Realty411 PART 2 - Featuring Terica Kindred with by pliagas

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                      Print • Online • Network | Vol. 4 • No. 2 • 2012       A Resource Guide for Investors

                                                 TERICA KINDRED
                                                 Founder & CEO of

    From Local to Global
         Learn to Invest Outside Your
       Backyard to Accelerate Cashflow
Secret #7 - How do I Make Money?
There are several exit strategies possible
with a note.
                                                    National REIA elects Tim Norris
1. Settlement – borrower to settle at large
                                                      to 2012 Board of Directors
2. Re-sale Re-sell note to a third party
3. Modification – Creating long term
                                                  C    ongratulations to Tim Norris, an investor and president
                                                       of the National Real Estate Insurance Group and Affin-
                                                  ity Group Management, for his recent appointment to the Na-
ROI                                               tional REIA’s Board of Directors. Norris continues his com-
4. Deed in Lieu of – Taking ownership of                      mitment of service to the National REIA, he is a
the property                                                  former board member of the Cincinnati REIA.
5. Foreclosures – Creating leverage                           The National REIA (Real Estate Investor’s Asso-
6. Sell the property – Sell, refinance or                     ciation) is a 501(c) 6 trade association made up of
short sale                                                    investment clubs throughout the United States. The interests of ap-
                                                              proximately 40,000 members are represented by the National REIA.
   If you are looking for the best way to
                                                  One of the changes that Norris is excited about is the implementation of local
invest with returns of over 12% then this
                                                  chapters within the organization, which he feels will help drive memberships into
is for you. Notes can mature at a much
                                                  the organization. Realty411/reWealth magazine is a member of the Santa Barbara
higher rate.
   Asset Ventures doesn’t promise you ex-         REIA, a club affiliate of the National REIA.
traordinary returns each and every time;
however, there have been returns at over
100% or more in some cases.
                                                Retire in Style, Here’s How pg. 17              from where they grew up,” Dannenfeldt
If you want to learn more or invest in                                                          said. “So we feed into locations that have
notes, please contact us. Feel free to visit   other company-managed property. Some             that kind of cultural bias where then we can
our website at       tenants become homeowners in a lease-to-         keep people with us for the long-term and
Or, if you still prefer the personal touch,    own scenario.                                    also attract their family members into our
please feel free to contact our office for       “It’s traditional in the areas that we do      system as well.”
a free consultation on all our services at     rental properties that it’s very rare for peo-   For more information, please visit online:
855-798-1411.                                  ple to move more than a few blocks away

    Want to Make a Fortune in Notes?
    We have the Blueprint for Success


                                  entures LLC (855) 798-1411
   Buy, Hold & Rent in Cleveland

                eet Sean Whalen,                            communities, and this greatly                   by Isaac Newkirk III
                the CEO of BH&R                             aided its transition. The area is
                (Buy, Hold &                                now one of the most expensive        in the business and through traditional
                Rent) Properties                            in Cleveland and Whalen’s            advertising. He firmly believes in the
in Cleveland, Ohio. He started                              career was born.                     necessity of thinking outside the box due
his company three years ago,                                   He says the market in             to the economy becoming increasingly
ostensibly to take advantage of                             Cleveland has definitely leveled     smaller and the market becoming global.
the market downturn, but he’s                               off, as there was no bubble to       The properties of BH&R are turn-key; the
no rookie. Whalen has been                                  burst in the area, as happened       investors buy, BH&R re-habs the property
involved in real estate for 20 years.            in so many other markets (including Los         from top to bottom, and then, they adver-
   He grew up in a depressed area of             Angeles, San Francisco, and New York).          tise for tenants. From there, the in-house
Cleveland. His family eventually moved,          All of his investors are from outside the       property management component of his
but his dad maintained the management            area, most from outside the country (e.g.       firm takes over (continuing to provide for
of the property they owned (and lived in)        Canada, China, Australia). Rather than          the property as if it has never been sold).
and eventually deeded the property to him.       selling to a potential residential customer,    Essentially it’s a worry-free, hands-free
Whalen decided to maintain his residence         Whalen specializes in selling to investors      operation for the investor.
there and work on the property. It was a         (typically they buy more than one prop-            In years past, BH&R had done substan-
fortuitous decision as the neighborhood          erty, he says).                                 tial business with the government through
began to transition with the influx of artists      He gets his customers the old fashioned      its Section 8 Housing Program. That
and new restaurants. Whalen points to the        way: by word of mouth from having               represents a much smaller segment of their
fact that the neighborhood had distinct          previously done a good job for a customer.
boundaries that set it apart from other          He has a lot of relationships with affiliates                          Continued on pg. 42

      True Wealth is Created by Holding Property Long Term
                                                                             We o er completely re-habbed 1 and 2
                                                                             family homes in Northeast Ohio.
                                                                             Home range from $50,000 - $75,000
                                                                             bringing in rent from $700 - $1,100
                                                                             Enjoy a HUGE return on your investment
                                                                             We manage properties
                                                                             We have 20 years experience

                                                                         3Refer a Buyer and Make $2,000!
                                            To learn more about us and view our inventory,
                                                                      visit or call 216-240-7363.                                               PAGE 26 • 2012                                      
 Find Real Deals, pg. 18            them, you’ve got their undivid-        Terica teaches how to Invest Out of State, pg. 15
                                    ed attention and they are ready
there is a strong element of        for your solution to their need.        What I’ve learned in real           your money, but you have the
timing involved when locating          Investor Tip: Pick up a           estate is that the only way you        benefits of the entire asset. It’s
motivated sellers. The most ef-     “cheapy” dedicated cell phone        learn is when you lose. And so         a gold mine.
fective way of getting this as-     exclusively for the purpose or       I would say, ride the backs of
pect of timing to work for you      your motivated seller market-        other people so that you can           Question: What are your goals
is through consistent marketing.    ing. Place this phone’s num-         shorten your losses.                   for 2012?
Direct mail, classified advertis-   ber in all of your ads and use                                              Terica: My personal goal for
ing (both online and off) and       it nowhere else. When it rings,      Question: For as long as I can         this year is to remain healthy.
websites are the tools of the       you’ll know... game on!              remember, the key to personal          Professionally, I want to con-
trade. Use them all. Regardless        In summary, a real deal de-       wealth has always been real            tinue making an impact in the
of the “silver bullet” that was     fined is a property that meets       estate. Is that still the case?        lives of the middle class inves-
just promoted by the last guru      your criteria and a seller that      Terica: I think so. I think it lies    tor by helping them build real
that came to town, it’s still a     will meet your terms. By             in the diversification. When you       estate portfolios that get them
numbers game. The more mar-         knowing, and sticking to, your       compare stocks to real estate,         out of the rat race.
keting mediums working, the         property criteria and minimum        the returns are slower, but right        I want to convert all of the ten-
better.                             terms, finding deals isn’t so dif-   now, you’re able to get double         ants we have into home owners
Step 4 - Answer the phone.          ficult. Take it from someone that    digit returns secured, and the         so they can build a legacy for
Seems simple enough, but it’s       has transformed their investing      tax shelter aspect [of real es-        their families. I would like to
this step that’s most frequent-     business (0 to 60+ deals) in the     tate], plus you have leverage,         continue to expand into more
ly missed. There are many           last eighteen months adhering        so you don’t have to use all           markets, thus creating new
schools of thought on how an        to this wisdom.                                                             jobs, revitalizing more commu-
investor should receive incom-         It’s amazing once you know                                               nities and doing my part to help
ing calls, but in my book there’s   exactly what you’re looking for      fastest growing real estate in-        America rebound from this de-
only one way. Answer the phone      and where to find it how much        vesting podcast on iTunes. Visit       pression.
when they call you. There’s no      more often it appears. To your
better time to talk with a moti-    success!                             for more information and to re-        To reach Terica Kindred, prin-
vated seller than when they call                                         trieve his free real estate invest-    cipal of Out Estate Investments,
you. Because they called at a       Matt Theriault is an author,         ing course “How to Do Deals            please call: 866-488-1820 or
time when it was convenient for     entrepreneur and host of the         — No Money Required.”                  email

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  Why Dallas / Ft. Worth is One
  of the Best Metros in the US
           by Tom Wilson

                                                                  Are there markets that     able housing of top 20 cities ($116,000
      don’t recommend being a                                 have weathered the down-       median Q3 2011)
      real estate investor…un-                                turn well, are superior in     •Central location in the United States at-
      less you have a well-de-                                many of the parameters         tracts companies desiring time zone and
      fined strategy, quantitative                            above, and have had rela-      distribution competitive advantages
goals and are dedicated to go by                              tively calmer waters dur-      •DFW airport is the third busiest in the
the numbers and not by unsup-                                 ing these past few tumultu-    world
ported advice or emotions.                                    ous years?                     •One of lowest cost of living major MSAs,
   My engineering training and                                    Indeed, my experience      yet above average household income
30 years of experience manag-              Tom Wilson         in more than 1,800 unit        •Highest millionaire growth rate in the
ing high-tech profit centers in                               transactions, over 35 years    United States
Silicon Valley taught me how to analyze for has revealed that Dallas / Fort Worth is one     •Strong rental market (95% occupancy Q4
the best return on investment in any mar- of the best real estate investment markets         2011 for single family homes)
ket.                                          in the United States; that is why I chose      •Very landlord friendly
   Today, the principles of analysis remain it for most of my personal portfolio long           Yes, the national economy crisis has
the same. Anyone can do it, however, one term holdings.                                      affected even DFW, but not significantly
needs to be very disciplined and educated The strengths of Dallas / Ft. Worth are:           compared to other MSAs. Texas is the sec-
about the submarkets and products, or ride •Business and financial capital of the            ond most populous state, so there are in-
the coattails of someone who is.              South.                                         deed many home foreclosures, especially
   The primary parameters for selecting •The highest rent per invested dollar for a          since there is such low housing costs and
the best investment markets are:              major economic center in the United States,    consequently a high percentage of govern-
•Rent to purchase price ratio                 and therefore, the highest cash flow           ment backed loans, but in spite of this, the
•Population growth and inward migration       •One of the lowest risk and safest harbors     Texas delinquency and foreclosure rate is
•Employment growth and business climate       in the United States for real estate           relatively low compared to other states.
•Housing affordability                        •Lowest housing price decline from peak;       I believe that these factors are another
•Location                                     only US single-digit depreciation metro        strong indicator of whether a metro has hit
•Cost of living                               •Fourth largest and one of the fastest grow-   bottom yet, and that many cities and states
•Rental market                                ing MSAs (Metropolitan Statistical Area)       have farther to go, so selecting the lowest
•Current and projected market conditions      in the United States. Projected to double      risk metro is as important as seeking high
   Now that speculative investing for fast population to 12 million by 2030                  current cash flow.
profit has gone the way of the last super- •Broad-based economy that has had double             During the last two decades the appre-
model, the wise investor is focused on cash the employment rate growth of the United         ciation average was about 5% per year.
flowing assets and safe harbors.              States during the past decade                  With a five to one leverage with 80% loans
                                              •No. 1 ranked business climate in the Unit-    investors got a 25% return on their down
                                                                            ed States        payments, in addition to the high cash
                                                                            •No state in-    flow. Historically, the last economies to
                                                                            come tax         slow down, are the first to go back up.
                                                                            •Leading            I don’t know when DFW will start ap-
                                                                            MSA for cor-     preciating significantly again, but I believe
                                                                            porate head-     it will be before many other areas, and our
                                                                            quarter relo-    window of opportunity to invest optimally
                                                                            cations and      in any leading area may be shorter than we
                                                                            expansions       think.
                                                                            •Second lead-       In this economy, I prefer to invest in
                                                                            ing MSA in       homes over commercial and multifamily
                                                                            US for For-      products because homes have more liquid-
                                                                            tune 500 cor-    ity, are generally lower risk, appreciate
                                                                            porate rev-      faster, and one can build a “mutual fund”
                                                                            enue             by buying in various neighborhoods rather
                                                                            •Most afford-    than putting a lot of eggs in one address.
             Las Vegas Worst                            Dallas Best                                            PAGE 28 • 2012                                       
                 Dallas / Ft. Worth Education
                  Field Trip, May 4-6, 2012
        Multiple Speakers including Dallas Chamber,
          Property Managers, Product Suppliers,
         Lenders & 3rd Party Investment Experts

     P    arachuting surely is a dif-
          ferent experience than
     just reading about it. Dallas/
                                        your questions on site? That
                                        is certainly a different experi-
                                        ence indeed!
     Ft. Worth is a much sought-           This concise, action and
     after investment city, one that    value-packed weekend is
     you can certainly read up          sponsored by The Real Es-
     about. However, how many           tate Guys and it will sell out
     times can you see it and           quickly. For information and
     have multiple experts teach-       a special discount offer, visit
     ing you, touring with you,         www.tomwilsonproperties.
     and available to answer all of     com or call 408.867.1867.

 Even in a good region, one             can vary tremendously in any
 must be very careful though            general geographical area, and
 in selecting the right product,        only experienced profession-
 neighborhood and professional          als can help you minimize that
 service and management team.           risk.
 Make sure you rely on resourc-             I believe that the wise will
 es that have a lot of investment       not wait and see, but act to
 experience in that region.             grasp the best opportunities
   If I’ve learned anything in          of our lifetime before they are
 investing, it is that variations in    gone.
 performance from the median

                          I M M E D I AT E C A S H F LOW
                          I M M E D I AT E C A S H F LOW
                                                                                      iscover the lowest-risk, highest-quality residential investment properties in the
                                                                                      iscover the lowest-risk, highest-quality residential investment properties in the
                                                                                      country. Using sophisticated methodology, the best investment properties are
                                                                                      country. Using an experienced investor and rehabbed beautifully to secure the
                                                                                carefully selected bysophisticated methodology, the best investment properties are
                                                                                best tenants. With competent property management, and beautifully flow, your
                                                                                carefully selected by an experienced investor and rehabbedinstant cash to secure the
                                                                                best tenants. With competent property management, and instant cash flow, your
                                                                                investment pays worry-free dividends from day one.
                                                                                investment pays worry-free dividends from day one.
                                                                                PROFILE OF YOUR FUTURE PORTFOLIO
                                                                                PROFILE OF YOUR FUTURE PORTFOLIO

          Price $139,000
                                                                                              “Contact me for a
            Rent $1,395
                                                                                              “Contact me for a
Price: $110,000, Builtrenovated, built 2005
          Year fully $1,195
Currently Rented for
                        2001                                                                  free cash flow analysis.”
Price: $110,000, fully renovated, built 2005
Currently4 Bed 2.5$1,195
           Rented for Baths                                                                   free cash flow analysis.”
                                                                                                                               TOM WILSON, President
  Mention REI Voice Magazine and receive one-year of free                                                                      TOM WILSON, President
  Mention REI Voice Magazine andyour first purchase.
 Mention Realty411 or reWEALTH receive one-year of free
       property management with and receive a discount                                                                         408-867-1867
       property management with Trip. Don’t Miss It!
      on the May 4-6 DFW Field your first purchase.                                                                   
                                                                                                                                                                        PAGE 29 • 2012                                                   
 Is It Honest To Use
    A Land Trust?
                     by Randy Hughes            property (helps with day-to-day

                                                management and lease renewal
        have been using Land Trusts for         negotiations).
        over 30 years, but every now and        6. Co-owners want to know that
        then someone will challenge me as       a lien or judgment or divorce of
        to the purpose and “honesty” in us-     one owner will not affect the title
ing a Land Trust to hold title to real estate   to the property.
investments. Let’s clear the air.               7. Out of state owners can avoid
  Recently I was talking to a real estate in-   probate and other legal issues
vestment club owner about speaking to his       upon death — smooth transition
club regarding land trusts. He said, “We do     of succession.
not believe in using Land Trusts because        8. A group of heirs can inherit a
they are dishonest.”                            property held in a land trust with
  He then went on to explain how some-          ease of management (by the di-
one had come to his club and spoke about        rector) and no need for a partner-
Land Trust and that led him to believe that     ship agreement and a partnership

      There are many legitimate reasons to use a
      Land Trust for privacy and asset protection.
the use of a Land Trust was for deception       tax return                                         are many legitimate reasons to use a Land
and taking advantage of people.                 9. Co-operative housing corporations may Trust for privacy and asset protection. No
  I told him that I was sorry that he had       elect to hold title to their land and buildings one will protect your assets like YOU will.
been misinformed about Land Trusts and          in a Land Trust. They could then issue ben- Learn all you can now because “old and
that he should reconsider their use and         eficial shares to their residents in place of cold” matters.
benefits. I went on to review with the club     stock certificates                                                            Ever since 9/11

owner why it is important to NOT have           —simplifying                                                               it gets harder ev-
your name in the public records as owner        control and re-                  andy is a full time real estate inves-    ery year to be pri-
of real property:                               cord keeping.                    tor who purchased his first rental        vate and protect
                                                10. When a Trust-                house in 1969. He has purchased           your assets. Do it
1. A group of investors may be purchasing       ee of a Land             over 200 houses and teaches other investors       now! Don’t delay!
several properties for a special purpose and    Trust signs the          how to put their properties into Land Trusts      I have written a
it may be that the desired result can be best   mortgage (that           for privacy and asset protection. Randy is a      report titled, “50
accomplished if the objective is not made       gets recorded in         national teacher, author and mentor. Randy        Reasons To Use
public.                                         the county court         writes the only Land Trust Newsletter in the      A Land Trust” and
2. Co-owners might desire that the interest     house records)           county and is the founder of the Land Trust       will send it to you
of each beneficiary must be kept private.       the debt will not        University (an institution that teaches real      for FREE. Email
3. An individual owner might not want           show on the bor-         estate investors how to set up and adminis-       me with “50 Rea-
to be hassled with inquiries regarding the      rower’s credit re-       ter their own Land Trusts). Residing in Il-       sons” in the sub-
property.                                       port. Land Trusts        linois (the granddaddy state of Land Trust        ject line and I will
4. A real estate investor might not want his    have been used           Law), Randy knows more about Land Trusts          return this report
competitors to copy his acquisition tech-       by American citi-        and how to link them to other entities than       to you immedi-
niques.                                         zens for over 100        anyone else in the America today. Reach           ately. My email is
5. Real estate investors do not want their      years for good           Randy at or by        randy@realestate
tenants to know they are the “owner” of the     reasons. There           calling him at 1-866-696-7347.                                              PAGE 30 • 2012                                                    
White Rock Capital Creates

 Wealth for Investors                                                                                          by Lawrence Ruano

                 hiterock Capital, Inc.,         offer. Patrick leads the company efforts in
                 started 2012 off with a         the Inland Empire.
                 BANG, This is one of the           Established in Southern California,
                 fastest-growing companies       Edrosolan, who has a life-long affinity
in the real estate market, and it’s one of       for Arizona, and in particular the Phoenix
our top picks for                                    area, has also identified and developed
2012. What’s driv-                                   significant business opportunities and
ing the big increase                                 expertise in the Phoenix market.
in investor interest                                    In constantly changing market
surrounding this                                     places, Whiterock Capital has the
company? Whiterock                                                                                   Anthony Patrick and Richard Edrosolan
                                                     experience and capacity to perform on
Capital is aggres-                                   multiple diverse projects simultane-      extensive experience in raising capital,
sively expanding into                                ously. Working wholesale deals, ex-       arranging project funding, and creat-
both the Phoenix and         Richard Edrosolan       ecuting multiple “fix & flip” projects,   ing “win-win” financing for real estate
California markets.                                  preparing “rent ready” properties for     investments. His efforts have enabled
The brand-new company purchased hun-             long-term hold strategies and managing        Whiterock to maintain a stable source
dreds of properties in the Phoenix area          property are everyday activities to satisfy   of ready funding for the company’s
alone last year, and it’s on pace to double      the needs of their many investors and joint   increasing list of projects.
in 2012.                                         venture partners.                                Whiterock Capital, Inc. provides
   Whiterock Capital, Inc. was born from            Many of Whiterock’s initial projects       individuals and organizations interested
the passion that only real estate investing      were rehabilitation projects. Drawing upon
can inspire. Yet, the owners are grounded        years of Patrick’s experience as a prop-                          Continued on pg. 45
enough to accelerate company growth              erty manager and
by taking advantage of the many benefits         home inspector, the
that today’s diverse market opportunities        company continues
present.                                         to focus on ways of
   Benefits include an ample supply of           reducing and elimi-
deeply discounted properties, historically       nating expenses,
low interest rates, and a growing demand         while improving
for starter homes and cashflowing rental         the quality and
properties.                                      salability of the
   Richard Edrosolan, founder and CEO,           refurbished home.
met Anthony Patrick several years ago at         Consistently, the
a real estate investment seminar. While          bottom line of each
discussing their mutual interests and phi-       and every project is
losophies on real estate, they realized that     enhanced, secur-
they had much more in common than just           ing the delight and
investment strategies.                           satisfaction of their
   Soon thereafter, a successful business        respective venture
model was developed and a vital new              partners.
company born.                                       Edrosolan, who
   Based upon the diverse and well-sea-          has exceptional
soned experience that each of these men          expertise in various
brought to the company, financial success        ways of raising
was attained at the earliest stage of this       capital, has been
relationship. Although Edrosolan has             able to maintain
wide experience within California and            a stable source of
states in the South and Southeast, Whit-         ready funding for
erock chose to focus initially in Southern       the company’s in-
California, specifically in the tremendous       creasing workload.
opportunities the Inland Empire has to           Edrosolan provides                                             PAGE 31 • 2012                                      
One Company, Twice the Cashflow
              by Isaac Newkirk III                            tion, ranking 49th and 50th,     achieve greater cash flow for a fraction of

                                                                  respectively. Investors      the cost of the investment. In high property
         remier Equity Group has                                    have migrated to the       value areas, to earn a positive cashflow
         been one of the most suc-                                   South due to low price    may require a property purchase of several
         cessful providers of cash-                                  points, strong rental     hundred thousand dollars. In comparison,
         flow investment properties                                markets and low prop-       these two markets provide investors with
in the Southeast. The company has                                   erty taxes. Both mar-      affordable cashflow opportunities.
offices in Jackson, Mississippi, and                                 kets have huge upside       For example, a newly renovated 3 bed-
Birmingham, Alabama.                                                 potential as big devel-   room, 2 bath investment property in Bir-
   They are a full-service operation,                                opers are coming in,      mingham with a purchase price of $60,000,
providing turn-key investment proper-                               there are six different    and a monthly rent of $850, minus a prop-
ties, and other real estate services, for                           major automobile man-      erty management fee of $77, minus $40
investors all over the world.                                      ufacturing plants and       insurance, minus $80 taxes, nets a monthly
   Birmingham and Jackson are stable                             modern medical facilities,    cash on cash return of $653, which is an
markets and are not subject to the “peaks &    which serve to stabilize the rental markets.    annual return of 13%.
valleys” present in more speculative areas.      Their mindset is to take the investors          Premier believes that one of the keys to
Premier Equity Group acquires properties       “concerns” out of the equation, and offer       the success of their company is their in-
from multiple sources, including: asset        a “hassle-free” investment process. That’s      house property management team.
managers, banks, foreclosure sources, short    easier said than done, as you know.               Also, transparency is very important.
sales and general listings. Because they get     They offer a unique product to investors,     Owners have access to a web portal, get
the best deals, they are able to pass on the   one that simplifies buying a house, imple-      online statements and can receive direct
savings to their clients. Both Jackson and     menting a top-quality rehab, leasing it out,    deposit of rents. For these important ser-
Birmingham have also been rated by vari-       and placing it with their in-house property     vices they charge only 9%.
ous publications as Top 10 Cashflow Mar-       management team. This process ultimately
kets. The property taxes in Alabama and        leads to steady positive cash-flow.                                     Continued on pg. 45
Mississippi are the two lowest in the na-        In the smaller niche markets, you can

                                                         Justin Harrison - AL 205.616.3761
                                                         Julie Harrison - MS 601.291.0689                                             PAGE 32 • 2012                                       
                                     Is Flipping Property

                        by Kathy Fettke, CEO
                  of the Real Wealth Network

                                   Good for Your Wealth?
            V shows make                                                                                 have had to put down
            flipping houses                                                                              $13,000 to buy real estate.
            look easy, and                                                                               Today that property
            bootcamps                                                                                    would be completely paid
make it seem extremely                                                                                   off, and would have more
profitable every time.                                                                                   than tripled in value.
But in reality, new inves-                                                                               What’s more: you’d be
tors often get burned on                                                                                 earning at least $13,000
their first few deals.                                                                                   rental income per year!
   Everyone wants to                                                                                     The same power of multi-
make a quick buck, and                                                                                   plied growth is available
in theory, flipping could                                                                                today simply because
be a way to do that. But                                                                                 prices are so low.
please heed this warn-                                                                                      Real estate bought
ing: Flipping is not for                                                                                 today could very well be
everyone!                                                                                                worth more than three
   Here are some tips to                                                                                 times its value 20 to 30
help you decide if it’s for you.                                                           years from now. There is no other
                                                                                           investment that delivers cash flow and
The Real Costs of Flipping Property             • Flipping requires hands-on involvement   capital growth like long-term real estate
There are many hidden costs that new            and most working people don’t have the     investments do.
investors fail to calculate on the outset:      time.                                        Flipping is a job. Buying and holding
• The cost of funds borrowed to purchase        • Successful flipping requires that you    property is an investment.
and/or renovate the property                    only invest where you physically live. A
• The cost to sell, including agent fees and    buy & hold investor can invest anywhere,     Kathy Fettke is the founder and CEO
closing costs — estimate 10%                    have many investments working at the          of Real Wealth Network “The Real
• Holding costs, including on-going prop-       same time, and still make money                  Estate Investors Resource.”
erty taxes, interest charges, and insurance     doing other things.                                 Members have access to free
• Cost overruns — always allow a 10%            • A cash flow rental property                           education, resources, and
cushion for the unexpected                      can yield over 10% return after                          referrals to turn-key rent-
• Sales price variations — allow 10% less       all expenses, without the risk of                         al properties around
than what you’re expecting                      rehabbing and trying to sell                              the United States.
• Estimated profit — 10% at a minimum           at the right time.                                        Real Wealth Network
(and if this is all you’re expecting, there     • Rental                                                        has over 8,000
are much lower risk investments out             income is                                                          members, so the
there!)                                         much more                                                           shear power
• Short-term capital gains taxes — poten-       favorably                                                           of numbers al-
tially 35% of your profit. Always talk to       taxed, and                                                          lows the group
your CPA before making any investment.          capital gains can be                                                to acquire
                                                avoided upon sale if a                                             properties at
  As you can see, after you calculate all       replacement property is                                           huge discounts.
repair costs, you’ll still need to be able to   purchased according to                                            Membership is
acquire the property for less than 60% of       IRS 1031 Exchange Rules.                                       free. Kathy is also
current market value.                           • Growth over time, for both                                 host of The Real
  Is it possible? Yes. Is it easy? No.          rental income and capital                               Wealth Show on KABC
                                                growth, works the same as                      Los Angeles and on iTunes and is
  Buy & Sell VS Buy & Hold                      compound interest; it’s one of                 a regularly interviewed guest ex-
  At Real Wealth Network, we advocate           the most powerful tools in an                  pert on ABC, CNBC, CBS Market
buy & hold investing for the following          investor’s arsenal.                           Watch and NPR.
reasons:                                           Thirty years ago, one would
                                             Market Spotlight: San Antonio, TX
                     San Antonio, TX
                     Prosperity Homes
                     and Investments
                     Clay Schlinke
                     ph: 210.771.0861

        he Texas economy and real estate
        market remains on fire with inves-
        tors from around the world flocking
to top Texan cities to add rentals to their
portfolio for appreciation, cashflow and
added stability. San Antonio offers one of
the fastest growing job markets in the coun-
try with a projected 10-year job growth of
12.2%, according to The
city also offers lower business and lifestyle   Q: I understand the military bases pro-           Q: Do you prefer multifamily rentals as
costs than comparable areas and a well edu-     vide a great tenant pool and also eco-            an investor?
cated productive workforce.                     nomic stability.                                  A: I prefer our product because we offer
   To learn more about San Antonio, we in-      A: Yes, all of our proj-                                    several advantages to our in-
terviewed Clay Schlinke, a master devel-        ects are in close prox-                                     vestors, which means higher
oper, investor and CEO/owner of Prosper-        imity — within a 15                                         rents and higher occupancy lev-
ity Homes and Investments (ProsperitySA.        minute drive to all of                                      els. First our units are set up as
com), an online resource for the San Anto-      the major bases in San                                      townhomes with a garage and
nio real estate market.                         Antonio.                                                    backyard. Second, we have 3
                                                                                                            bedrooms with 2.5 baths with
Question: What kind of opportunities            Q. What makes Pros-                                         great amenities that include
are you seeing in San Antonio?                  perity Homes and In-                                        granite counter tops, concrete
Answer: San Antonio has remained stable         vestments unique in                                         stained floors, crown molding
during the past several years and has con-      the marketplace?                                            and built-in niches. Lastly, we
tinued to add jobs and people to our city.      A: We are the only                                          also include a park and pool in
Multiple companies have been moving to          new home builder that                                       our neighborhoods. As a tenant
San Antonio over the past few years and         specializes in building                                     you can get everything at one of
now with the discovery of the Eagle Ford        townhomes, duplexes            Clay Schlinke and his family our developments that an apart-
Shale oil and gas reserve, it is helping with   and fourplexes.                                             ment can offer, but you also get
the continued growth.                           We develop our                                              a garage and yard with no neigh-
                                                own subdivisions                                            bors above or below you.
Q: What is the best part of being an in-        in locations that
vestor and buying in San Antonio?               have high rental                                           Q: How long have you person-
A: Due to our economy and great rental          demand and are                                             ally invested in real estate?
market, it is easy to cashflow in our city.     in strong areas for                                        A: I have been investing since
With the cashflow and with the stability of     future apprecia-                                           graduating college in 1994.
our economy, there will be future apprecia-     tion. We are able                                          I own both single family and
tion of your properties, which all add up to    to give the inves-                                         multifamily properties.
a great investment.                             tor instant cashflow and even equity when
                                                they purchase. We have also been success-       Q: What do you foresee for the San An-
Q: How is the rental market?                    ful in setting up our developments so the       tonio market for 2012?
A: The rental market is at an all-time high     investor can purchase a fourplex building,      A: Based on the last few years, San Anto-
right now. The occupancy rate is 92%.           but later sell them individually as town-       nio has as bright of future as any city in
                                                            homes if they choose to really      the United States. Our government is very
                                                            maximize their return. We also      pro business and you can see that when you
                                                            provide a full two to 10 year       arrive here. In 2012, and beyond, we will
                                                            warranty to the investor to pro-    see continued growth and success in San
                                                            tect their investment.              Antonio.                                            PAGE 34 • 2012                                         
Phoenix Starts Recovery

                     by Wendy Pineda         with the right team, investors can still   and assigning a property management

                                             purchase investment properties that        team.
          hoenix is a great place to in-     will bring them immediate cash flow          Bansal also knows that for some
          vest in real estate. On February   and long term appreciation. However,       investors hands-on research is the only
          9, 2012, released         investing in an unknown market can be      way to develop a real comfort level
          a slideshow on the “Top 10         a huge concern for many investors. Ray     when investing. That is exactly why
Turnaround Towns” in the                                                                           Bansal started a Phoenix
nation. The slideshow placed                                                                       Investment Property Tour,
Phoenix at number two.                                                                             so investors can meet with
  Two years ago, Ray Bansal,                                                                       him, learn how the company
president of USA Property                                                                          works, the many benefits, and
Investing, a company that spe-                                                                     view the market first hand.
cializes in turn-key property                                                                              By attending the
investments, had already pre-                                                                      Phoenix Investment Property
dicted that the Phoenix met-                                                                       Tour, investors can view the
ropolitan area would be one                                                                        workmanship of the rehabbed
of the most promising areas in                                                                     properties, as well as evalu-
which to invest. This has been                                                                     ate the various neighbor-
proven to be true partially                                                                        hoods and view some of the
due to the historically low                                                                        commercial developments
prices coupled with the state’s                                                                    currently enhancing the
commitment on supporting                                                                           Phoenix economy. Along
economic growth in key industries.           Bansal understands this, and with his      with the research and analysis provided
  In a recent article published by the       20 plus years of general construction      by USA Property Investing, investors
Wall Street Journal on March 13 of this      and real estate experience, Bansal has     can now make a truly informed choice.
year, Thomas Lawler, an independent          developed a turn-key investment system     The team at USA Property Investing is
economist declared that “Phoenix has         designed to eliminate concerns and         fully invested in their clients’ success
hit a bottom.” The article also stated       doubts for real estate investors.          and can tailor the investments to suit the
that the low prices in Phoenix paired           Through this process investors can      individual investor’s personal needs.
with the upswing in the economy has          choose from fully rehabbed cashflow-         Don’t have all the cash needed for a
led to an increased demand in hous-          ing properties, some already rented, in    purchase? No problem, USA Property
ing, and not just from first-time home       great family-oriented neighborhoods.       Investing has the resources to help you
buyers. Big and small investors are          The turn-key system allows for USA         achieve your goals. Many financing
snapping up the bargains. In fact, one       Property Investing to handle the whole     options exist, so contact Ray Bansal at
quarter of all properties sold last month    transaction from beginning to end. This    (888) 616-3706 to learn more.
was to an out-of-state buyer.                includes fully rehabbing the property,
  Although it may seem like the              scheduling appraisals and inspections,     Learn about their next tour, at:
window of opportunity is almost gone,        all the way through to tenant placement                                         PAGE 36 • 2012                                  
“W                                             “What We Can BE,

                  hat we can be, we
                  must be,” is one of Dr.

                                                      We Must BE”
                  Maslow’s famous quotes.
Abraham Maslow is the father of human-
istic psychology. He is renowned for his
Hierarchy of Needs and Self Actualization
theories. Most of his writings
are about human motivation and                                            have put them             Just so we are clear about growth ver-
personality. Today, his teach-                                            on the plus 1, but     sus comfort, I’ll give a few examples of
ings are successfully applied                                             they chose to step     how people choose safety over growth:
in fields of business, marketing                                          back to safety and     1. You got angry at your son and decid-
and communication among oth-                                              landed on negative     ed to break off communication a while
ers. Maslow was born in New                                               1, the difference of   back. An opportunity arises to sit down
York 1908 and died in 1970.                                               two points and not     and talk things over, but you take the
   "If you deliberately plan on                                           just one, as com-      easy way out by going into your comfort
being less than what you are ca-                                          monly believed.        zone and watch the ball game.
pable of being then I warn you,                                              Here’s what’s       2. You need to get up early and take care
you will be very unhappy for the                                          worse. Every time      of something important. Instead, you
rest of your life.”                                                       you make such          look at the clock and go back to sleep!
            — Abraham Maslow                                              decisions, the gap     3. You find a good property to invest in
   Dr. Maslow believes human                                              between what you       but at the last minute you’re gripped by
beings have an instinct (need or                                          could have done        fear and chicken out!
impulse) that drives them to be                                           and what you ac-          Recognition is the half way to transfor-
the best they can be. On the oth-                                         tually did grows       mation. So, first examine your own life
                                                 Sam Sadat
er hand, he says that the story                                           wider. Dr. Maslow      and look at moments when you could’ve
of the human race is the story of men and      affirms that all our regrets, anxiety, frustra-   and should’ve gone for growth but you
women selling themselves short.                tions, unhappiness, anger, depression, etc.       chose safety. Then realize that the gap
   So what gives? Let me give you an ex-       lies in that gap which separates growth           where all this negative energy resides
ample. Imagine drawing a straight line that    from comfort or realizing one’s full po-          is dragging you down. Since there’s
goes to infinity on both sides, from one end   tential from settling for less (selling one-      not much we can do about the past, we
to another. Now think of yourself standing     self short.) People take all kinds of drugs       need to take action in the present to af-
in the middle of this line, which we call      for various mental and emotional condi-           fect future. For those of us who insist to
point zero. One side of the line starts with   tions when all they have to do is to pick         live in the past, the famous poet, Omar
plus 1, plus 2, plus 3 and so on to plus in-   growth over comfort and security. Speak-          Khayyam has this to say: “the moving
finity. On the other side of the line, you     ing of which, do you really believe there’s       finger writes and having writ moves on.
have negative 1, negative 2, negative 3 and    such a thing as security in life? If you think    Nor all thy piety nor wit can lure it back
so on to the negative infinity.                about it, it becomes clear that “security” is     to cancel half a line, nor all thy tears
   Dr. Maslow states that at any given mo-     a myth. After all, we have very little con-       wash out one word of it.”
ment, when you are faced with making a         trol over events and what will happen next.          Once you come to terms with your past
decision, you have a choice to move for-       Some schools of thoughts recommend the            and realize you can still do something
ward in the direction of growth (plus side     notion that if you want “security” it’s best      about your future in the present time,
of the line) or step back into the direction   to seek insecurity! By that, they mean to         then resolve to never again step back
of safety (comfort), which is on the nega-     simply allow things to take their natural         into safety when you can choose growth
tive side of the line. So that if you are at   course. That does not mean you sit back           instead. As you begin to make decisions
point zero and faced with a challenge that     and do nothing. Rather, you do the best you       that are more growth based and less on
requires a decision on your part. What will    can but not get attached to the results. Only     safety, you will see that the gap is get-
you choose?                                    in this way you would be able to experi-          ting narrower and narrower. Soon you'll
   What do most people do when confront-       ence a life of joy and fulfillment.               gain control of your life and move in the
ed with problems of life? They usually            Back to our discussion of why the vast         direction of self-actualization, which is,
step back into safety or the negative terri-   majority of people choose comfort over            according to Maslow, where you can re-
tory. The first such decision results in go-   growth almost every time they make a de-          alize your full potential and maintain a
ing back to negative 1. And so they justify    cision in life. Is there any hope of revers-      happy and fulfilled state of being.
by saying, “it’s nothing, I just went back     ing this vicious cycle? And the answer
one step, I can always make up for it lat-     is………….. Yes! It’s possible and you               To your success and life of abundance,
er.” But here’s the catch that most people     won’t need several lifetimes to get it done!
miss. It really cost them two steps and not    You surely can reverse this process but it        Sam Sadat
one! They could have made a decision to        requires effort initially. But in the long run
move forward into growth, which would          your life will be a lot more effortless!                                             PAGE 37 • 2012                                          
Going Global to Meet Demand
    Small Real Estate Company                                                                      winters with little to no snowfall;
    Finds Success Taking its                                                                             •A high rate of foreclosures, al-
                                                                                                        lowing properties to purchased
     Business Model to an                                                                                 and resold inexpensively, pro-
                                                                                                           viding an optimum product to
  International Audience                                                                                    an end buyer;
                                                                                                              •A dollar-based economy;
                     By Robert Feol

                                                                                                                 Miller and Guenther, who
            few short years ago, business                                                                     already held 300 rental
            partners Bert Miller and Hans                                                                     homes between them, had no
            Guenther had a business that                                                                     problem filing in the logisti-
            was primarily focused on de-                                                                    cal blanks, which remained to
livering retail level homes to end users in                                                                be identified for them to pro-
Memphis, Tennessee. Their partnership,                                                                   duce what is, today, a brilliant
which has spanned over 20 years, was                                                                   success story in the making. They
thriving, as they realized their mission                                                            already had a licensed realty broker-
to take on foreclosed, non-performing                                                           age, which was managing their portfolio
real estate, revitalize it,                                                                    successfully. Why not offer that service to
and provide desirable                                                                          investors in the scope of a truly ‘turnkey’
housing to their buyers                                                                        system that provided investors who wanted
while reinvigorating the                                        real estate investors do       to purchase full-service properties in Mem-
tax base.                                                       when their entire target       phis great investment homes that were on-
   Then, the credit crisis                                      sales group evaporates         line and performing
hit and the two partners                                        before their eyes? While
found themselves be-                                            any investors would tuck                    Going the Distance
ing forced to redevelop                                         tail and run, or become        What really sets Miller and Guenther apart
their business model.          Hans Guenther and Bert Miller    complacent in trying to        is their clientele — almost 100% of their
   The so-called credit                                        simply find a new way to        end-user sales are to international investors.
crisis has challenged today’s modern real address the problem of U.S. mortgages be-            Miller and Guenther have traveled exten-
estate investor in a variety of ways, but coming few and far between, the pair opted           sively, spending a significant time in Sin-
for investors like Miller and Guenther, the to ‘take the red pill’ and go a bit further        gapore in 2011 working with their clients,
fallout was a significant one — the major- down the rabbit hole, asking a hard-hitting         and they are scheduled to travel to New
ity of their purchasers were unable to buy and probing question — if our target mar-           Zealand and the United Kingdom in the
homes, period.                                 ket has disappeared, who then IS our target     early months of 2012 as keynote speakers,
   “It was like the hammer falling,” says market?                                              discussing their turnkey real estate system
Bert Miller. “We woke up one day, and            The answer was found, interestingly           to foreign investors. The early prognosis
so many of our pending purchases were enough, outside of Memphis, Tennessee.                   for 2012 anticipates Miller and Guenther
being challenged or falling apart due to         Miller and Guenther had focused so in-        selling about 150 homes to foreign buyers
new appraisal restrictions, HVCC rules, tensely on their domestic market in their              this year, not counting their domestic out-
etc... Changes in credit were hamstringing resident city that they had forgotten the           put and retail, and the end-user sales they
families who wanted to purchase their pri- whole world was, literally, just waiting for        still engage in.
mary residences. We began to realize that them to show up.                                        Establishing a truly turnkey system
our only answer to the problem rested not        They started to reassess the value of their   wasn’t the difficult part of reinventing the
in waiting and hoping things got better, product, and looked at it in its most con-            business model — the difficult part, ac-
but in radically revolutionizing our busi- summate and simple form. Memphis, Ten-              cording to Hans Guenther, was convincing
ness model. There was simply no other nessee real estate offered:                              investors that there wasn’t some kind of
way to continue our business in its current      •Incredible cashflow per square foot;         hidden “angle.”
incarnation.”                                    •Low purchase points per square foot;            He adds: “We had so many investors af-
                                                 •A stunningly high per capita rent            ter meeting us and hearing us at seminars
              Enter the Matrix                   al rate (almost 50% of the population         ask us bluntly: ‘What’s the catch? What are
Miller and Guenther had come to a cross-         of Memphis is comprised of renters            you guys hiding? This seems to good to be
roads, not just metaphorically, but literally    seeking rental homes);
speaking. What do two ‘rehab to retail’          •A Southern climate, which had mild                                    Continued on pg. 45                                             PAGE 38 • 2012                                        
The Best Opportunities
                                     …don’t last forever

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       Trading Stocks VS Investing in Stocks
by Tyrone Jackson                    a company whose annual and               A trader takes a different

                                     quarterly earnings are rising.        approach to stocks. A trader
            an you really earn       Historically, increased earnings      is in the game of taking small
            $8,000 profit per        creates pressure on the stock         quick profits. Let’s take a look
            month trading stocks     price to increase. Stocks that        at a company like eBay (ticker
            online? Yes you                    trade above $100 per        symbol EBAY). eBay is cur-
can. There’s a reason                                share have in-        rently trading around $37 dol-
the really rich own                                     creasing earn-     lars per share. Maureen, a
and trade stocks                                          ings. In the     smart, intelligent and attrac-
AND buy real                                                We a l t h y   tive real estate investor and
estate. The                                                 Inves-         entrepreneur, understands that
stock market                                                 tor pro-      to create real wealth she needs
has always                                                   gram we       to be diversified. That means
been a place                                                 refer to      owning stocks and real estate.
to earn fast,                                                t h e s e     She likes investing in Dow
sexy money                                                  compa-         components like MacDonalds,
for those that                                            nies as          AT&T and IBM for the long              Wednesday, two days af-
have a financial                                        “good dates.”      term and using a small portion      ter Maureen purchased her
education. So what’s                                    As an inves-       of her investment capital for       eBAY shares, the stock’s
the problem? Most                               tor, you’re hoping         trading others. One of her fa-      price reaches $38 shortly af-
Americans never seek to be fi-       that the company continues to         vorite stocks to trade is eBAY.     ter the market opens at 9:30
nancially educated themselves,       have success and earning in-             On Monday shortly after the      a.m. eastern time. The soft-

  Isn’t it time you added stock market
trading to your list of revenue streams?
therefore they are locked out        creases over a long period of         stock market opens, Maureen         ware inside of Maureen’s
of the greatest game in the          time, let’s say two to five years.    logs into her online brokerage      account automatically trig-
world… investing and trading         When XYZ’s stock price in-            account and purchases 1,000         gers a sell while she is at
stocks. For way too long the         creases from $100 to $110             shares of eBay at $37. That’s       the gym. When she returns
stock market has been an ex-         and you own the shares, your          a total investment of $37,000.      home, Maureen gets an email
clusive playground for the up-       investment has increased in           She’s willing to sell the shares    and discovers she has just
per class. Today stock research      value ten percent. That means         the second they reach $38 dol-      earned a $1,000 profit from
and the ability to trade is just a   your $10,000 is now $11,000.          lars and capture a quick profit.    the sale of eBay shares. How
click away.                          In the above scenario you only           Maureen is not day trad-         did that happen? Let’s re-
   There are two major ways          have a paper profit. An actual        ing. Day trading requires that      view. Monday Maureen pur-
to earn money in the financial       profit results from selling your      you sit at a computer while the     chased 1,000 shares of eBay
markets. They are investing,         shares.                               stocks are trading and buy and      at $37. Her total investment
(purchasing shares and letting          Once a stock price has in-         sells stocks when they increase     was $37,000. When the share
them increase in value over the      creased, you have several inter-      five to ten cents above your        price reached $38 her 1,000
long term), and trading (buying      esting choices, you can:              purchase price. Most people         shares were sold. Maureen’s
and selling shares very quick-       1. Sell XYZ stock for a profit,       who attempt day trading lose        initial investment of $37, 000
ly). The real estate equivalent      and enjoy your ten percent            money.                              was returned to her account
to stock trading is buying a         return.                                  Instead, Maureen prefers to      plus a one dollar per share
house, fixing it up, and then        2. Purchase more shares and           volatility trade because the free   profit. One dollar multi-
selling it for a profit as soon as   ride the wave of success.             software in her brokerage ac-       plied by one thousand shares
possible.                            3. Find another company to            count will trigger a sell of her    equals $1,000.
   As a stock investor, your in-     invest in using the same crite-       eBay shares while she’s out in         If Maureen can buy and
tention is to purchase shares of     ria that led you to XYZ.              the world enjoying her life.
                                                                                                                         Continued on pg. 46                                                PAGE 41 • 2012                                       , pg. 11                                                                             Spring has Sprung, pg. 9

price, square footage, cap rate, asset specif-   extremely valuable.                             3. New Infrastructure Improvements,
ics, etc.                                           Having thousands of connections on           4. Easy Affordability, 5. Opportunity for
   The platform lists the assets for auction,    sites such as personally Pis-      Appreciation, 6. Tightening Vacancy,
and people are able to deal directly with        cano knows the value of an online network       7. Sales Inventory is Turning.
each other.                                      and wants to allow RealBay’s members                Based on these seven factors, I then as-
   “I’m allowing the buyer and seller to talk    to truly capitalize on the exposure the site    sess the area’s median rent prices. It is im-
with each other direct and connect without       will allow them to have to potential clients    portant to analyze the median sales price,
any regulation – This greatly increases the      as well. The site will have several varia-      quality and quantity of the houses in a given
chances of getting a deal done – The other       tions on the style of listings and auctions     area. The areas offer at least a 1.25% or bet-
sites won’t do this because they afraid of       users may use. “Own it now” and “Best           ter rent ratio (monthly rent/sales price) get
being cut out of the loop and not getting        Offer” selections will be available to peo-     a second look. When it’s time to buy, I look
their fee after the transaction.” according      ple, according to Piscano.                      for houses that will cashflow at just under
to Piscano.                                         Currently, the website is open for the       the area’s median rent. Buying the right
   This helps with the buyer and sellers         public to create accounts at no cost. It is     property is only a small step in investing
coming to an executed transaction faster.        a traffic-based website and sponsored op-       success. The biggest factor of profitability
The website attracts global buyers and           portunities will be available soon to spe-      is keeping your property rented. A lower
each buyer and seller is different and the       cific service providers that would like to be   rent range will expose your properties to
personal relationship of direct contact is       showcased to members when those mem-            the largest group of potential renters in the
                                                 bers need them the most.                        area and let you select the best tenants.
  Buy, Hold & Rent, pg. 26
                                                    “In the future, we envision a site where         So, going back to the question — “ Is it
                                                 users pay nothing and we truly become           time to buy real
business at present, primarily due the in-       a free real estate marketplace and social       estate and if so,
creased difficulties of potential clients get-   network, driven by our members activity         where?” — Yes
ting financing. Many Section 8 properties        similar to Facebook,” Piscano explains.         it is the right time
have been located in neighborhoods that             The site will allow for networking con-      to buy. Where?
have added to the problems in acquiring          nections between REALTORS®, investors           In a market that
buyer-financing. BH&R determined that            and different types of real estate service      will provide you
buying in the more upscale neighborhoods         providers in a busy and exciting online         stable, depend-
significantly increased the prospects of a       marketplace.                                    able cash flow for the long term.
positive return for investors. The much
lower turnover rate in these neighborhoods       For additional information, be sure to          Contact Lori Greymont at 888-298-0652
was greatly aided by the tenant base. It’s       visit                 
the age-old real estate mantra of “location,
location, location.” Whalen believes that
if you focus your efforts in areas where           Rapid Property Analyzer (RPA), pg. 22
people want to live, you’ll get a different
client and a different tenant base. They’re        tematic process to help you evaluate          then evaluate any property he looks at
only buying out in the suburbs these days.         potential property for investment pur-        against the same criteria. Hence the con-
   BH&R’s investors don’t usually worry            poses.                                        sistent, repeatable results all profession-
about the need to get financing. Almost               By using this software the investor        als look for to evaluate their work.
all deals are sealed with cash; with many          evaluates each property the same way             Just like the serious golfer who buys
clients using savings and retirement funds.        using the same criteria. This approach        the best set of clubs he can, savvy inves-
   BH&R remains aware of the com-                  allows the investor to identify his return    tors need decision-based tools that assist
petitive marketplace, but Whalen puts a            on investment (ROI) using a standard          them in making fast, comprehensive and
20-year plus career on the line. Having            set of rules for evaluating all properties.   accurate assessments of a potential prop-
only specialized in the Cleveland area,               As shown in the table and the charts       erty’s value.
he knows the area like the back of his             on page 22, multiple properties are           Gary Geist is a seasoned real estate in-
hand. It’s a people-oriented business and          displayed side-by-side in numerous il-        vestor with over forty years experience.
he proudly points to the fact that he’s on         lustrations comparing the performance         He has owned property in several states
a first-name basis with all the people that        metrics of each. This enables the inves-      in the Midwest and currently has large
matter. He recognizes that the over $5 bil-        tor to quickly grasp the relative value of    property holdings in Ohio, Indiana, and
lion in construction taking place in Cleve-        one property over another.                    Pennsylvania. He is the owner of Hom-
land will attract investors from the world            As an investor, this is what you need      eReplay, LLC, which is based in the
over. He wants potential investors to know         to be focusing on, relative rates of return   Midwest and provides tools and turn-key
that he’s there to serve their interests.          and values set on the same criteria.          investment solutions to investors world-
                                                      RPA allows the investor to tailor the      wide. For more information about RPA
Visit online at:               software to his individual market and         visit online at:                                               PAGE 42 • 2012                                        
                                                          BiggerPockets Hosts a
  Ate you a Target for a Lawsuit? pg. 23

ing any payments pre-

                                                         GroundBreaking Summit
suming he could buy
another couple years
of free rent. This

time, we waited for
six months (listening                                         he most sophisticat-                             Geraldine Barry, the head
to his empty promises                                         ed investors in the                              of SJREI Association whose
and excuses).                                                 real estate industry                             club was winner of the 2010
                                 Bill Gatten
   When we were finally                               are flocking to Denver,                                  Award of Excellence from
able to effect foreclosure, as per our agree-         CO on March 23rd and                                     National REIA; and Tah-
ment, the lis pendens (Notice of Legal Ac-            24th for the first annual                                ani Aburaneh a self-made
tion) hit the newspaper, immediately luring           BiggerPockets Real estate                                multi-millionaire real estate
the so-called “Consumer Advocates” out                Investing Summit 2012.              Joshua Dorkin        developer and author of Real
from under their respective rocks by the              The event, produced by the                            Estate Riches.
dozens. The particular “extortionist” that            nation’s most popular online real estate        “Our goal is creating this unique con-
Mr. Williams selected agreed to sue us                network, will take place at the Colorado ference is to provide experienced inves-
for “equity stripping” and taking uncon-              Convention Center.                           tors, and those trying to learn, with a
scionable advantage of the poor, gainfully               Over 200 years and thousands of no pressure, no nonsense, and no upsell
employed man who earned approximately                 deals worth of real estate investment environment,” says Joshua Dorkin, Big-
$10,000 per month but refused to pay his              experience will be available to those’s founder and CEO.
$3,500 monthly mortgage payment (for                  attending. Scheduled speakers include           Tickets for the two day event, which
two and a half years by this time).                   some of the most renowned investors includes access to all conference ses-
   At the settlement conference in court the          in the industry, including: Bruce Nor- sions, are $250. For more information,
two opportunists (client and attorney) sug-           ris of the Norris Group, best known for please visit: http://www.biggerpockets.
gested they would settle with us for an even          his California Market Timing Report; com/conference.
$1 million dollars. When we insisted on a
trial, the attorney decided that he’d now
settle for an even $40,000. We countered
with an offer for him to stick his head in

                                                      More Cashflow, Less Cash
a bucket and requested a jury trial. That
turned the tables on Mr. Lawyer, since he
was basically broke (as many are), and not

getting paid by his client, hoping for a set-
                                                           ooking for a way to                           With all the negative me-
tlement and payday. Since he would have
had to front his client’s court costs, he just             jump into real estate                       dia coverage, many investors
gave up (i.e., Williams vs. Land Partners of          by utilizing leverage?                           wrongly assume that investor
American, Va. Est. January 2007).                     Then talk to the Gosser                          loans are impossible to get, but
   The basic lesson to be learned here? Be-           Bighaus Team at Guild                            that assumption is false. Take a
                                                      Mortgage. The team is           Jason & Steve    look at some of their numbers:
cause the property in question was held by
a third-party, bona fide, properly structured         led by Steve Bighaus and Jason Gos- Gosser Bighuas weekly average:
title-holding land trust, all claims of Eq-           ser, who specialize in rental property Total Amount Funded: $330,725
uity and Unlawful Eviction and Wrongful               financing.                                 Equity Partners: $130,275
Foreclosure fell on deaf ears. Without the               “We have techniques and loans that Cash Flow: $1,931.99
land trust, everything would have turned              many lenders do not offer, and usual- Gosser Bighuas monthly average:
out completely differently, and in addition           ly don’t even know about it,” Bighaus Total amount funded: $1,124,087
to our $96,000 and $25,000 court costs to             explains, and adds that they work with Equity partners: $468,913
date, we would have lost the house and                many out-of-state investors.               Positive Monthly Cash Flow: $8,983
been sued for a couple extra hundred thou-
sand dollars to boot.
   Regarding real estate ownership in par-
ticular, some legal advisors will tell you         start with a Land Trust first, then bring in     stead vested in an entity that is designated
that you do not need to use a Land Trust.          the LLC secondarily as the (or “a”) benefi-      to serve as a trustee for the beneficiaries
They’ll often suggest that you hold title to       ciary of the land trust.                         (not for a trust). Land Trusts are essential-
your real property in an LLC instead. This            So, what is a Land Trust? Unlike most         ly privacy tools for real estate asset protec-
is not necessarily bad advice by any means;        trusts, the Illinois-type land trust isn’t a     tion. In other words, they are structured so
it’s just not great advice. If you are interest-   trust per se at all. Despite the terminology,    as to obfuscate discovery by the public of a
ed in setting up the BEST structure to pro-        the corpus of a “land trust (the entrusted       property’s ownership control.
tect you and your real estate assets you’ll        property)” is not vested in a trust: it is in-                                                 PAGE 43 • 2012                                         
by C. Han of 360 Investments                                                     purposes.       of default. The executed reverse quit claim

                                                                                 We m i n i -    deed held in escrow prevents the need to
            s of just recently, a six                                            mize the        go through lengthy and expensive foreclo-
            month Certificate of                                                 risk of our     sure proceedings and allows the lender to
            Deposit (CD) interest                                                loan by only    take title to the property, which lender can
            rate was a whopping                                                  lending to      hold, sell, and/or assign note to a different
0.45%, a 1 year CD was 0.76%,                                                    borrowers       pre-approved refinance borrower. Since we
and a 5 year CD was 1.61%.                                                       who are pre-    loan up to the borrower's maximum loan to
Checking and savings interest                                                    approved        value ratio, typically 70% to 75% minus
rates are 0.52%. Other banks like                                                for the refi-   closing costs, that leaves 25% to 30% eq-
Bank of New York Mellon (BNY)                                                    nance loan.     uity in these properties to further minimize

              How Hard is Your
              Money Working?
announced last year that they will start           We send potential borrowers to our pre-       risk. We hold and escrow the renovation
charging savings account holders 0.13% for      ferred mortgage banker to get pre-approved       fees with new borrowers and provide a dis-
holding their cash. With the stock market       and the banker runs the borrower's credit,       bursement schedule based on the renova-
drops, many people are moving their mon-        financials and then provides a pre-approval      tion list they provided to the appraiser to
ey into a saving or CD just to minimize the     letter with their maximum loan amount            ensure the added value has been made to
loss of capital they experience so frequent-    and loan-to-value ratio. Based on the bor-       the property. Since 2008, we have funded
ly in the stock market. Due to many inves-      rower’s pre-approval figures, we loan up to      over 100 transactions with 0% default rate.
tors lack of resources to other investment      the borrowers’ maximum refinance loan to         We contribute our 0% default rate to our
vehicles, savings, CDs or mutual funds are      value minus their refinance closing costs.       system in which our funds are only acces-
their only options besides sticking it un-      These borrowers are real estate investors        sible to those borrowers pre-approved with
der their mattress. With high inflationary      purchasing distressed properties using our       our preferred lender, whose experience
times, these measly interest rates are noth-    short-term funding so they can make stron-       has proven to close the refinance loan with
ing: $1,000,000 with savings rate of 0.52%      ger offers with quick closings that get ac-      these borrowers based on their initial pre-
earns $5,200 a year / $433.33 a month.          cepted. These borrowers add value to the         approval qualification.
   There are many other investment vehi-        properties through proper renovation there-         Now that we have explained our process
cles that offer much higher returns. Many       by increasing its value and then refinances      for minimizing risks through our lending
uneducated investors think any returns          which pays off our short term loan based         requirements, lets progress to the good
higher than traditional savings, CDs or av-     on this new higher value. The risks asso-        stuff, the returns. We offer our investor
erage stock market returns are riskier, and     ciated our investment lending program is         lending partners 2 points (%) of the loan
that could very much be the case, but you       the borrower’s inability to refinance due to     amount plus 12% interest. We do not pool
will learn how hard our investors’ money        loss of job/income, death and/or real estate     investor funds together. We match each
is working for them while still minimizing      market depreciation lowering value, requir-      investing lending partner to the each in-
risks. There are many titles that coin this     ing borrower to bring funds to close, which      dividual loan. The refinance process can
type of investment activity such as Hard        they may not have. We minimize the risk          take between 30 to 90 days therefore, an
Money Lending, Private Money Lend-              by requiring borrowers to get pre-appraisal      example, if the investing lending partner
ing, Trust Deed Investments, Notes, Being       report(s) with the approved appraisers on        funded $200,000, investor would receive 2
the bank, Mortgages, Bridge Lending and         the refinance lender’s list. We secure our       points (%), $4,000 plus 12% interest only
many other known titles. Our investor lend-     position on title by taking first (1st) lien     payments of $2,000 per month. If the re-
ing partners earn on average of 20% to 32%      position with Trust Deed/Deed of Trust/          finance closed in about 30 days, the total
returns on their money. Our lending pro-        Mortgage (depending on the state). Our           profit would be $4,000 plus $2,000 total-
gram is short term, up to 90 days, offered to   closings also require lender’s title policy,     ing $6,000 and their $200,000 reimbursed
borrowers purchasing residential (1-4 units)    property insurance and a reverse quit claim
real estate for monthly cash flow investment    deed executed and held in escrow in case                                 Continued on pg. 46                                              PAGE 44 • 2012                                        
   Premier Equity, pg. 32               HomeUnion Services, pg. 6             WhiteRock Capital Creates Wealth, pg. 31

   Besides turn-key rentals, the      risk of their first investment.       in participating in the real         to avoid some of the pitfalls.
Premiere Equity Group offers a        They should not just look at          estate market, either as active      Also, Anthony and Richard are
number of products, business          returns on paper — there are          or passive investors, a proven       always available to help in dif-
models, and revenue streams           a number of factors that may          experienced team of real estate      ferent situations.”
that cater to each type of inves-     whack those projections. We           experts dedicated to assisting          ~ Edwin Mizunaga
tor, including:                       are doing webinars to edu-            investors achieve their goals.
   Acquisition Lending: Great         cate investors. They can also                                                 “Since May 2009, I’ve
products for passive investors,       download our white paper:                WhiteRock Capital’s               invested with Whiterock in
currently offering great returns      “Critical Mistakes in Real Es-         Testimonials from Clients:          about six projects including fix
on short term funding for ac-         tate Investing” from our web-                                              and flips, wholesale deals, and
quisitions.                           site www.homeunionservices.              “Learning the real estate         now “buy and hold” cashflow
   Cashflow Properties: The           com. We also invite investors         investment business is difficult,    homes in the Phoenix area. In
company’s specialty, setting up       to “like us” on our Facebook          there are many aspects related       every case, Richard and An-
quality rental property, qual-        page (               to the business not brought out      thony have gone above and be-
ity renovations, in great areas,      homeunion), where we offer            in the “Real Estate Investment       yond to assure the investment
with their in-house property          several tidbits and research          Seminars,” as most seminars          was secure and profitable. My
management division protect-          on real estate investments.           are a market place to sell           plan is to work with Whiterock
ing the investments.                                                        ideas, and not the details of        to acquire ten additional rental
   IRA conversions: Using self-       Q: Do you have any tips for           investing.                           properties in 2012.”
directed IRAs to take advantage       more experienced investors               I have worked with both             ~ Joseph Hobbs
of tax saving opportunities.          who may have lost money               Anthony and Richard and be-
   Pre-rehab purchases and            during the recent bubble?             cause of their combined knowl-       To learn how you can benefit
pre-funding: Pre-fund your            A: Experienced investors are          edge, I have gained a better         from Whiterock’s experience
own deal to insure the lowest         like day traders, they know           understanding of the business.       and rock-solid integrity, go to
possible basis for each transac-      which stock to pick and when          I have more confidence in   or
tion.                                 to buy and sell. The single-          knowing what to do and how           call 877-228-6060.
   Marketing Program: Pay-            family real estate market
ing investors to market for the       hasn’t had the same level of
company and paying up to              published research that other         nating international inves-          began to offer non-qualifying,
$1,500 per sale per client.           markets enjoy. HomeUnion              tor, therefore, faces a unique       non-recourse, private lending
   Premier Equity Group is            is changing this and experi-          challenge when they find that        for each and every property
looking to make 2012 profit-          enced investors can now tap           modern institutional bank fi-        they offer to investors, re-
able for its investors. Premier       into new markets and ana-             nancing in the United States         gardless of nationality. This
Equity Group invites you to           lyze data to reduce their risks       is not favorable to the foreign      establishment of what is es-
visit them on the web at www.         without having to fly all over        national who wishes to take          sentially ‘asset based lending’ and             the country to do this.               advantage of a weak Ameri-           has propelled their business
explore the many investment                                                 can dollar and truly depressed       forward.
                                      For more information, visit:          American housing markets,               Miller and Guenther’s rein-
opportunities available in their
                                             however opportunistic the            vention of themselves holds
Southeastern markets.
                                                                            timing is.                           critical lessons for us all.
  Local Company Goes Global, pg. 38                                            Most banks will just say             The real estate business in
                                                                            ‘no’ to foreign investors who        the past few years has faced
  true!’ And the fact of the mat-     clientele, the pair are espe-         want to apply for loans from         a tumultuous and rocky path,
  ter is, our homes are general-      cially well known for their           American banks. Miller and           one which has seen many in-
  ly returning net yields of 12%      mastery and implementation            Guenther, again, had an al-          vestors fall to the wayside.
  to 15% consistently, which in       of private financing.                 ternative answer that was,              In an industry vertical
  and of itself is quite remark-                                            unbeknownst to them, going           where only the strong truly
  able. It is a testament to the             Private Financing              to have a dynamic impact on          survive, Miller and Guen-
  adaptability and efficacy of              Paradigms, Applied              their business and transaction       ther’s partnership demon-
  the system my partner and I                                               volume — the use and imple-          strates that adaptability and
  designed.”                             As in the United States, for-      mentation of private lending.        perseverance truly carries
     Miller and Guenther are          eign investors are all about le-         By partnering with a local        robust and great rewards, for
  certainly at the vanguard of        veraging their capital deploy-        lender who has just imple-           those strong enough to cross
  the pack of today’s whole-          ment and insuring they are            mented a trademarked private         the finish line.
  sale turnkey providers. But,        maximizing the use of other           lending paradigm created by
  beyond their innovative busi-       people’s money, whenever              a local Memphis real estate          Visit online www.BuyMemphis
  ness model and international        possible. Today’s discrimi-           investor, Miller and Guenther                                                  PAGE 45 • 2012                                        
  Investing VS Buying, pg. 41
                                                  Join our magazine’s
sell her eBAY shares twice per week she          Facebook Group and
will earn $2,000 per week; $2,000 twice          Mingle with Investors!
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   Some of the advantage of trading stocks
online are no closing costs, no attorney         RetireEarlyWithRealestate
fees, and no credit checks. When you buy
and sell the right stocks in a volatile mar-
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                                                  MATTHEW C. MULLHOFER, Attorney at Law
   Again, Maureen is a volatility trader,
not a day trader. She earns big profits from
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stare at a computer screen all day. How is                                   In good times and in tough times
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enjoying income from multiple streams.                                              •   Asset Protection      • Wills & Trusts
   Isn’t it time you added stock market                                             •   Lawsuit Protection    • Real Estate
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NBC’s The Other Half. Send us your feed-                                                           expert how to use
back on this month’s column. We’d love to
hear from you, email us at: feedback@the
                                                                                                 Land Trusts for privacy                                                                               and asset protection.
   How Hard is Your Money Working, pg. 44                                                          Visit Randy's website
through refinance closing, generating a re-                                                          for lots of FREE
turn of 36%. If the refinance took the entire                                                     Land Trust information
note term of 90 days to close, the total prof-
it would be $4,000 plus three payments of                                                             or call him now
$2,000 totaling 10,000, which calculates to           Randy Hughes
                                                      Land Trust Expert
                                                                                                     @ 866-696-7347
a 20% return. Therefore, our investor lend-
ing program makes our investors’ money
                                                      40 Years Experience                          with your questions.
work harder, generating between 20% to
32% returns. Get educated and learn ways
to make your money work hard for you by
earning higher returns than the traditional
savings and certificate of deposits.                                                PAGE 46 • 2012                                     
                                          The Way to Unlocking Your Financial Freedom
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                                        IE S   :
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             F E AT U                ianapolis
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   Dallas, , Rochester, H , Sacramento
           is                   le
    Memph leveland, Seatt nta, Charlotte
          o,  C               Atl a
   Chicag           sas City,
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