lien of $100,000, a second lien of $50,000, and a third lien of $25,000. on a property that you own.  If you paid off the first lien, the second would become a first lien, and the third would become a second lien. If you were to refinance and consolidate all three liens, then all three liens would be reconveyed and removed off public records. A new recording, with a fresh date stamp and recording number would be placed on public records reflecting a new first lien position. A reconveyance is a written form instructing the recorder to remove and release the lien from public records.

There are written agreements that can be created by principal parties that modify the priority of a lien, or multiple liens. One is called a subordination agreement that can be recorded that may make a lien junior to another lien even though it was recorded earlier with an earlier date stamp.

California law regards lien priority as “first-in-time, first-in- right”. California law also provides for exceptions for some types of liens whereby some liens are given “skipping power” to the front of the line. Government mandate permits certain liens to be advanced so that they become senior in priority to other liens. Mechanic’s liens, meant to ensure that tradesmen and contractors are paid, is an example of a priority lien with “skipping power”. That right is protected by the California Constitution, and further enumerated in the California Civil Code (Section 3110 et seq.)

There are limits, however, on the “skipping power” of mechanic’s liens. These relate to technical requirements such as when the construction began and the process that the claimant must follow to enforce that lien. Even in situations where the mechanic’s lien appears to have been “wiped out” by a senior lien holder at a foreclosure sale, the lien is not automatically expunged. For more specific requirements for mechanic’s liens the lender should work with counsel knowledgeable about construction law and mechanics lien law.

Other exceptions relating to “skipping power” may include issues relating to property taxes, special tax assessment districts, and in some cases homeowner’s or mutual property associations.

As a rule, a written tenancy agreement has “first-in-time, first-in right” priority. Tenants who have written agreements with dates prior to the recording of a new trust deed will have a right of occupancy and enforcement that is senior to the new lien. The tenant’s rights will run with the property until the rights expire or are modified in writing.

A real estate lender may require some modification of the statutory priority by using a written agreement between the borrower, the tenant, and of course, the lender. There are times where it may be in the lender’s best interest not to preserve the tenancy in which case a straight subordination may be used. Any change in the chain of title, whether it is a sale, a new loan or a foreclosure, can cause the priority of tenancy to be lost.

In some cases, the lender may wish to preserve the tenancy of credit tenants in order to preserve the value of the property. A subordination, non-disturbance and attornment agreement (“SNDA agreement”) may be the appropriate document to have recorded. SDNAs are agreements between a tenant and a landlord that lays our certain rights of the tenant, the landlord, and other third parties, such as the landlord’s lender or a purchaser of the property.

If I can answer questions or I refer you to good service providers, I am only a phone call away. Please visit my web site www.danharkey.com to read more of my articles related business, real estate finance, and humor & prospective.

Thank You!

Dan Harkey

Business and Private Money Finance Consultant

Bus. 949 521 7115

Cell 949 533 8315

The article is for educational purposes only and is not intended as a solicitation

 

Justin French on Business Strategy, Leadership, and SDIRA Wealth

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Justin French is the kind of CEO who understands collaboration is the core of innovation. With a growing team that is now nationwide, French’s focus is on the strength of its people.

“I have always believed one of the best investments you can make, as a leader, is in the people you surround yourself with,” French said. “Great leaders never try to do everything on their own. They know a great company is built by everyone performing at their peak level. I spend most of my day working directly with my team and our affiliate partners so I can better equip them to be successful. In return, all of us at SDIRA Wealth are collectively raising the bar and achieving our goals.”

French uses his business-oriented insights to empower his team. He takes inspiration from one of the greats.

“Steve Jobs is a true innovator of our time,” French said. “He wanted to change the world. He did. He made an impact on everyone. He was successful not because he suddenly realized personal computers were his passion. That was not it at all. He knew computers could change the world. He wanted to be part of something bigger than himself.”

French said he admired Jobs’ dedication for making things simple to use, and this simplicity mindset is something French helps cultivate at SDIRA Wealth.

“What we do as a company is remove the barriers of having to deal with headaches of real estate, leaving our clients to enjoy all the benefits of it inside of their retirement accounts,” French said. “Making something simple requires harder work on the front side. You have to have the right talent and put enough time in to define the process. It’s worth it in the end because you have a product that is innovative and easy to use.”

His big-picture thinking combined with detailed actions has helped French make SDIRA Wealth a game-changer for retirement planning.

“The traditional way of retirement investing has been broken for a long time. Many people don’t know the 401(k) plan was never meant to be the main source of retirement funds that it is today, and sadly, pension plans have almost disappeared entirely. The problem is the money people are setting aside for retirement isn’t producing enough of a return for them to actually live on and maintain their standards of living in the future.”

To solve the problem, French said they had to answer three questions. What do people want? What do people need? Can we bring value? SDIRA Wealth’s solution answered all three.

“All great companies solve a problem and create value,” French said. “We don’t look at ourselves as a real estate investment company. We are an education company that provides a great product and solves America’s retirement epidemic. Real estate just happens to be part of that solution. We made the process simple and easy for everyone.”

French and his team are passionate about educating people about the benefits of real estate and Self-Directed IRAs.

“Our team is obsessed with educating others about all the benefits that Self-Directed IRAs bring with the power of real estate,” French said. “Most of the wealthy are already doing it. Look at Mitt Romney. He educated himself and took action for him and his family.”

Many people who invest in real estate are doing it the hard way, according to French.

“People expend a lot of their time finding properties, dealing with the headaches of being a landlord, trying to find ways to finance and leverage, and connecting all the players it takes to make a real estate transaction work,” French said. “That’s ok if you want to be an active investor. But what if you wanted the investment to be passive and to use your retirement dollars while still following all the rules and regulations?”

Complexity mixed with French’s drive for designing simplicity created perfect storm for a solution.

“Where there is complexity there is opportunity,” French said. “When companies focus on making things simple and easy for the end client, that’s when you start to innovate.  We made real estate as easy as a stock.”

French said part of making it easy has been about solving challenges.

“People want protection from market volatility, they want a higher rate of return, they don’t like hidden fees, and they want to have control of how their retirement plan is designed,” French said. “We have been able to solve all four. We do this with our solution by utilizing an asset that has been creating millionaires for decades. That’s residential real estate.”

From those four problems, SDIRA Wealth created the acronym PACT, which stands for People Achieving Change Together.

“PACT started out small but now has become a movement across the country with our affiliate partners,” French said. “It also represents the four main benefits our clients love about SDIRA Wealth’s investment solution, which are protection, acceleration, control, and transparency.”

After building and honing the solution, French started focusing on telling people about it by launching a nationwide affiliate campaign.

“We are blessed to work with some amazing affiliate partners who are wealth advisors, investment firms, and big-name influencers. They have same values and beliefs we do of disrupting status quo when it comes to retirement investing. They have been waiting for something like this.”

SDIRA Wealth helps affiliate partners best serve their clients in their market.

“By offering an additional product to accelerate their clients’ portfolios and reach their goals faster, our affiliate partners stand out in their market and attract more cliental,” French said. “Many say it’s the ace in their back pocket that has allowed them to satisfy their clients needs in ways they were not able to before. Their clients see they truly care to represent all the investment choices allowing their clients to win in the end.”

French said affiliate partners are passionate about solving America’s retirement challenges.

“Our affiliate partners understand the benefits of real estate,” French said. “They are excited about what we are doing and see the benefits of what our solution solves. Every week we interview new potential partners. Most of them come through our website or meet us at events.”

French’s success stems from his skills of finding and developing talent.

“The people you surround yourself will always determine your success,” French said. “One of my mentors always reminded me, ‘Show me your team and I’ll show you your success.’ This has always stuck with me and has always been true. With every successful team I have built over the past 20 years, the one thing I have always been very involved with is the interview process. It is vital we are always selecting natural market leaders and influencers who fit our culture and have the ability to make our company better.”

French has three tips for entrepreneurs who are striving for success.

One, “take time everyday to reflect and be thankful.”

“Always remember to have gratitude for the things you already do have,” French said. “Practicing thankfulness has changed my mindset and my life. It’s easy to think about what you don’t have as we are always working toward building our future. When you develop an attitude of gratitude you become thankful for everything that happens to you in life. Don’t be so focused on the finish line that you forget to enjoy the journey.”

Two, “stay true to your vision.”

“Find something you are good at,” French said. “Create something that will bring value to others. Focus on it. It’s easy to get sidetracked into creating new features, getting involved in wrong projects, listening to too many people’s ideas. In the end if you believe in what you do and your product can solve a problem, you are going to bring value to a lot people. If you can do that, success is just the byproduct of adding value and serving others.”

Three, “write down your goals to create accountability.”

“It’s proven people who have their goals written down attract more success,” French said. “As soon as you start working toward a goal you will encounter resistance and hurdles. By writing things down you will overcome these obstacles by focusing on your goal, making the challenges feel like small road bumps. Even more effective is sharing these written goals with someone who can help follow up with you. If you focus on your goals and take action the results will soon follow.”

Skrrt, Skrrt… Cars and Real Estate…

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Exclusive Article by Fuquan Bilal, NNG Capital Fund

Before I discovered real estate I had a passion for cars. I even owned a body shop as one of my first businesses. I now keep my businesses and investments diversified within the real estate industry. Yet, I still love cars, and there are a lot of great lessons that correlate between the two.

When I was younger (and often lived above my means) I had Range Rovers and new BMWs. I would lease and trade in every year to get the latest model. I liked to live flashy, like many new real estate investors do.

I’ve learned and matured a lot since then.

I now drive this 1982 seven series BMW. I’ve had it since 2010. I restored it, and still love working on it.

It’s one of those great pet projects that is good for distraction and decompression from the business. It recharges me.

 

When I visit places like Miami, I’m still excited by new supercars and exotics. I can appreciate the appeal. But, I’m honestly much happier now with my classic.

It’s durable. It’s a vehicle that lasts. I purchased it as a long term investment. I’ll still have to keep up with maintenance and will make modifications. It’s worth it though. It’s rewarding to make a better product.

Classic cars like these go up in value over time, instead of down. This is another reason it really made sense to me.

I invest in real estate for the same reasons. It’s durable, can go up in value, lasts long term, and can be fun and rewarding to see the transformation when remodeling rental properties.

The cash flow from my apartment investments allowed me to recently purchase a car for my mom too, as she always wanted to drive mine!

I’m so grateful that my smart investments allowed me to go pay cash for a car for her. It was not a brand new car, but it was a strategic investment.

It won’t be long before my kids are ready to drive too. When it’s time, I’ll work with them to buy a mortgage note. Then they can use the income from that investment to buy a car or make payments on one if they really want to go that way.

What are you driving and why?

Investment Opportunities:

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

Invest in Overseas Real Estate to Retire Smartly

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By Matt Malouf

The 401k plan at your workplace is as traditional as apple pie. You know what it is and you can rely on it. You’ve grown up hearing about this kind of investment being beneficial in life. It’s just something everybody does, and what you should do too.

All it takes is landing a job and investing in your company’s 401k plan throughout your career. After that, you’ll have peace of mind that your retired life is covered.

Wrong!

In fact, a traditional 401k model might be jeopardizing your retirement plans and you don’t even realize it! If you too are investing in a 401k plan and not focusing on other potential investment opportunities out there, are short changing yourself.  You must know that typical plans like these only work as retirement savings plans when everything falls into the right place at the right time. That doesn’t happen all too easily.

Do you know many of these plans come with hidden expense and fees ratios attached? For instance, if you invest $10,000 in your 401k plan, over 20 years you could easily more than lose $3,000 to hidden expenses or fees. This is not at all a hypothetical scenario. In fact, many TDFs (target-date funds) have huge secondary fees attached to them.

Also, it is not at all a comfortable feeling or a smart decision to invest in a plan where your retirement depends on the words and actions of many other people. As you may know, the return depends on the month, day, political climate as well as rumors on Facebook and Twitter and so on!

So, what is the premier and smart alternative to secure your retirement while exploiting better opportunities for higher returns?

Well, let me suggest – Overseas Real Estate!

People who truly understand the potential of overseas property investment understand what it brings to your table at the age of retirement. Even if you just compare both of these options side-by-side, you will be shocked to learn how much you have already lost by letting other people control your retirement investment in a typical 401k plan.

Here are some of the endless advantages of investing in the overseas real estate;

Tap into Different Housing Markets

One of the main advantages of investing in overseas property is that you can tap into other growing real estate markets.  If you select the country wisely, you are more likely to find a market that is far more profitable than the one in your country.

You can spread your fortune by making property investments in different overseas countries. On the contrary, if you invest the same amount in your home country, the amount of money may only help you buy one or two properties. Whereas the same say USD $200,000 can buy three to five properties diversifying your portfolio even more.

All you need to get a good return is invest into a growing market and you will certainly get the benefits from capital appreciation. There is another good way to utilize your overseas property and that is by renting it out. Think about receiving rental income but in another currency. Isn’t that an excellent way to hedge your financial risk?

Holiday Properties Around the World

An overseas property provides you with different holiday opportunities all over the world. This means that if you fancy jetting off to spend summer in some other country, you have got guaranteed accommodation and that too, for free.

The story doesn’t end there.  Overseas real estate also brings another kind of stability besides a financial one. It’s called personal liability. If you own a place overseas, you can always go there if the need ever arises. In short, you can call it your ‘escape hatch’.  A place to write, brainstorm, think and get away from the daily grind.

There are many cases where owning an overseas real estate properly is the first step to fully obtain residency there. Doesn’t owning an overseas real estate property add appeal to your ‘Plan B’?

Income and Investment Diversity

For sure you must have heard of the saying ‘don’t put all of your eggs in one basket’. This saying holds true for almost every other aspect of your life and undoubtedly investment is a major part of them.

So, if you actually want to maintain a safe financial standing for yourself, especially after your retirement, put your eggs in different baskets. Overseas real estate should certainly be one of those baskets you consider in your overall plan.

Investment in overseas real estate does not only offer diversification in terms of investment but also in terms of currency. For instance, if you are a U.S. resident, then having all the money in U.S. market means you are surely at the mercy of just one economy. In other words, if you are keeping 100% of your investment in one currency (like U.S. dollar), your investment future is highly dependent on the fate of the dollar.

Therefore, in addition to having a diverse investment portfolio, if you set up an income stream abroad (like renting out your overseas property), you generate an income stream that is totally independent of the U. S economy and sometimes dominated in some other country.

Never Underestimate the Security of Hard Assets

Remember that in the current economic climate, nothing is a more sensible and smart investment decision than investing in real estate. Particularly, overseas hard assets are the best and most logical investment class to secure a strong long-term value.

Even from the point of view of above-average returns and rental yields, the foreign country rental market can be a lot more lucrative if you find the right country to invest in. For instance, the gross rental yield (average) in the U.S. is around 4.2%. If you compare it with today’s emerging international market, it’s much less. Costa Rica, for instance, has a 8.4% rental yield. Other emerging economies in South America can yield you over 15%.

Let’s face it. From a smart retirement plan perspective, when you combine these benefits, there is simply no comparison. Overseas real estate investment is clearly the winner by a long shot!

The actual point of this discussion is not to discourage or dissuade you from going for a 401k plan at work but to help you think farther and smarter. Venture outside the box, think of the possibilities on how you can diversify your life and retirement. There is no harm in considering overseas real estate investment in addition to a good 401k plan.

Matt Malouf

Author-Investor-Pioneer

http://www.MyLifeWorldWide.com

 

 

 

So… You Want to be a Real Estate Investor…

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By Lou Brown

If you have the intention to be successful in Real Estate, taking a look at what is working for others may be a good place to start…

Let’s understand what you want to accomplish. Do you want to have your own business in real estate?

Do you want to buy and sell, or buy and hold, or deal in mortgages, or buy and renovate, or build, or subdivide, or some derivation of these?

Frequently I meet individuals who just think about real estate investing in terms of a way to make money, without considering the direction to take. In my mind, that’s similar to a teenager saying, “I want to get a job, so I can earn some money.” Well, that’s great… but what kind of job?

With a general goal like “making money” or “being a real estate investor” people proceed based on what they think they should do next. Which may or may not be a smart move.

Think about the traditional process we go through to start earning a living…We start with over a decade of school.

Now, did they teach us a skill to go into business at school?

No, that is NOT what is taught at school… they teach you how to work for someone else! Even courses entitled Entrepreneurship, Business Management, and Business Applications don’t teach what you need to know about creating, and more importantly… sustaining, a viable business. You see, they don’t teach what you need to know about the process of owning and running your own business. They do teach much of what you need to know about how to work for someone else, but unfortunately they do not teach us how to work for ourselves.

Not only are you not taught how to start or maintain a business for yourself, they also don’t teach how you can get wealthy. That’s the process of how to create assets that work and create income for you, instead of you working for it.

So, what can you do to learn this?

1) You must learn from someone who has done it for themselves. 2) More importantly, you must learn and adopt a process to have that happen for you without all the expensive and time-consuming trial and error that comes with creating a business without a path to follow.

Michael Gerber, author of “The E Myth,” stated that 1,000,000 people go into business in the United States each year, but within 5 years, 96% of them are out of business. I don’t know of anyone who has that intent, but that’s what happens.

They, like you, are attracted to creating a business in hopes it will provide a good living and retirement income too. But for 96% of them, that promise, or vision does not come true and they lose the chance to get freedom from the shackles of working for someone else.

Gerber goes on to say that those with the dream of entrepreneurship thought business worked one way when in actual fact successful businesses work in quite a different way… hence, the title of the book, “The E Myth.” He reports that when the entrepreneur follows a different path, 75% are still in business AFTER five years.

What he found is that those who enter business with a franchise are able to build and sustain their business because they have a path to follow… a clear, direct, tested and proven path that leads them right to the money without the risks and pitfalls that so many others fall into.

Seems sorta obvious, right? Think of some franchises…McDonalds, for example, has a system that works. It works worldwide. Follow their system and it’s almost a guaranteed succeed.

Let me relate a story. Years ago, I invested in building a Holiday Inn, (funded using private money). We could have opened that hotel and called it “Lou’s Motel”. That would have saved us a ton of expense, but would it have been an uphill battle for us to find customers? You bet it would! Not only that, we would have had to create our own reservations system, housekeeping training, accounting software, resources for supplies, and all the rest.

Instead, we opted to go with a known brand – Holiday Inn. Now at the time, this was very expensive; tens of thousands to use their name; multiple thousands for their training and more for their software and 8% of every dollar that came in, for the entire length of the franchise agreement was theirs.

Whew! But we opened the doors to an immediate 100% occupancy and understanding of the proper way to manage the hotel, staff, marketing and lots of support. We were able to take their training, tools, technology and team and have an up and running business without having to make it up as we went. That made sense to me -Doesn’t that make sense to you?

So the question you may be asking is…” Does the Real Estate business have such a path?” You bet it does! And you can actually choose the path to follow.

Your real estate investing needs to be thought of as a business – not just buying and selling a house – and just like a business, you’ll want a business plan to follow; one that allows you to build a business that will generate a good income and a future of dependable continuous cash flow for you and your family.

Your business plan needs to cover all the aspects of this confusing real estate business…

  1. Provide for safety and allow for controlled expansion.
  2. It needs to include all the possible profit centers in Buying, Renovating, Managing, and Selling.
  3. The paperwork and processes need to support all the aspects, so profits and risks don’t get overlooked.
  4. It needs to provide a business model that can be easily duplicated regardless of the size or economic condition of the market you are in.
  5. It needs to have a training and support component to allow for adjustments as the market changes.
  6. It should provide branding to benefit from nationwide recognition and marketing.
  7. It should support building a sellable business, so you can exit when you want to without having to liquidate.

In order for this concept to work in your real estate business your business plan needs to include all the necessary Tools, Training, Technology and Team(tm). It needs to be a holistic approach rather than a concept from here, a form from there, a piece of marketing from someplace else all jumbled together like some untested recipe. In fact, that is the recipe for disaster that so many would be investors follow.

And this is why, as Gerber explained, 96% of businesses without a plan will be out of business in such a short period of time.

Does this make sense to you?

So how do you get a true, time tested business plan that works in all locations and takes advantage of the most compelling profit centers in the business – complete with support to be sure that occurs?

You have to look at people who have and have been using a plan that survives the test of time and still produces results. Fads come and go, and so do the cycles of the real estate market, so don’t base your future on a trendy investing “flash in the pan.”

In my 40+ years of running my successful real estate business, I’ve identified the component parts to make a real estate business work – for anyone – regardless of their current net worth or monthly marketing investment.

I developed a system that allows you, regardless of income or background, to build a business that will have all the benefits a franchise offers without nearly the typical investment. It includes Tools, Training, Technology and Team™ … all in one place AND with the component that is the most important – the wealth aspect and huge profit center of holding property.

Anyone who is serious about having control of their financial future should have holding income producing real estate as the center or at least as a component of their portfolio. You need assets that will work for you for the rest of your life.

This is where real WEALTH resides… assets and equity working for you instead of you working for it.

The combination of Income, Depreciation (tax benefits), Appreciation (growth), Equity Build-up (appreciation and mortgage pay-off) and Leverage (using O.P.M. – other people’s money) makes this the IDEAL unbeatable combination of investment benefits usable by anyone in any walk of life.

Because of your involvement with Realty411, you likely have the basic tools already. That is a good start. You may be someone who can see the value in the holistic approach including branding to allow you to take advantage of all the profit centers.

If you understand the benefit of the “franchise concept” (a proven model and system of success that can be duplicated by anyone) and would like to structure your business to run systematically, then you are welcome to take a look at how I’ve structured my business. It’s a model that has provided me with a lifestyle I love and has provided hundreds of other investors with the same.
You can access a free training on this system anytime, 24 hours a day, by going online to millionairejumpstart.com/dealw.

Equipped with the right holistic tools, training and support, you will achieve your goals. My mission and prayer for you, is success in this business that will benefit you and your family for many years and generations to come.

Warmly,

Lou

Certified Affordable Housing Provider

Top FIVE Alternative Financing Available to Entrepreneurs

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by Teresa R. Martin, Esq.

Financing is indeed the most crucial of the puzzle for almost every business. Unless you have access to enough capital to bootstrap your business or raise it from family and friends, chances are, you’ll need a loan or investments.

When a conventional bank loan isn’t right for you, or if you’re looking for an additional injection of capital to grow your company, there are plenty of other options. Here are five alternate ways to finance your startup or grow your small business.

LOVE MONEY

This is money loaned by a spouse, parents, family or friends. A banker considers this as “patient capital”, which is money be paid later as your business profits increase.

When borrowing love money, you should be aware that:

  • Family and friends rarely have much capital.
  • They may want to have equity in your business: Be sure you don’t give this away.
  • A business relationship with family or friends should never be taken lightly.

RETIREMENT FUNDS

As with borrowing money from friends or family to buy a business, some might consider using money from a retirement nest-egg risky. That said , it can often be an effective way to invest in your entrepreneurial endeavors for more and more of today’s business buyers.

As laid out by the government’s ERISA law, you can invest your existing IRA or 401(K) funds to the purchase of a business without taking any early distribution and incurring penalties.

It’s even possible to combine money from your retirement fund with loans and other funding methods for greater flexibility. Many entrepreneurs choose to invest in a business they control because they believe the growth opportunity is greater; and they want to diversify a portion of their retirement holding outside of the stock market.

ANGEL INVESTORS

Angel investors invest in early-state start-up companies in exchange for a 20 to 25 perfect return on their investment. They have helped to startup many prominent companies , including Google and Costco.

Angels are generally wealthy individuals or retired company executives who invest directly in small firms owned by others. They are often leaders in their own field who not only contribute their experience and network of contacts, but also their technical and/or management knowledge.

They tend to finance the early stages of the business with investments in the order of $25,000 to $100,000. Institutional venture capitalists prefer larger investments, in the order of $1,000.000.

In turn for risking their money, the reserve the right to supervise the company’s management practices. In concrete terms, this often involves a seat on the board of directors and an assurance of transparency.

Angels tend to keep a low profile. To meet them, you have to contact specialized associations or search websites on angels.

SELLER FINANCING

Increasingly today’s more business-for-sale transactions are resting on a seller-s willingness to finance at least part of the sale. In a deal that includes seller financing, the seller takes part of the purchase price in cash and the remainder in the form of a promissory note that the buyer will pay back with interest over a period of three-to-five years.

This has become essential; buyers are having difficulty accessing funds through traditional methods, therefore there’s a natural gravitation toward seller-financed business to help offset some of the cost upfront.

Conversely, sellers who continue to say no to seller financing are finding it difficult to close a deal, and as more of them have realized this, there has been an increase in seller-financed businesses on the market. If you’re in the market for a small business it’s important to be aware of alternate funding options, but know that in some cases it’s still possible to borrow from a bank.

Government stimulus and bank policy have been trying to promote ongoing small business lending, although many banks are still more conservative than they used to be about when and to whom they’ll loan money.

CROWDFUNDING

Crowdfunding sites such as Kickstarter and Idiegogo can give a boost to financing a small business. These sites allow businesses to pool small investments from a number of investors instead of having to look for a single investment.

Make sure to read the fine print of different crowdfunding sites before making your choice, as some sites have payment-processing fees, or require businesses to raise their full stated goal in order to keep any of the money raised.

Today’s business-for-sale marketplace is full of exciting opportunities that will allow you to take your destiny into your own hands and with various options available there’s no reason to let a shortage of traditional capital sources get in the way of your dreams.

ABOUT THE AUTHOR

Dr. Teresa R. Martin, Esq. is a motivational speaker, author, million-dollar real estate wealth coach, business strategist, and legal counsel. She is living the life she loves and an teach you how to do the same!

As founder of the Generational Wealth Zone Group, Teresa R. Martin formed the original vision for a group of companies that would help clients create, manage, protect and grow their wealth. She is dedicated to showing individuals and entrepreneurs how to become financially empowered by turning the work they love into a profitable and sustainable business.

 

The Deal of the Century

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By Alton Jones

Is this your last opportunity to create greatness?

For all we know, it might be. That’s certainly how I live my life. But as the holidays come up, I see more people getting into the slowdown mindset. Thinking they won’t be able to do anything between Thanksgiving and new years, they stop trying. There are no good deals to be had this time of year, right?

This mentality is absolutely wrong. I believe that every opportunity might be the last to create greatness. Life is short and uncertain. We’re always existing in one of three zones — green, yellow, or red. When you’re green, you’re kicked back. In yellow, you’re about normal. But in red, you’re working hard every minute, constantly on the move, looking for the next angle and the next opportunity. I’m always in the red zone, and I hate to see people slack off to green this time of year.

Never get a good deal this time of year? I believe that the deal of the century comes along at least once a week. But you have to be operating in that red zone to get it. You have to be looking for the great seller, the private lender who will bring you the deal of the century. You have to be willing to fight to the end to get it.

You also have to deliver value. On our first Rehabs2Riches boot camp, the hotel practically had to kick us all out at the end. I was delivering high-quality content so impactful that the attendees didn’t want to leave. They were scared they’d miss out on the golden nugget that was gonna put them over the top. They stayed until the last minute, the last second of day three, because I delivered value.

I believe that price is only an issue in the absence of value. People don’t care how much you know until they know how much you care. I’ve had people sell their home to me over other buyers not because I offered more money — I didn’t — but because I created a value for them. The home had been their mother’s, and in the family for over 50 years. They needed to know that it was going to be treated with respect.

I understood the emotions behind that, and exercised the golden rule. I asked a few simple questions about what was most important to them, and then showed them they could trust me to respect the house.

I found that deal by operating in the red zone, and I secured it by delivering value to the seller. And it wasn’t really about real estate — it was about building a relationship, because as I always say, we’re in the people business.

And if we’re in the people business, why wouldn’t you be operating in the red zone this time of year? Holiday events, family get-togethers, and business cocktail parties — they’re all opportunities to build relationships and find the deal that will put you over the top. You’re surrounded by people who you should build relationships with, even if they can’t do business with you right now. They might refer you to someone else down the line. But you can’t be dawdling along in the green zone and expect to find it.

The deal of the century is happening this week. Stay in the red zone and go get it.

 

Are You Ready To Live Overseas? Before You Move, Read This.

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-Special Submission by Matt Malouf-

The surge of Americans living full-time and seasonally abroad continues. Currently, The Association of Americans Resident Overseas (AAR) estimates that 8.7 million American reside oversees. Our editors have seen many real estate investors who read our publications make that transition.

Their reasons are varied, but have included: to retire early from a corporate job, to explore other cultures, as a way to stretch their monthly cash flow, to upgrade their standard of living, and of course, for the ever-so-popular amore.

If you’ve been considering moving to Coast Rica to escape that boring 9-to-5 or have always wanted to own a bed-and-breakfast in the Island of Santorini, read on to see if this option suits your lifestyle.

Starting a new life in a new country can be nerve-wracking. You have to understand the new culture and it is difficult when you get labeled as a “foreigner” or an “expat” on first sight. Here are a few tips that can help you adapt to a new life in a foreign county.

Trying New Things

As they say, you should always be willing to try new things, but, of course, you need to draw a line somewhere.

However, there are a lot of people out there who are afraid to eat new things, let alone experience extreme sports and adventure. This is the fear of the unknown and many research studies suggest we fear uncertainly more than a known bad outcome. Some of the questions that come to mind when people want to try new things are what if that country is dangerous, what if I drown and what if I don’t like the new dish.

It is natural for some level of fear to always be present when trying out new things; however, our overactive imagination makes it seem so much worse. Once a person makes up his mind to try new things at every possible turn, he or she will see a reduction in their fears and a thirst for new experiences.

Trying new things also makes us grow. Taking yourself out of your comfort zone and putting yourself where the action is will make us more empowered, open-minded and far from being bored. Afterall, you only live once.

Do As the Romans Do

A lot of people have trouble adapting to new places. Although living in an exotic new land may sound like a romantic notion, many people fail to make the transfer from expat to compatriots when they stick to their old lifestyles.

Most people experience culture shock after they witness a culture so vastly different from theirs. Culture shock slowly sets in and results in depression. This further alienates a person from the locals and makesthem feel lonely and homesick.

So, if you want to live abroad, make sure to open up your mind. Remember, this is not the country from where you came from and your old notions and concepts will no longer serve you. Since you will encounter different rules, observe how other people are acting in that situation so that you can understand what is expected of you.

One of the biggest concern of foreigners is that they are uncomfortable being a “visible minority.” A white person will stand out like a beacon in Nigeria or Japan and is bound to generate some odd looks. But if you adapt to the locals’ customs and follow their lead, you will see that your differences will look less marked.

Also, ask questions. If you feel lost, there is no shame in asking for help. You can always ask for explanation if you feel you have missed something. Also pay attention to not just the words but nonverbal communication to get a better idea of what is going on.

Once you accept change and adapt to your life in a new environment, you will find it has opened venues of opportunities for you and will lead to more thrilling and interesting stuff.

Don’t Wait For Anyone Else

Once you get to your new country, don’t wait for others to give you instructions on how to go about doing your business. Take the initiative and do it yourself. Ask lots if questions. Many Americans will experience a 180 degrees difference when they come to live in India or Egypt. The best way to cope with it is to go out and participate in what the locals are doing. You can learn a lot from actually experiencing things compared to what you are just told or what you read.

Speak the Language

Many English speakers are under the misapprehension that they can get by throwing random words of English and locals will understand them. Hence, they suffer quite a shock when they realize not many people in Asian or African countries speak English.

It is recommended that people who want to live in a new country must at least learn some key phrases in a foreign language so that they can order food or drink or find their way to a hotel. However, knowing the language extensively will enable you to have proper conversations with the locals, which can help you quickly learn about their customs and traditions. It will show how interested you are in knowing about your new country.

Pursue New Activities and Hobbies

In my understanding, if you are learning to live in a new country, you should also try and pursue some new hobbies. Try to explore where you are and what your place is in the greater scheme of things. This will help you look at the world from a different perspective.

One of the best things you can do is to look for a group that matches your interests. Even if you are from the other side of the world, there are always commonalities. Are you interested in cooking and is there a group offering local, exotic cuisine classes? Is there a local who likes to travel the world like you do and have many exciting stories to share? Join them.

If you are feeling isolated, look for a community of expats or start your own group. They will be native English speakers and will understand the norms of where you came from and can offer you words of advice.

Respect Different Cultures

Remember that unfortunate photo of Selene Gomez baring her leg in a mosque while she was on a visit to the United Arab Emirates? Don’t make that mistake. Be responsible and respect other people’s culture and religion.

The first thing you need to do is to accept the fact that there are many different cultures in the world other than just our own. Even if you do not agree with a custom or tradition, remember that it could encompass the country’s value and you need to honor your role as a visitor. An act that may seem simple or trivial to you may reflect something far more significant for a person from that culture. Being open-minded can fill your life with positivity and also encourage friendships with people from different race, culture and backgrounds.

If you follow these few simple rules, pretty soon you will be able to make a new home overseas. So, do you have what it takes?

-Special Submission by Matt Malouf-

Malouf is an International Real Estate Consultant.

For more information, please visit MyLifeWorldWide.com

Malouf has also published a book, please find more information @ https://www.amazon.com/Matt-Malouf/e/B07CGHV3XJ

Network in the “American Riviera” at Realty411 and SB-REIA’s Annual Conference

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Santa Barbara, Calif. — Sophisticated real estate investors from throughout California and beyond will unite this Saturday, August 31st, at the exclusive Hilton Santa Barbara Beachfront Resort, located on 633 E Cabrillo Blvd, Santa Barbara, CA 93103.
The annual expo and conference, which is hosted by Realty411 magazine and the Santa Barbara Real Estate Investors Association, begins at 9 am and takes place in the Fiesta Room.
The 8th Annual Complimentary Real Estate Expo and Conference will highlight numerous renowned companies and speakers, such as: Paul Finck – The Millionaire Maverick – If you are ready to take your real estate portfolio and life to a new level, then don’t miss Paul’s life-changing presentation. Anthony Patrick, New Harvest Ventures – Learn from local rehabbers who are doing numerous transactions in Southern California. Jeremy Rubin – The Friendly Flipper is ready teach you how he left his corporate job for the thrill of full-time flipping in the Central Coast. Mussette Profant – Sterling Sites – Discover the best way to maximize your rehab budget with this renowned architect residing in the area. Rusty Tweed – TFS PROPERTIES – Rusty Tweed has been involved in real estate transactions throughout his entire adulthood, having purchased his first rental at 22 years old in his native home of Toronto, Canada. Soon after landing in Southern California, Rusty began sourcing and flipping foreclosures and has done dozens of real estate flips. Tina Lewis, Social Media Expert, will share some fantastic strategies to significantly expand your social media outreach. This special presentation will focus on social media for Brokers, Agents and Investors! In addition, one of the publisher’s personal brokers, Cindy Eisen, Coldwell Banker Select Realty, will answer questions about the local market and some of the creative strategies she has seen in her long-standing career in real estate. Cindy has been instrumental in helping Realty411‘s publisher in acquiring and selling some of the distressed properties they have purchased and rehabbed since moving to the 805 area code from Los Angeles County.
Plus, guests will have a chance to meet TOP PRODUCERS and PRIVATE MONEY LENDERS from the Central Coast, as well as from throughout Southern, Central, and Northern California. This complimentary event will also have coffee, pastries, and even lunch for early-bird guests (OUR FIRST 25 GUESTS RECEIVE LUNCH TICKET, SO PLEASE ARRIVE EARLY). Realty411 and SB-REIA’s Annual Beachfront Expo is one real estate conference that motivated individuals should not miss.

For additional information or tickets, please visit:

https://www.eventbrite.com/e/santa-barbara-real-estate-investors-expo-with-sbreia-realty411-tickets-61493386374

Marketing to Motivated Sellers in Rural Communities

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By Kathy Kennebrook

Since I am the type of investor who purchases properties in multiple counties and in multiple states, I have had lots of experience buying homes and vacant land in rural communities. In fact this is a part of our business that we find to be very profitable for us . I will share with you that buying properties this way is a science in and of itself. There are many different parameters and techniques you need to implement to buy properties in rural areas, but it can be a very profitable business for you.

First of all, if you like to buy vacant land, it can be a real challenge at times. For example, many times the parcels you are looking to purchase will not have a street address, making them more difficult to locate on public records to do a search. You will need plat maps and street maps in order to locate these properties. One advantage to buying in rural areas is that generally speaking the folks at the court house, the property appraiser’s or assessors office and the tax collectors office are usually easier to work with and very knowledgeable about the local area and property.

If you plan on buying vacant land, I would suggest getting a plat map book which shows the subdivisions and the properties in lot and block. The easiest way I found to do this is to go to the court house or property assessors’ office and ask if they have a copy you can buy. If this is not possible, find out if you can make a copy of the one they have. Sometimes they will let you borrow it, or copy it on the premises.

This is another main difference when working in rural areas; the folks at the Court House and Property Appraiser’s office are much more likely to be very helpful to you. Having a Plat Map Book available will make it a whole lot easier to locate the properties you are trying to buy. If it is possible, you may also want to purchase a computer program that shows this type of information so you have it at your fingertips. There are programs like Real Quest or Win2data available for this purpose.

The other thing you will also need is a street map of the community. Usually these street maps will also show subdivision locations. This also makes it easier to find the properties you are trying to locate. You can use the plat and the street map together to locate the specific properties you are interested in making offers on.

If you are looking to buy properties in rural areas there are three main ways to find motivated sellers. One of those is to work with a local Realtor. Usually, they are much easier to work with than those in larger cities. They are usually willing to share information for example on why a seller needs to sell. If the first Realtor you talk to won’t help, find another. You do need to be careful in one respect when working in rural areas with Realtors. Many times the Realtors themselves are investors, so you need to make sure they won’t snipe deals from you if you ask them for help with comparables before you have a property under contract. Also make sure the Realtor you are working with has access to the MLS because some of them do not. Sometimes there are MLS listings in these rural areas that can produce good deals for you as well. Additionally, if you plan to list properties with a Realtor, you want to make sure they get listed on the MLS.

The second way to find motivated sellers is to simply use signage. Usually in a smaller community, the sign ordinances are not nearly as strict as they are in a larger city. When you put signs up in the ground or on poles, they are likely to stay there for long periods of time, so using signage usually works very well to find motivated sellers.

The third way to find motivated sellers is to do direct mail campaigns to non-homestead exempt or absentee owners. The programs I use to do this are called Real Quest and FIS Data.  If you go to my web site at www.marketingmagiclady.com, you will find a lot more information on these companies. These programs can provide plat maps, sales information, property information, comps, and more. I personally use these programs to find motivated sellers in the community I like to buy in.

Another way I use to find all the motivated sellers I need in rural areas is to send direct mail to owners of vacant land whose tax bill has not been paid. This is an easy list to get and can be obtained from the tax collectors office. Usually these are folks who have inherited properties they really don’t want or need and this list is an extremely effective list source.

There is absolutely a lot of money to be made in rural communities and people sell for a variety of reasons. I find the main ones to be estate and probate and pre-foreclosure. All of these situations create wonderful opportunities for buying properties well under their value. Just remember that you will have to be a little creative when you resell or lease these properties since you are dealing in a very small market area. Usually I will advertise in the newspapers of bigger cities surrounding the rural area or work with a Realtor who can get these properties list nationally. There are lots of people who are looking for vacation properties in rural areas.

You will also need to set yourself up with a title company who understands your business, even if you have to train them yourself. I know that the first couple of deals I purchased into land trusts I had to explain to the title company. I even provided them with the deed that included all of the duties of the trustee. Once you have them trained, they can be a real asset to your business, especially when it comes to working with out of state sellers.

Buying properties in a rural area is a real learning experience, but I will tell you that if you take the time and the energy to do it, there is a lot of money to be made, and there is almost no competition for these properties at all.

For more information on finding motivated sellers in rural areas and the Real Quest and FIS Data programs, along with all of the other tools you need to find motivated sellers, visit my  website at www.marketingmagiclady.com  I am one of the top Trainers in the country with regard to marketing and finding profitable real estate deals and I offer ongoing support to all of my students and customers. While you are at the website be sure and sign up for my FREE Monthly Newsletter.

Kathy Kennebrook

Kathy Kennebrook is the ultimate success story. She spent over 20 years in the banking industry before discovering the world of real estate. After attending some real estate seminars this 4 foot 11 mother of two got really excited and before you know it she’d bought and sold hundreds of properties using none of her own money or credit.

Kathy holds a degree in finance and has co-authored the books- The Venus Approach to Real Estate Investing, Walking With the Wise Real Estate Investor, and Walking With the Wise Entrepreneur which also includes real estate experts Suze Orman, Robert Kiyosaki, and Dr. Wayne Dyer.

She is the nation’s leading expert at finding highly qualified, motivated sellers, buyers and lenders using many types of direct mail marketing. She is known throughout the United States and Canada as the Marketing Magic Lady. She has put together a simple step-by-step system that anyone can follow to duplicate her success.

Kathy has been speaking throughout the country and across Canada for over 14 years and has shared the stage with Ron LeGrand, Dr. Phil, Dan Kennedy, Mark Victor Hansen, Ted Thomas and Suze Orman to name a few.

Kathy is going to share with you how she generates a seven figure income by mailing a handful of letters throughout the year to highly selected targets by knowing exactly what to send them, who to send them to and exactly how to deliver her message. She will teach you the secrets of pre-screening and automating your marketing and follow up systems to put your entire Real Estate business on auto-pilot.