Eastern Mass Extra
Volume 2 Issue VI
Dave Lindahl Presents Apt. House Riches June 2009
A Genuine THANK YOU to each
of you referring Eastern Mass Thursday June 11th 2009
REIA to your Friends and associ-
ates. We Truly Appreciate it.
-Your Eastern Mass REIA Team David Lindahl has been a
Real Estate investor for the
The PROPERTIES and SER-
VICES advertised through Eastern
past 14 years. He currently
Mass REIA are NOT RE- owns over 7,020 units
VIEWED or VERIFIED by East- around the US. He’s the
ern Mass REIA, staff or volunteers. author of 2 #1 bestselling
books, Emerging Real Es-
tate Markets, and Multi-
Family Millions. His third
book is through Donald
Trump’s organization, and
Inside this issue: is called Commercial Real
Estate Investing 101: How
Eastern Mass REIA is 2 Small Investors Can Get
“ON THE MONEY” Started and Make It Big.
Annual Networking Boat 2 Among other publications
Cruise room apartment Dave Lin- that allowed him to create
David has been featured in
Reader’s Digest, Creative dahl started buying and enough monthly positive
A Home is not an Island 3
Real Estate Lifestyles, selling multi-unit properties cash flow to retire with in 3
AOL and Kiplinger Maga- in Brockton, MA to create a ½ years.
Eastern Mass REIA 3 zine. better life for himself.
Presents Log onto
With no Real Estate experi- www.EasternMassREIA.co
Queallys Corner 4 Starting as dead broke land-
ence he created systems m for more information.
scaper living in a 1 bed-
Investor Report: 5
First Time Home Buyers
Rent to Own your Home: 6-7 Eastern Mass REIA teams up with Brockton
Pro’s and Cons
6 Questions to ask your 8
21st Century and Building a Better Brockton
Eastern Mass REIA is position, image and per- nomic development.
Upcoming Events and 9 proud to introduce De- ception of Brockton as a
Classifieds velop Brockton. desirable place to live For more information or if
and work by encourag- you are interested in being
Market Conditions 10
Develop Brockton is a ing financial invest- a part of the Develop
conduit for Brockton ment, business develop- Brockton team, log on to
21st century. Our Mis- ment, job creation and www.DevelopBrockton.com
sion is to enhance the retention through eco-
PAGE 2 E AST E R N M ASS E XT R A V O LU M E 2 ISSU E V I
Eastern Mass REIA is “On The Money”
Eastern Mass REIA is hitting the airwaves with their own show “On The Money” every Tuesday night at 6:00
pm Eastern Standard time. The Show will be broadcasted locally on Massachusetts stations WBNW 1120 am,
WPLM 1390 am, and WESO 970 am in Boston and it will also be streaming live over the internet. Shoot an
email to firstname.lastname@example.org for more information.
This Weekly show will be hosted by Director of Operations John Ingram and he will have co-hosts and guest
speakers each week. “On The Money with Eastern Mass REIA” is guaranteed to be informational and excited
to all of the listeners.
Tune in and listen starting June 9th at 6:00 PM
Contact Bob Smith
Eastern Mass REIA’s Annual Networking Cruise
EVERYONE IS WELCOMED!! Also, there is a VIP Grand Slam All REIA Members $25
Package with a few seats left. The Non Easter Mass REIA Members
Only 200 seats are available for this Grand Slam Package includes Red email email@example.com
event extravaganza!!! Don’t miss Sox vs. Tigers Tickets at Fenway to receive your discounted price!
this opportunity to build your list, Park and then dinner at TIA’s on
as members from REIA’s all over Long Wharf in Boston. There are Guests $40
New England will join us on a 3 only 3 tickets left so don’t miss you
hour Boat Cruise in Boston Harbor day at the park. Grand Slam Package $175
on Thursday August 13th. Board-
ing at 6:30pm and docking at Log onto www.eastermassreia.com Email firstname.lastname@example.org for
10:00pm. or click here to reserve you tickets more information about the Net-
today. working Cruise
There will be Live Entertainment,
Refreshments, snacks and Adult
This cruise will be benefitting the
“Ted Williams League” Youth
This will be the August monthly
meeting for Eastern Mass REIA.
V O LU M E 2 ISSU E V I E AST E R N M ASS E XT R A PAGE 3
A Home is Not an Island
The surrounding neighborhood is just you’re considering to engage in your don’t necessarily diminish value, but
as important because it can have a big most common activities. they can indicate transient popula-
impact on your lifestyle -- safety, tions. Check for vacant or blighted
available amenities, and convenience • Check out the school district. The businesses or homes.
all play their part, according to the education department in your town can
National Association of Realtors provide information on test scores, • Consider resale value. A local real
(NAR). class size, percentage of students who estate agent or trade association can
attend college, and special enrichment give you information about price
NAR also says you can keep your programs. Even if you don’t have chil- trends, inventories, selling times and
home value buoyed if you find the dren, a house in a good school district other information that can indicate
right neighborhood. will be easier to sell in the future. how well your home's value will hold
And you can find the right neighbor- • Check crime. Ask the police depart-
hood by getting information direct ment for neighborhood crime statistics • Hit the streets. Narrow your focus
from the best sources -- rather than -- not only the level of crime, but also to several neighborhoods and do a
from second hand and often incom- the type -- burglaries, armed robberies "walk-through" of each. Pick a warm
plete data bases professing to offer -- any trends of increasing or decreas- day when people are out and available
you one stop shopping for all your ing crime and the location of crime. for chatting. Look for tidy, well main-
neighborhood checking needs. tained homes, quiet streets and other
• Look for economic stability. Your indicators of neighborhood stability.
• Make a list of the activities -- mov- local city or county economic develop-
ies, health clubs, churches -- you en- ment office can tell you if income and Log onto www.easternmassreia.com
gage in regularly and stores you visit property values in a neighborhood are for more valuable information and
frequently. See how far you would stable, rising or falling, the percentage products.
have to travel from each neighborhood of homes to apartments. Apartments
data under the following
High Value, Fast, Accu-
rate, Superior Search
Functions, Robust Export
Features, Intuitive Opera-
tion and Friendly Sub-
ForeclosuresABC is a Website founded by local
long term creative investor Neil Kaplan
Eastern Mass REIA Presents
REO Boot Camp July 25th & 26th
Join us as we take to the road and Day 1: Our students will have the unique Day 2: On Day 2 we will review our day
enter, analyze and assess a variety of opportunity for first hand instruction on in the field and be joined by entity and
bank-owned properties. This two day what to look for while conducting their tax guru Albert Aiello. This is an unbe-
event will feature state licensed home own diligence. Brian is federally licensed lievable opportunity to learn from and Q
inspector Brian McDonough Special in mold assessment and remediation, car- & A with one of the most brilliant
Guest Albert Aiello who will accom- ries state certification for pest and wood- strategist in our industry. We will be
pany us through these properties. boring insects, title V (septic) compliance, going over: Diligence, Deal Structures,
Learn how to find the local players in is a past member of the Bockton Depart- Purchase and Sales, Corporate adden-
the REO world and how to establish ment of Health and is a Massachusetts dum, Title Issues, how to control the
those relationships that will yield for General Contractor. We will prepare a cost property until your ready to close, and
years to come. Everyone has a few to to repair estimate in order to properly so much more. As a special added bo-
offer, who's holding the big num- structure and justify offers to the banks. nus, Albert Aiello who will be attending
bers??? Who knows, maybe you’ll find one that the camp, has agreed to teach the entity
makes sense to you. structure and tax savings portion of the
PAGE 4 E AST E R N M ASS E XT R A V O LU M E 2 ISSU E V I
I WILL ACT NOW. I WILL ACT NOW. I WILL ACT NOW." Og Mandino. The markets
took those words to heart last week, with plenty of timely action ranging from telling economic
reports to interesting announcements from the government, related to homebuyers.
On the economic news front, the headlines
were mixed. On the disappointing side was a
worse than expected Retail Sales Report, which
showed that consumers are continuing to
tighten their purse strings. Not entirely surprising, but it did mark the eighth decline in the
past ten months for Retail Sales. Initial Unemployment Claims were also reported worse than
expected - which some said were due to massive Chrysler layoffs - but still was disappointing
after there had been some recent signs of improvement in the labor markets.
However, there was positive economic news as well, including improved readings from the
manufacturing sector, as the New York Empire State Manufacturing Index improved for the
third month straight. Consumer Sentiment was also better than the previous reading and the
best since September of last year. So although the consumer isn't out spending money with
abandon just yet, this report shows that most folks are indeed starting to feel better about the
economic outlook, likely due in part to the values of their investment accounts improving as
Stock values move higher.
Looking at the always-important inflation headlines, wholesale inflation levels moved higher
in April, driven by an increase in food prices. On the consumer inflation side, the Consumer
Price Index (CPI) report was flat, although the Core CPI - which removes food and energy
prices - was a little hotter than expected, largely due to a huge spike in tobacco prices by a
smoking 9.3%! Core inflation has been moving slightly higher since February.
About Patrick... In 1994 Patrick started his career in the Mortgage Industry as a Loan Proc-
essor. Through his hard work and dedication to continuing education within the industry he
quickly moved up to become an Underwriter and eventually became Vice President of Residen-
tial & Commercial Mortgage Lending for a local Community bank. Later, Patrick also became a
Regional Sales Manager, responsible for training and managing a team of Loan Officers. A con-
summate mortgage professional, Patrick is a Certified Mortgage Planning Specialist and an
expert in all areas of Residential and Commercial Real Estate financing.
V O LU M E 2 ISSU E V I E AST E R N M ASS E XT R A PAGE 5
Investor Report: First Time Home Buyers
Some real estate investors assume that the federal first-time home buyer tax credit has little relevance for
them. After all, they already own their own houses, and the $8,000 credit was designed for people who are ei-
ther buying their very first home -- or they haven't owned one in three years. But investors should be aware of
a couple of recent wrinkles in the tax credit rules that they can put to good use themselves.
Number one: The IRS has interpreted the law to allow unmarried co-purchasers, including investors -- to buy
one-to-four unit properties with the credit flowing to a co-purchaser who qualifies for the credit, and will live in
one unit, while the other units are rented out.
Number two: The credit itself has just become more attractive for buyers using FHA financing. The Federal
Housing Administration has issued new guidance to lenders allowing them to "monetize" the credit and ad-
vance cash to first-time purchasers for closing fees and other expenses, including interest rate buydowns.
That, in turn, will allow investors selling houses to directly target first-time buyers who might not have enough
money on hand to qualify under regular underwriting standards.
Here's what you need to know about both these opportunities: Gibran Nicholas, chairman of the CMPS Insti-
tute -- a training organization for mortgage and financial professionals -- says IRS's guidance on the tax credit
allows creative allocations of the credit among co-purchasers of investment property.
The key requirement is that least one co-purchaser qualifies for the credit as a first-time buyer and will live in
a unit for at least three years.
For example, say a group of unmarried investors buys a triplex or quadruplex with the intention of renting out
two or three units. The credit "can be claimed by one or more of the investors," according to Gibran, as long as
they occupy one or more units as their principal homes.
Now to the new "monetization" feature: As of June 1, FHA lenders can loan first-time buyers up to $8,000 on a
short-term basis for use on closing and some downpayment costs.
When buyers get their tax credit checks from the IRS, they pay back the lender. FHA buyers will still need to
make downpayments of at least three and a half percent of the purchase price of the house from their own re-
sources or gifts from relatives.
But they can use the cash advances from lenders on closing costs, mortgage insurance premiums and to buy
down their interest rates .
PAGE 6 E AST E R N M ASS E XT R A V O LU M E 2 ISSU E V I
Rent to Own Your Home: Pro’s and Cons
With buyers scarce and financing tight, some home sellers are offering rent-to-buy options to potential buyers. In fact,
there's been enough of a spike in interest that ForSaleByOwner.com added it as a search option on the site, says
spokesman Eric Mangan.
These deals, also called rent-to-own and lease-option, usually require buyers to pay extra rents each month plus up-
front fees of about 5% of the purchase price. The regular rent then goes in owner's pocket (presumably to pay the mort-
gage), but the additional payments are used to buy down the price of the home.
"Lease option agreements, if properly drafted, by and large are an effective way of enabling people to buy who are hav-
ing trouble arranging financing or coming up with down payments," said Lawrence Jacobson, a real estate attorney in
Because the contract is typically written to close in 12 to 36 months, it gives buyers the chance to experience homes
and neighborhoods without having to make major commitments.
But the biggest reasons buyers opt for rent-to-buy deals are to build up down payments and to improve their credit pro-
files so obtaining a mortgage is easier.
For example, if they buy a $200,000 home, paying $5,000 up-front and a rent premium of $400 a month on top of their
$1,000 market rent, they'll have $9,800 saved after one year and $19,400 after three.
In New York City, condo conversions are increasingly offering the option after having units sit empty. For example, the
developers of a former commercial building on Wall Street are offering to apply 100% of "buyers" rents toward the pur-
chase prices. And there are no up-front fees.
It's a luxury building with prices starting at $630,000 for a studio to $8.4 million for a four-bed penthouse. Sales were
slow because buyers were having difficulties arranging financing, according to sales director Larry Kruysman.
"What we were finding from customers was that banks were making it more difficult to purchase," he said. The lenders
were asking borrowers to put up 30% of the purchase price to obtain a mortgage rather than the traditional 20%.
But most rent-to-buy offers are from individual sellers, often people who have purchased new homes, can't sell their old
ones and need to offset some of their mortgage costs.
Renee Haworth, a Louisiana homemaker, tried to sell a house in Mandeville, La., for many months without success.
"We had two or three buyers ask us if we would do a lease option," she said. "We hadn't thought about it before that."
She consulted an attorney and made a deal this past March. It calls for a sale price of $217,000 for the four-bedroom
two-and-a-half bath house. The buyer put $3,000 down and pays $1,400 a month, $400 of which accumulates toward
the sale price.
The renters agreed to exercise their option after 12 months. Under terms on their contract, if they decide to walk
away, they lose both the $3,000 deposit and the $400 per month they pay over normal market rents.
1794 Bridge Street, Suite 13B | Dracut, MA 01826
Phone: (978) 957-9665 | Fax: (978) 957-9661 | Email:
V O LU M E 2 ISSU E V I E AST E R N M ASS E XT R A PAGE 7
Rent to Own your Home Continued
But there are drawbacks to these deals. You need a good contract and a healthy sense of "buyer be-
Losing your investment: For one, there's little protection for buyers who fall behind in payments. If you
fall behind and are evicted, you lose any up-front fees and rent premiums you paid.
Can't get a loan: If you still can't arrange financing at the end of the rental period, you may have to forfeit
all the extra cash you've invested. The terms for that scenario would need to be spelled out in the contract.
In buyers' markets, you may have the leverage to get a contingency clause specifying any up-front fees and
extra rent be returned if you don't qualify for a loan.
Falling home prices: Buyers may be hesitant to lock into a set price a year in advance considering how
much home values are plunging. If the comparables are significantly more attractive when it's time for your
deal to close, you can sometimes renegotiate, but that's at the seller's discretion. If renegotiating is impossi-
ble, then you have to decide whether it's cheaper to walk away or go through with the deal.
Foreclosure scams: Some renters have been burned by doing lease-option deals with owners who are go-
ing through foreclosures. After months of taking the inflated rent payments even though they are in foreclo-
sure, the owners finally have the home repossessed by the bank and the renters are served with eviction
notices and are out their investments.
There have also been instances of foreclosure-prevention scams in which fraudsters take title to homes and
do lease-option deals with unsuspecting renters. Instead of applying the initial deposit and the extra rent
money to the down payments, the scam artists simply pocket everything and disappear. Because the rent-
ers don't get a title to the property until they close the bank loan, they are again out their investments.
Walk aways: Pitfalls exist for sellers as well. Renters may decide to not exercise their options if prices fall.
That can leave sellers with large paper losses by the end of the lease compared with if they had sold the
home when they originally planned. They are also stuck carrying the costs of the home until they find other
buyers or tenants.
Most importantly, however, buyers must be cautious about entering into a deal that's unaffordable. The
payment can seem manageable when you're just looking at the monthly "rent" payment. But there are more
expenses than that.
First, the mortgage payment on a $200,000 home after paying $20,000 down, comes to more than $1,000 a
month at the current very low interest rates, which are only available to borrowers with the best credit.
Over the past few weeks, rates have been creeping up again, so there's no guarantee they will be as low
when the purchase is completed. Plus, credit-damaged buyers can expect to pay one or two percentage
points higher at a minimum. That could add another $250 or more to the monthly bill.
Then add in private mortgage insurance, property taxes, all the utility and routine maintenance costs, and
it could push the monthly payment past $2,000 - and affordability.
PAGE 8 E AST E R N M ASS E XT R A V O LU M E 2 ISSU E V I
6 Questions to ask a prospective CPA
By: Albert Aiello the mass production guys that just your tax situation. There are over
"pump out" thousands of returns. 30 Goldmine audit-proofing
6 questions to ask a prospective You do not want to be a minuscule techniques. If the prospective
CPA and quickly weed out the los- part of a "paper mill". CPA does not know about any,
ers!!! Q3. Will you help me plan my move on.
taxes to ensure the best possible
Q1. How much is 2 + 2? If they outcome under different scenar- Q6. Can you provide refer-
say "4", don't hire them. However ios? You do not just want a "bean ences from real estate investor
if they say, "What would you like it counter" or "glorified bookkeeper" clients as to your quality of ser-
to be!"...Then this may be the one to simply put numbers on a form. vice? When you are checking
to hire. I am not in any way advo- You want someone not only to pre- with the reference ask specifi-
cating anything illegal. I am sim- pare your return, but also to plan it. cally, why they like the tax advi-
ply using humor to get this point Expect to pay more for this. How- sor. For example, Did they come
access - You do not want someone ever, the additional investment could up with tax-saving ideas that
who is overly conservative. A con- save you significantly. others did not think of? Were
servative tax advisor is like a slow they very thorough by explaining
race horse -- worthless! On the your tax situation? Did they call
Q4. I own rental properties. Do
other hand, you do not want the you during the year to make tax-
you have any ideas on how to in-
tax advisor to be reckless, blunder- reduction suggestions?”Would
crease my property deductions? Of
ing, and imprudent. Remember the you recommend them to your
course the best answer is the compo-
overall objective is to both maxi- mother?” If you do not get good
nentizing depreciation system (or
mize tax savings and minimize answers, move on.
cost-segregation analysis). If they
IRS problems. So the real Q is -
don’t say it, or at least suggest some-
Do you maximize tax savings yet This Article was presented to
thing good, move on.
minimize IRS problems? you by Al Aiello. For more in-
formation on Al Aiello and his
Q5. What steps do you take to re-
Q2. Are you PRO-real estate? products, you can log onto
duce the chances of my return be- www.easternmassreia.com
They should be! How many real
ing audited? This is an excellent test
estate investors do you have as
of their knowledge and willingness
clients? The more the better, al-
to be diligent and concerned about
though not too many. Beware of
McDonough's Home Inspections.
Home Inspections, Title V & Federal Certified for Mold and
Mildew Residential and Commercial 508-878-8203 Email: skur-
V O LU M E 2 ISSU E V I E AST E R N M ASS E XT R A PAGE 9
June 9 June 11 July 25th and 26th
“On the Money” Radio Debut Eastern Mass Monthly Meeting REO Boot Camp
Subject: Radio Kickoff Show Subject: Dave Lindahl Hit the road with REO specialist
Join Eastern Mass REIA’s New Ra- Don’t miss Dave’s Apartment
dio Kickoff Show Tuesday Night at House Riches Where: Holiday Inn 929 Hingham
6:00 pm Street Rockland MA
Where: Holiday Inn 929 Hingham
Stations: Street Rockland MA Time: Check In at 8:00am - 5:00
Saturday and Sunday
1120am Time: Networking begins 6:00pm
930am Meeting 6:30pm
Eastern Mass Classifieds
Wainwright Estates Lease Option Avail. Lease Option Avail. Rent to Own, 2 fam. Rent to Own
www.wainwrightestate. Shore Drive Dorchester Street 37-39 Glendale St. 10 George St.
com Kingston MA Attleboro MA 4/5 beds each unit Cedarville, MA
1661 Canton Avenue 3 Bd. 1 Bath 3 bd. 1 Bath SFR Brockton, MA Joe Roche
Milton Mass John Fossetti Khalil Farhat Steve Whalen 781-789-7308
Jim Rich 781-603-5906 508-428-0338
6 Unit blocks from Multi Investment Are you an accredited 4 Family 3/3/2/1 Advertise your
Clark University with a Boston 18 Units fully Investor??? If so ask
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617-688-5522 Email us at: you can email your
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Contact Debbie Jean: John Ingram
Advertise your Business here
and get into the Network
E A S T E R N M A S S A CH U S ET T S R EA L ES T A T E
I N V ES T OR S A S S OC I A T I O N
Box 430 Eastern Massachusetts Real Estate Investors
Pembroke MA 02359
Association (EasternMassREIA) provides
www.EasternMassREIA.com a relaxed, casual networking and educational
venue for the new and seasoned investors
alike. Our Association meets on the second
Thursday of each month and we welcome all
to participate in the exciting fast paced world
of Real Estate Investing. Along with our
monthly meetings we sponsor educational
field trips, seminars and mentoring programs
for investors of all levels. We are the #1 Re-
source in the Greater Boston and South Shore
areas to network and get deals done.
Empowering your Future Please join us at our next meeting.
We’re on the web
Rockland Holiday Inn, 929 Hingham St.
Hot Markets In The News A look into the Future
Built on a new generation of hope The National Association of Realtors Commercial real estate is ailing,
delivered by the Obama administra- Pending Home Sales Index shows worsened by the recent economic
tion, the Hottest Buyers Markets for that home sales are up for the 3rd downturn. Significant job losses have
2009 represent communities that pos- month in a row. reduced the demand for commercial
sess the highest probability of success space, while a lack of credit has
for home buyers to make a profit. The Lawrence Yun, NAR chief economist, stalled transactions and refinancing
gains are unlikely to come in 2009, said buyers are responding to very activity. It is critical for the Federal
but these markets may be considered favorable market conditions. "Housing Reserve to increase liquidity by pur-
the best of the worst in what has now affordability conditions have been at chasing commercial mortgage-backed
clearly materialized as the worst historic highs, but now the $8,000 securities. Because commercial real
economy since the Great Depression first-time buyer tax credit is begin- estate always lags an overall eco-
as forecast by Housing Predictor. ning to impact the market," he said. nomic recovery, it will take some time
"Since first-time buyers must finalize for the commercial real estate market
The Hottest Markets in 2009 repre- their purchase by November 30 to get to rebound.
sent areas of the country where there the credit, we expect greater activity
is stronger employment, prospects of in the months ahead, and that should Overall, commercial vacancy rates are
growth and promises of prosperity. spark more sales by repeat buyers." rising and rents are softening.
They represent exceptions in a cas-
cade of deflationary housing markets The Pending Home Sales Index, a With consumers reluctant to spend
that are projected to appreciate, de- forward-looking indicator based on much in the current economy, the
spite an economy that has years to contracts signed in April, rose 6.7 retail vacancy rate will probably rise
fully turn around. percent to 90.3 from a reading of 84.6 to 12.1 percent this year and 15.8 per-
in March, and is 3.2 percent above cent in 2010 from 9.7 percent in 2008.
1. McAllen, Texas April 2008 when it was 87.5. Average retail rent is expected to fall
2.1 percent in 2009 and 1.5 percent
2. Casper, Wyoming "The market has already bottomed in next year; it declined 2.0 percent in
some areas, but this is an unusual 2008. Net absorption of retail space in
housing cycle with some areas im- 53 tracked markets will likely be a
3. Biloxi, Mississippi
proving rapidly while others languish negative 38.6 million square feet this
or decline," Yun said. year and a negative 44.2 million in