1.Realty411 Realty411 Print Online Network www.realty411guide.com | Vol. 3 No. 2 2010 A Resource Guide for Investors Tips for Long-Distance LANDLORDING Turn-Key RentalsAround the NationCash Flow from theComfort of HomeMathew Owens, CPA, owner ofOCG PROPERTIESBuys & RehabsRentals in Tennesseefrom Redondo BeachGet the Deals DONELearn Creative RealEstate Techniquesfrom Dave Lindahl, Dolf de Roos,Bruce Norris, Bill Gatten & more!Look InsideFREE Celebrating the Largest Wealth Issue with More Pages &Reports!Opportunities than Ever!photo by Sam Green

2. > 7 Secrets from the Master! Charity Walk and Gala Dave Lindahl shares his latest 37 Join the Ultimate Bus Tour tips for Investing Success with MemphisInvest.com 9 No Drama in Dayton 39 Creative Financing Options Triple Net Houses Helpswith MMG Capital, LLC Investors Profit without Issues40 Philbin Capital Discovers 11 California Living withDeals in the Golden State Tennessee Cash Flow42 The Key to Success by Club Mathew Owens, CPA, owner ofFounder Sam Sadat OCG Properties, explains why he loves to invest out of state 14 Beware of the Investment Vampires by RBS Homes 16 Dolf & Carter: A Master- mind with Arizona Investors 19 Enjoy a Tropical Paradise with Phenomenal Returns photo: Sam Green45 Buy Bigger and Better Dealsby Kathy Fettke46 Alternative EconomicsClub Debuts in California51 Stop the Gambling!Mike Woo, a Rich Dad, Poor In search of their latest gem in Dad protg, advises clients Nicaragua, Maverick Investor 52 Is Your Mortgage Underwa- Group traveled the world ter? Perhaps a Short Pay Refi- 22 Investor Nation Shares theirnance is the Answer Blue-Chip Real Estate Strategy 55 Pay Off Your Rental House 2 5 G i n g e r M a c i a s T h r e e in Five Years with the Short FREE Ways to find a GreatTerm Retirement Program Wholesale Deal 27 Creative Real Es- tate Techniques with Educator Bill Gatten 28 Matt Maloufs 10 Weeks to Massive, Passive Cash Flow 30 A Visit with Sensei at his 12 Rounds Club 35 Bruce Norris discusses the57 Whos On Your Team? I Survived Real Estate 2010Insights by 360 Investments 3. Platinum PartnersA Powerhouse Lineup of Top Industry Experts Presents the Insiders Edge on The State of REO 2010The Norris Groups award-winning event returns September 17, 2010 to the Nixon Library in YorbaLinda, California. Were assembling an incredible line up of accomplished industry specialists todiscuss the state of the REO market, on-going industry regulations, and the opportunities emergingfor real estate professionals. New guidelines a ect every sector of our industry. In a climate ripe for both miscalculation andpro table advances, how are our colleagues and partners navigating an industry in continuedtransition? Our Whos Who Round Table Includes:Bruce NorrisJoseph Magdziarz Tommy WilliamsChristopher ThornbergPresidentVice President2008 President PrincipalThe Norris Group Appraisal InstituteNational Auctioneers Beacon Economics AssociationSean OTooleSarah LettsDaniel Phelan Peter WaymanPresidentDirector, Credit Loss Mgmt Mortgage Bankers Sr. REO DirectorForeclosure Radar Fannie MaeAssociationFreddie MacMVT PRODUCTIONSLast year, I Survived Real Estate 2009 focused on the dramatic shifts in regulation facing our industry. This year, our panel separates fact from ction as we delve into the health and sustainability of the current real estate market and the opportunities that lie ahead for hungry real estate professionals.To nd out how you can participate as an individual or potential sponsor, see the back of this yer or visit ISurvived2010. com for more information. Seating to this formal dinner event is limited, so go to the website or call our o ce today. Thanks you to all our Platinum and Gold Sponsors and friends for making this unique event a possibility.www.ISurvived2010.com or 951-780-5856 4. Gold Sponsors Benton Group Investors Association (NSDREI) Delmae PropertiesPersonal Real Estate Investor Elite Auctions Magazine EntrustMike Cantu Inland Empire Investors ForumRealty 411 Magazine Keystone CPA Rick & LeeAnne Rossiter Las Brisas EscrowStarz Photography Leivas Financial ServicesTony Alvarez theREOmentor.com North San Diego Real EstateWestin South Coast PlazaWinner of seven communication, outreach, and fundraising awards.SPONSORSHIP OPPORTUNITIES We cant do this without your help! Businesses or individuals who are interested in participating have two options: 1. SPONSOR the I Survived Real Estate Komen Breast Cancer Walking Team in exchange for a seat (or table) at the event2. JOIN the I Survived Real Estate Komen Walking Team and raise money in your network for the walk in Newport Beach September 26th. Every $200 gets you one seat to the event (while seats remain).All donations are made directly to our Susan G. Komen Breast Cancer Walk Team so 100% of the proceeds go to the Orange County A liate of Susan G. Komen for the Cure.This formal dinner event includes visitation to the Nixon Museum, appetizers, 3 course meal, and the live event. Additional bene ts are listed below for those that become platinum and gold sponsors (Please note all funds must be in place July 10th for gold and platinum sponsors to take advantage of initial radio spots). Single Gold PlatinumCost$200$2,000$5,000+Tables (Seats) Received (1) Seat 1 (10)2 (20)Advertising Logo on Event Websitefeatured SEO-Optimized Pro le Logo on Flyers Name only Digital Signage at Event featured Preferred Seatingfeatured Event Program Ad1/3 page 1/2 page Radio Show Mention (Intro - 15 total*) Radio Show Mention (Outtro - 15 total*) Event Video (Intro - Single Page) Event Video (Outtro) Press Release Mention Event Bag Marketing Oppotunity Call Diana Barlet at 951-780-5856 or visit ISurvived2010.com for more information and preferred seating.Note: All donations must be made through the I Survived Real Estate 2010 walk team to be eligiblefor advertising. July 10th is the deadline for all money to be in place to ensure radio spots include theselected sponsor. There may be more than 15 radio shows that are aired for the run of event. 5. Dont You have better thingsto do than deal with tenantsand toilets?Yes, we know you do.This is why the Herrera Sindell Groupdeveloped a turn-key program, whichprovides investors HIGH RETURNS,without any management headaches.With nearly 20 property acquisitions The Herrera Sindell Group Offers:per month, The Herrera Sindell Groupoffers a prime opportunity for busy Cash-Flow Investmentprofessionals to prosper in this market.Properties in Southern California Strong Cash-on-Cash ReturnsIs this opportunity right for you?with Long-Term HoldsVisit our ofce and see why so many Excellent Return-on-Investment investors are enjoying unbeatable(ROI) within 30 to 90 daysreturns and safety, all while buying theproperties of their choice, in local Options to Utilize Retirementmarkets and at deep discounts.Plans for Investment Properties Tenant-Occupied Properties inAs featured inMake an appointment to secure yourRealty411 Magazinenancial future with real estate today!Our Local MarketThe Herrera Sindell Group, Inc. Property Management In Place,15060 Ventura Blvd., Ste. 100No Need to WorrySherman Oaks, CA 91403www.herrerasindell.com Toll Free (877) 949-2772 Disclaimer: This is not a public offering nor is it a REIT or hedge fund. This is not an offer or invitation to sell or a solicitation of any offer to purchase securities in the United States or any other jurisdiction.Any securities may only be offered or sold, directly or indirectly, in the state or states in which they have been registered or may be offered under an appropriate exemption. 6. published for Investors by Investors Aby Dave Lindahl Realty411 s a successful real estate inves-tor and top-selling author, Im&Wealth Real Estateon the road a lot presentingworkshops across the county. I often start with a bit of personal history because when youre a multimillionaire like I am, people assume you were either FOUNDER & EDITOR Linda Pliagas born rich or had a wealthy mentor showinfo@realty411guide.comyou the inside track to making money. EDITORIAL STAFFThats not my story. Not by a long shot.Lori Peebles Fifteen years ago, I was running my ownMatt Maloufsmall landscaping business in New Eng- Carla FischerGinger Macias land. I was a guy with a pickup truck andCOPY EDITORlawn mower. If you havent experienced a Lorie L. West New England winter, let me simply say itPHOTOGRAPHERS Who Else Wants Up toSam GreenJohn DeCindisCOLUMNISTS $5,000$10,000 or More Dave Lindahl Charles SalisburyADVERTISINGExtra Monthly Cash Flow?Kelly Global Marketingjdk77725@yahoo.com 310.439.1145 EVENTS & EXPOS Lawrence Ruanomeans I was literally frozen out of work for What You Need to Succeedruanoinvestments@gmail a good part of the year.First and foremost, to succeed as a real 805.791.5457 I spent winters doing odd jobs to scrape estate investor you must be motivated. ThisPRODUCTION Lori and Mike Hampton by. A friend asked if I wanted to repair a business isnt for the undecided. You have Emma Krull - The Dab Hand property that needed some TLC so it couldto want it bad enough to take action. Be- CALIFORNIA DISTRIBUTION be resold fast.cause where theres a strong will, theresProfessional Distribution SolutionsThe owner was looking for a quick fixwealth.1.877.418.6500 and flip, and thus I was indoctrinated in the I was 100% determined to own real es-NATIONAL DISTRIBUTION KJ Banks: 805.377.6328business of flipping properties before it be-tate. I didnt let the fact that I had a less PUBLISHED BYcame a national pastime and the subject of than $800 in the bank stop me from buying Manifest Media Partners cable TV shows. But what attracted me to my first property, a three-unit building in Nikolaos K. Pliagas - Chairmanreal estate was not the quick turn. It was the my hometown. Our Mission is to Educate & Inspire steady cash flow. Sure, I was nervous doing that first deal. INFO/FAX: 310.499.9545 Realty411Guide.com | reWEALTHmag.comThe idea of checks from renters fillingI had no direct experience. No track record. Main email: realty411guide@msn.commy mailbox month after month, regardless No personal wealth to use for collateral. Realty411 and Real Estate Wealth magazines are published in Los of the weather, really appealed to me. But I didnt let any of that stop me. Angeles by Manifest Media Partners (mailing address: 4221 Neo- sho Ave., Los Angeles, CA 90066). Publishers are not responsibleI wanted other people to pay my mort- This is why I tell beginners everywhere for unsolicited manuscripts, photographs and/or other materials.gages, creating huge equity in my build- that they can own real estate right now. Copyright 2010. All Rights Reserved. Reproduction without per- mission is strictly prohibited. The opinions expressed by writers ings. I wanted to sit back and watch myI dont care if youre broke like I was. If are not endorsed by the publishers and/or editorial staff. Before buildings appreciate, making me wealthieryoure motivated to succeed, real estate investing in real estate, seek the advisement of a trusted nancial adviser, attorney or tax consultant. Please invest responsibly. and wealthier. and all the personal wealth it can generate PRINTED IN THE USA. GOD BLESS AMERICA I wanted to live off the positive cash flow can be yours once you know how to findConnect to our network @ that I received each month, so I wouldntproperties and structure the deal. have to go to a job every day. No more dai- ly grind. No more living paycheck to pay-How I Found My First Building check. Best of all, I liked that millionaire I bought books and tapes on real estate, was the likely outcome if I did it right.even though I didnt find much on apart- Back then there was nobody teachingments. I went to local investment clubs, how to buy rental properties. The gurus fo-networked with experienced investors, and cused on single family houses, just as theystarted bird-dogging for them (finding do today. So I had a big learning curve. Continued on pg. 60Realty411Guide.comPAGE 7 2010reWEALTHmag.com 7. invest without drama Do you have reservations about becoming a landlord? Triple Net Houses created a program to help investors prot from rental properties without ever having to deal with tenants! I by Carla Fischern 1903 The Wright(www.triplenethouses.Brothers made historycom) takes all the un-in Dayton, Ohio, withknowns off the table.their first power airplane By purchasing a Triple there. When we rehab a property we prettyflight.Net rental, investors will much do everything so we know its going One hundred fourknow exactly what theirto be a maintenance-free property. When years later, Peter Julian, CEO of cash flow is going to be we finish, its almost like a new house. Triple Net Houses, reflects onfor the next ten years.The companys record is impressive. In their short three-year revolution-Julian explains: When the year 2009, we collected 97.4 percent of ary history that began in 2007 asPeter Julian we lease the house its aour scheduled rent, Julian proudly states. a premiere provider of real estate manage-triple net lease, which means we pay taxes,It even amazes me! ment. Weve reinvented the way peopleinsurance and maintenance. Basically weIn Dayton, market rents range from $595 invest in residential rental real estate, Ju-pay all the operating expenses, so theres to $950. The company rents with a one lian says proudly. He then adds: Its kindanothing our clients have to pay. We man- year lease agreement. A typical scenarioIf an investor buys a Triple Net House, they know exactly what their cash ow is going to be for the next 10 years. They never have to dealwith tenants and never have to deal with or pay for maintenance. overcast. Were going to get some rain laterage the property so theres no management. is this: A tenant occupies a three bedroom, on, which doesnt mean a thing for our in-Investors will never have to deal with a ten-one bath home, 1,100 square feet, with a vestors who are from all over the country.ant and never have to deal with or pay for one car garage, for $700 a month. Many The weather rarely has anything to do withmaintenance, Julian explains. homes are brick with full basements, some our business, unlike the Wright Brothers. The company offers a 10-year NNNare ranch houses built in the late 50s.Julian shifts to business quickly explain- (triple net) lease. If investors want to ter- Dayton is home to the largest single ing how he created a NNN (triple net) in- minate early, all they have to do is provide site employer in the state of Ohio: Wright vesting model, which is traditionally onlya 60-day written notice. There is no penalty Patterson Air Force Base with 26,000 em- found in commercial real estate transac-and the investor still owns the property.ployees. The city also has two universities: tions. Its a turn-key investment. It pays aWright State University with an enroll-Ive been a real estate broker for a little high yield and were able to buy houses at ment of about 18,000, including a medical over 30 years. Ive worked with investors low cost and rehab them economically. We school. Next is the University of Dayton, my entire career. When I talk to them, most then pass that deal on to an investor, as awhich enrolls over 10,000 students and like all the good things about real estate, totally turn-key investment. Their total in- also offers a law school program. like the cash flow, the tax write-offs, build-volvement after the investment is to collectAs far as the financials, a Triple Net in- ing-up equity, and potential appreciation.a payment from us each month, which is vestor can realize up to 17% return on each But when potential investors get to talking electronically deposited into their checking house. about managing, theyve all heard the hor-account. Its a perfect storm. If the investor pays cash then they ror stories about tenants, maintenance and When asked how Triple Net Houses canwill receive 9.1%. Julian explains fur- all those kinds of things. provide guaranteed returns for investors,ther: For example, if they have a $60,000So Julian and his team came up withregardless of what is going on with theirhouse the investor will be receiving $5,460 a unique solution. Its basic and simple, property, Julian replies: Were very care-a year, which is 9.1% of the purchase price. even though it tackles a complicated con- ful in selecting properties in neighborhoods Continued on pg. 47 cept. The Triple Net Houses program where we know the rents are going to beRealty411Guide.com PAGE 9 2010 reWEALTHmag.com 8. CaliforniaInvestors Specializing inthe Memphis Market! 9. California LifeTennessee Rentals by Ginger Macias | photography by Sam Green Last year, while working as a pan-Ginger: What did you do before youelist at a local real estate invest- became a full-time real estate investor?ment club in Los Angeles, I hadWhat is your background?the pleasure of meeting Mathew Mathew: Lets see, I grew up in the tiny Owens, a certified public accountant andtown of Los Angeles and graduated from owner of OCG Properties. I was so im- the University of California, Santa Bar- pressed by his experience and work ethicbara, with a degree in economics and an that I invited him to partner with me onemphasis in accounting. Afterwards, I was syndicating real estate projects. able to achieve one of the accomplishments Having worked closely with him for al-I am most proud of, passing all four parts most six months now, I can say that hes theof the CPA exam in one sitting, a feat only real deal and youll be in for a treat if you 10% of candidates have been able to do. get the chance to work with him. Mathew After passing the exam, I worked as a has many strengths that make him a greatCPA, auditor and business adviser, help- partner: integrity, organizational skills,ing my corporate and individual clients and real estate and investment proficiency. increase their bottom line, helping them Plus, hes very likable.find fraud risk factors inside their business I have met a lot of people in this business,systems and auditing their accounting re- and I expect great things from him in the cords. coming years. I guess that is why I am so good at do- I recently sat down with him to ask about ing due diligence on real estate transactions his real estate investing strategies and thenow. The accounting and due diligence current projects hes working on out in Ten-skills are a perfect match for a real estate nessee. Mathew has purchased, renovated,investor, I just had to adjust my personality and sold or held more than 100 investment to be more outgoing and personable, which properties in the last three years alone. most CPAs are not known to be. Being in Below is a partial transcript of the inter- the real estate industry as a full-time inves- view I had with him.tor, I am finding it is rare to find a CPA who understands the tax and legal implications Ginger: Mathew, in your own words,of investing and the real estate investment what exactly does OCG Properties do?side in detail. Mathew: In a nutshell, we help people in- vest in real estate. At OCG, we sit down andGinger: So tell us, how did you get your go over our clients financial situation andstart in real estate? resources to help them find the best ways Mathew: I started investing about five to invest and meet their individual goals.years before I decided to take some real With good in-house management in place, estate education courses and quit my cor- you can hold for long-term growth and re- porate job cold turkey. I found that the skill ally get a great return on your money. On sets I gained from working at CPA firms top of that, the price points are low enoughwere hugely valuable, and I still hold the that you can buy with cash and not even partners of those firms with the upmost have to deal with financing. Talk about low respect for what they taught me, the eth- risk! ics they instilled in me and the guidanceWe help our clients achieve great returnsthey gave me. However, the skills that I on their money while doing all of the due have developed running my own company diligence on every investment. We bring a are unparalleled to anything I would have ton of real estate experience to the table andever expected. While working for myself, help our investors every step of the way. I started flipping and holding properties >Realty411Guide.comPAGE 11 2010 reWEALTHmag.com 10. in Memphis. I got through my initial learn- that the current reported unemployment to go out and develop a team in every mar- ing curve and kept striving for more dealsrate is 12.8%, there is a $19.9 billion dollar ket, which is exactly what we did out in with a magnificent obsession for real estategap in the California budget, the California Memphis. We have in-house management that only few can really understand. It was mortgage delinquency is up almost 100% and a team on the ground there that helps tough, but after getting through the strug- year on year, 90% ofus get all of the gles, you find yourself breaking throughthe Alt-A and Option Mathew Owens, his brother and little sister. information we and finally achieving success. Working that ARM loans comingneed to be suc- much taught me multiple things. But one due are underwater in cessful. thing stuck more than anything else: Pas- California, 1/3 of Op- sive income is the goal!tion ARM loans areGinger: What delinquent already, the team members Ginger: You live in Southern California California tax rate roseshould one have and invest in Memphis, Tennessee. Why from 9.3% in 2008 towhen investing do you invest so far away from where9.55% in 2009, and it out of state? you live? will rise again to coverMathew: There Mathew: That is right, I live in sunnythe gap in the budget.are a number of Redondo Beach and invest in Memphis. On top of all that,team members Most of the investors I meet ask me thispeople who are under- you need in order exact question, and the simple answer is: water in their homesto be a success- I invest with logic and statistics, not based and not in financialful real estate on what my emotions are telling me. hardship are starting investor. At the Look at the economics in the Memphisto walk away becausetop of the list market. It has one of the highest price-to- it does not make finan- for any buy-and- rent ratios in the nation! It did not take acial sense to hold them hold investor is a huge dip like a lot of markets, it had an av- and hope they go up great, and I mean erage annual appreciation of 4% per year$200,000! G R E AT, p r o p - over the past 20 years. Its a very stablee r t y m a n a g e r. market. The population is also expected toGinger: Im an out- Property man- increase and you can pick up property thatof-state investor too but other investors agement is the number one reason an in- not only cash flows but gives you apprecia- may be skeptical about owning property vestment property will fail to produce posi- tion potential in the next 10 years, which is so far away. tive cash flow, assuming you did yournumbers correctly and did not buy in aghetto. In addition, an investor needs lend-ers, REALTORS, inspectors, appraisers,attorneys, CPAs, IT consultants, marketingagents and the whole nine yards to reallydevelop a good system. Each team memberis crucial to your success, and that is whyinvesting in real estate can be so difficultat times. Your team can make or break you, andyou need to have reliable team membersthat communicate well with you to be suc-cessful.Ginger: What separates your company, OCG Properties, from the rest? Mathew: At OCG we have in-house prop- erty management, which is the key to our A sample OCG Property. and your investment success. We also take an ethical and conservative approach to in- not something I can say about California. Mathew: They are really missing out!vesting and do all of the right due diligence California is a huge risk right now for buy-Ginger, we both know that with technolog- on every investment. and-hold investments. ical advances you can invest anywhere inWe really care for our clients and care If you take a look at some of the econom- the world now, and its as if youre invest-about their goals and what their interests ic indicators in the California real estate ing in your own backyard. are. We have a guaranteed tenant and reno- market, some of the things you will find areThe reality is, everyone has the resourcesvation on every property, and put the properRealty411Guide.comPAGE 12 2010 reWEALTHmag.com 11. structuring and risk miti-exactly what the majority of men do. gation procedures in placeIf you never quit, you will succeed no on every investment. We matter what adversity you face. also set up proper com- Ginger: What is the first step someone munication procedures needs to take to invest with you? for our management com- Mathew: They need to call us and sched- pany to keep our investorsule a consultation. We look at each inves- frequently updated on the tors resources, financial situation and in- progress of their invest- vestment goals to make sure we help them ment. invest the right way and surpass their indi- vidual investment goals. Once an investor Ginger: What due dili-schedules a consultation with us, we move gence is done on your them from sitting on the sidelines to devel- investments?oping a passive income stream to retire on Mathew: Wow, where as fast and safely as possible. do I begin? I will give you the quick version. ToGinger: Do you have anything else you start off, we do a completeMathew: Do not give up, no matter what.would like to share with our readers? neighborhood analysis on every propertyAny business, any new venture or opportu-Mathew: Yes, thank you. I would just like along with a market value analysis, whichnity that you want to achieve, is 90% men- to add that some people will make up ev- includes pulling comparable sales and get- tal and 10% skill. If you never give up, you ery excuse in the book for why they do not ting an appraisal done before we close es- can never lose. Its best said in the book or cannot do something. I am here to tell With technological advances you can invest anywhere in the world now, and its as if youre investing in your own backyard. crow. We also do a rental analysis, cash Think and Grow Rich by Napoleon Hill:you that you can do ANYTHING if you flow analysis, profit analysis, renovation Before success comes in anyones life,focus and take ACTION steps towards its analysis and every kind of analysis a CPAone is sure to meet with much temporaryachievement. can think of to protect ourselves and ourdefeat, and, perhaps, some failure. When Do not let your emotions tell you it can- investors. defeat overtakes someone, the easiest andnot be done, even if you were not initially In addition, we get an inspection by a most logical thing to do is to QUIT. That is successful. Even if it is difficult to see how qualified inspector and compare it to the you are going to accomplish it, dont give renovation bid. Each renovation bid comes up. There is always a way, but it comes with an item-by-item, room-by-roomdown to taking action. Most people give breakdown of the renovation costs, includ-up at the mere thought of difficulty, and ing materials and labor. This is extremelyyour success in real estate, and in life, are important so you know what your costs are going to be based on your ability to focus going to be on future renovations. When and take action. leasing a property, it is important to get aAlso, a successful investor has to be qualified tenant. If you do not, you will becompletely dedicated. They must ignore all sorry later when you have to evict them of the people who have an opinion but are because they cannot afford the rent. We less- educated about the subject. qualify them similar to a home loan pro- cess. We look at their debt-to-income ratio Ginger: Thanks, Mathew. I wish you and credit. We do a background check andcontinued success in your investments. really get a good assessment of their per-Mathew: Youre welcome, Ginger. sonality, which can tell you a lot. For more information, please visit: Ginger: What tips can you give to peoplewww.ocgproperties.com or email: who want to get started investing in real invest@owenscg.com | OCG Properties estate? Photograph of Mathew Owens by Sam Green can also be reached at: (424) 757-4680Realty411Guide.comPAGE 13 2010 reWEALTHmag.com 12. Invest Investment Vampires in YOU for the Next Decadeby Richard BarrettT Never Miss an Issue! he ten years ahead of us will be cant inflation soon. Experts argue that de- Realty411 Realty411 Wealth Real Estate extremely difficult for investors. flation is the bigger risk. While that may th A e Pu Sp blish ecia l Ed s oferiti Real on ty fro 41m 1 Yield and growth will be scarce, be true, it does not make inflation any lesswww.realty411guide.com | Vol. 3 No. 2 2010A Resource Guide for InvestorsTips for Long-DistanceVol. 1 No. 1 2010 LANDLORDINGMaverick Investor GroupTurn-Key Rentals but much worse will be the fourdestructive when it starts nibbling at your Around the Nation Cash Flow from the Comfort of Homevampires waiting to suck the life out ofinvestments.almost every investment you consider. In Mathew Owens, CPA, owner of OCG PROPERTIES Buys & Rehabs Rentals in Tennessee from Redondo Beach Look Inside Get the Deals DONE Learn Creative Real Estate Techniques from Dave Lindahl, Dolf de Roos,this article, we will meet each vampire in- Garlic to Protect Your investments fromdividually, understand how they drain yourthe Ination Vampire Bruce Norris, Bill Gatten and more!FREEWealth Celebrating the LargestReport!Issue with More Pages & Opportunities than Ever!photo by Sam GreenServing the Needs of Accredited Investors - INSIDE: Information to Grow and Maintain Your Wealth16 Words of Wisdom fromMasters of Real Estate 19Maverick Investor Group Reveals the Next BIG Thing 35 Bruce Norris Prepares for Annual I Survived Real Estate Charityinvestments dry and learn about some in-To protect against the corrosive power ofvesting garlic that can keep them away.inflation, you need investing vehicles with2 Magazines, 1 Mission: three specific features:To GROW Your Wealth Ination: the First Investment Vampire.Asset value that tracks inflation.If you remember President Gerald FordAsset income that tracks inflation.Subscribers are Invited tothen you may remember his Whip Infla- Asset that has considerable leverage.Our VIP Networking Events tion Now campaign, created to fight infla-Its no surprise that investment real es-tion climbing over 10%. Eventuallytate has all three of these critical features.& Receive POCKET Deals by Emailinflation reached over 14% In general real estate values track2 Years for Only $49annually in 1980, usher- inflation. That is, their value Circle magazine of choice:ing in years of stagfla-remains constant or appre-tionhigh inflation ciates even as the valueRealty411 RE WEALTH combined with highof each dollar declines.unemployment. In Likewise, the incomeonly five years the rentfrom investment_____________________________________ value of invest-property tends to trackName as it appears on credit cardments dropped byinflation. And finally,50% and the dollaryou can leverage yourlost almost 75% of investment asset._____________________________________ its purchasing powerCredit Card # (visa, mc, amex)during that decade. But Not Just Any RealThis year, with unem- Estate!_____________________________________ ployment and underem-In truth, most real estate doesExpiration Date CVC codeployment already approachingnot deliver these three critical fea-25%, the nation is poised to see a replay oftures. The past few years, have seen crush-those difficult years.ing drops in the price of condos in Miami,_____________________________________To estimate the curve of inflation in this almost any property in Detroit, suburbanSignature Requirednew decade, we need a basic understand- tract homes in Phoenix, plus office tow-ing of the causes of inflation. Noble Prize ers and shopping malls across the country._____________________________________ winning economist Milton Friedman said it Buying investment property takes effort,Mailing Addressbest, Inflation is always and everywhere considerable research and a team of ex-a monetary phenomenon. In other words, perts working to assist you. With the rightwhen the Federal Reserve prints moreguidance and team in place, an investor_____________________________________ money than the economy can absorb, thewill never have to worry about those evilCity StateZip economy catches a bad case of inflation ininvestment vampires.the next 12-24 months._____________________________________The money supply exploded in 2009. ItEmail Address or Phone (to join our network)doubled in the space of a few months andRichard Barrett is CEO of RBS Homesthen grew another 50% in the next year. (www.RBSHomes.com). With offices Go Green! Fax copy to: 310.499.9545 Since the economy has not grown by based in California and Texas, RBS Homesor email: info@realty411guide.com150% in the past two years, all this moneyprovide investment properties with these 4221 Neosho Ave., Los Angeles, CA 90066 Questions? 310.994.1962is waiting in bank vaults to drive signifi- three critical factors in place. Realty411Guide.com PAGE 14 2010 reWEALTHmag.com 13. HRDmoney.com Matts Foreclosure Home BuyingWE PAY 10%ON SAFE INVESTMENTS Secrets purchase online at: mattsforeclosurebook.comBANKS, PAY YOU WE, MAKE YOU RICH!Write a testimonial andPEANUTS receive a complimentary FREE workbook on achieving your goals,great for any business... call to learn how!NEW Investment Program...A real estate training program that will include2% INTEREST 10% INTERESTan investment property with the training!INVEST $100,000 INVEST $100,000 Only 7 investors who want to take action will be accepted.YOU RECEIVE (mention code RP2R2010 to get an application)YOU RECEIVE$2,000$10,000562-443-7042 JERRY ELKIND, Investment ConsultantAward Winning National Relocation Specialist (310) 391-1153 Most Outbound Referrals for Prudential CA. Realty 2009 Matt Malouf, jerry.empire@gmail.cominvestwithmatt.comSFR, RSPS, GREEN Lic # 01811908 14. The world of real estate investing is a small one.Investors rub elbows at similar events, read in-dustry publications and generally run in the samecircles. Carter Froelich, an author, investor and CEO of The Property Ledger, recalls the time he met best- give& the latestDolfreadersCarterTips from AZ selling author and renowned educator Dolf de Roos, Ph.D. The two savvy Phoenix-based investors became friends after an introduction by Andrew Waite, publisher of the Ari- zona-based, Personal Real Estate Investor magazine. At the time, Froelich was busy developing The PropertyInterview by Carter Froelich, CEO of The Property Ledger Ledger, his online software designed to analyze property holdings, store documents and forecast future returns. Once ready to launch, he asked de Roos to test out his creation. That was three years ago, and de Roos still uses the software to track his portfolio. Recently, Froelich welcomed de Roos home from his ex- tended visit to Australia. The famed author of eight books, including the New York Times Best Seller Real Estate Riches, was visiting Down Under to raise private money for property investments in Arizona. It proved to be a won- derful opportunity for one master investor to interview another. Froelich enthusiastically took on our assignment and provided an outstanding interview. This indeed is a rare treat; prepare to learn from two of Dolf de RoosCarter Froelich Arizonas top real estate investing giants.The EditorCarter: Hello, Dolf. Tell us about what Dolf: I like being on the cutting edge of cloud, you can access your portfolios de- youve been doing lately and give inves-what is available. I have always done welltails from any computer connected to the tors your perspective on the market.with new technology. When fax machinesWeb. Before long, most services will have Dolf: Well, Carter, although the media re-came out, it saved us thousands of dollars athat feature, but by then The Property Led- peatedly states this is the worst real estate year in courier fees. ger will have innovated yet another area. market we have seen in decades, it is onlyNow, we dont fax; scanned attachmentsSurfing is so much easier one foot ahead of the wave than one foot behind. Furthermore, having all the details of ... with the information stored in the cloud,a property, including title documents, HUD1s, leases, management agreements, you can access your portfolios details fromand the like, stored in one central reposi- tory is simply a great way to run your prop- any computer connected to the Web. erty investment business. Once you have experienced it, it is difficult to revert back. It would be like going back to using slide- the worst market if you are in the unfortu- are better quality, in full color and dont rules, or for those readers not old enough to nate position of being forced to sell. If you require an outdated phone system to get remember what they are, the curly-paged are in the fortunate position of being able through to a recipient. and faded fax machine if they even re- to buy, then by definition, this is the bestWhen I come across people in the real es- member that! market we have seen in decades. tate industry who do not use email, and in- With that said, there are still many whosist on using faxes exclusively, I think they Carter: Since you travel often, are the have trepidation about entering our current must miss out on deals because of their features of Electronic Library useful? real estate market. This has forced me to goaversion to new technology. I do not want Dolf: Absolutely. In fact, more and more overseas. There are many countries rightto fall into that trap. The Property Ledger companies are trending towards cloud now experiencing the peak we saw a fewis cutting edge, extraordinarily useful and computing. Clearly, it is convenient to years ago so they see the relative merits ofeasy to use. Why would you not use it?be able to access all the relevant data on bringing their money to the United States a property from anywhere and not have and investing here. Carter: What benefits are provided by to be concerned with taking up space on The Property Ledger, which other prod-your own computer, keeping data in sync, Carter: Why did you become interested ucts do not provide?having the data concerned fall into strange in The Property Ledger? Dolf: With the information stored in thehands in the event of a computer loss, in- Realty411Guide.com PAGE 16 2010 reWEALTHmag.com 15. stalling upgrades, etc. It is all done for theinvestments regularly, with real estate, you simply the income divided by the invest- end user. can buy a property and put the title in a bot- ment. With real estate, since you only need tom drawer, take a six-month cruise, and to come up with a small portion of the pur- Carter: Why is it important for investors not worry if you should sell the propertychase price in cash, the cash-on-cash return to monitor the financial performance of again. However, it is comforting to be ablebecomes very important and, dare I say their real estate portfolio?to put your finger on the pulse of how yourit, interesting. It is an advantage inherent Dolf: Interestingly, it is important for inves- investments are performing.in real estate investing that is often over- tors in stocks and commodities to maintain looked by financial advisors. a vigilant eye on their volatile investmentsCarter: What is your favorite financial so that they can jump ship if the ship starts calculation when analyzing your proper-Carter: What type of investment do to sink. With real estate being a much more ties? And why? Here are the choices: you favor right now and why? stable investment, much of the interest inGross Rent Multiplier Dolf: When it comes to residential property, monitoring your portfolio is just that: inter-Cash-on-Cash Return on Investment I prefer the single-family home. However, est. However, if you want to know whenAfter Tax Cash-on-Cash Return for the last two decades, I have personally you can invest in yet another property, Internal Rate of Return focused on commercial real estate. That based on cash-reserve build-up, equity po-Return on Equitydoesnt mean I havent invested in other sition, available collateral, etc.), then you Dolf: I like to analyze based on cash-on-sectors but the benefits of commercial real want to have the up-to-date information cash return. This calculation shows youestate for the property owner are incred- available instantly. The Property Ledgerhow the cash you are putting up is perform-ible. Here are just a few of the benefits: provides just that when you need it.ing. It is the prime indicator of how you1. The leases tend to be much longer can truly leverage your money. What otheranything from three to twenty years. They Carter: How often should an investorinvestment allows you to get a $100,000are generally secured by the business, with track the financial performance of theirasset for only $10,000 or $20,000 in cash? the owners offering a personal guarantee. real estate portfolio?For most investors, you cant buy2. Commercial tenants tend to maintain the Dolf: As often as they feel comfortable.$100,000 worth of stock or gold or oil property better as the look and condition of One of the advantages of real estate invest-without coming up with the entire pur- the property is important to their business. ing that I often tout is that unlike the stockchase price in full. When you put up all the market, where you have to monitor yourmoney to buy an investment, the return isContinued on next page 16. Dolf & Carter, pg. 17Tenants often improve and up-the Gilbert Planning Commis- grade the space with their own sion. This is indicative of the money. long term. In the short term, 3. With residential property, thethings look pretty grim, again, landlord tends to pay the outgo- if you are forced to sell. There ings such as property taxes, in- is word on the street that there surance and maintenance. Withwill not be a u-turn for years. commercial real estate, the ten- Things go in cycles. When ants who are leasing the prop- you get old enough to have erty, pay for those expenses.experienced a few cycles, youlearn to embrace them rather Carter: Were both located inthan fear them. There will be a Arizona; lets discuss the local turnaround. If you can buy real market. Where is it heading? estate that cash flows now and Dolf: Im optimistic. There washave a great chance that long an article in the paper just three term the capital value will go days ago stating Taylor Morri- up immensely, why would you son Homes will begin construc- not acquire some real estate? tion in July of a master-planned Learn more online about community in Gilbert. ThereThe Property Ledger, visit: will be 17 phases developedwww.thepropertyledger.com over the next 12 years accord- To reach Dr. Dolf de Roos, visit: ing to the report submitted to www.dolfderoos.comFREE e-Book Offer, For a Limited Time! Download The Real Estate Wake Up Call Todayhttp://thepropertyledger.com/buy/90-the-real-estate-wake-up-call-e-book-free 17. Maverick Investor Group Scours the Globe for the Best Investment PropertiesInterview by Linda Pliagas With a name like Maverick, oneimmediately expects the unex-pected. Real estate with a hip and a bit of a rebellious twist.Maverick Investor Group delivers all that and more. It is a real estate brokerage that caters to a community of sophisticated real estate investors and agents, all of whom are committed to using real estate as a vehicle for designing their lifestyles. The broker- age is licensed with its primary office in Las Vegas, but the Maverick principals all live in different states, work from laptops on rooftop pool decks, and travel the globe in search of premium buying opportunities for their exclusive clientele.Maverick negotiates directly with devel- opers and owners for prices and terms that are not available to the public. The buying power of the Maverick community enables developers to move more properties in less time and save money on advertising, mar- keting and other normal overhead. This al- lows them to offer special prices and terms to buyers in the Maverick community that they could not offer to the general public.Indeed, the traditional brick-and-mor- tar neighborhood brokerage dedicated to farming a five-mile radius, driving buyers around and sitting at open houses seems like an archaic business model next to Maverick.Even more avant-garde than their busi- ness model is their corporate vision: ToMark Solak Valerie Schrock Matt Bowles Next Destination: The Hidden Tropical Paradise of...Nicaraguaradically improve peoples lives throughclose as many as 34 transactions and paythe international component, is just a con- real estate. out nearly a quarter of a million dollars intinuation of the global lifestyle enjoyed byAnd their radical approach to real estatebuyer referral fees to real estate brokers in its principals. The company was founded is working. Even during 2009, in a single the Maverick Referral Network.by Mark Solak, Valerie Schrock and Mat- 90-day period, the company was able toMavericks business model, includingthew Bowles real estate investors >Realty411Guide.com PAGE 19 2010 reWEALTHmag.com 18. and licensed real estate professionals withworthy people I had ever met, all essential we use. It was crucial for everyone to start formal, advanced degrees. Prior to joining qualities for business partners. The three of with the vision of their own ideal lifestyle. forces, they led cosmopolitan lives, trav- us began pooling our skills, resources andMatt likes to work from his rooftop pool eled the world and lived in foreign coun-creative energies to develop a cutting edge deck in LA, Mark likes to spend extended tries for extended periods of time.business model that could provide unparal-time in Europe each year, and I like to goRecently, I caught up with the Maverick leled advantages to real estate investors and skiing in Canada and spend part of the year power trio to discuss their latest turn-keyreal estate agents. In 2007, it was ready toin Phoenix with my parents. So we struc- buying opportunitythe Seaside Mariana be launched so we all quit our jobs, flew totured our real estate business to facilitate Spa & Golf Resort on the Pacific coast ofLas Vegas and, while overlooking the Stripour dream lifestyles. But, more than that, Nicaragua. from a rooftop lounge, raised our glasses Maverick has built an entire community Seaside Mariana Spa & Golf Resort features the first Jack Nicklaus Signature Golf Course in Nicaragua. Q: How did the three of you become busi- and announced to the world that Maverickof real estate investors and agents who are ness partners? Tell us a bit about how Investor Group was born!focused on using real estate as a vehicle Maverick Investor Group formed?for designing their dream lifestyles. We MB: Well, Valerie and I met in graduateQ: The Maverick partners live in differ-show our clients how to do what we do. school in 1999. We both got masters de- ent states Matt is in Los Angeles, Valer- You will notice that we have a section on grees in International Peace and Conflictie is in Washington D.C., and Mark livesour website that discusses real estate life- Resolution and then worked in humanbetween Chicago and Las Vegas. That isstyle design in great detail, down to the rights advocacy in Washington, D.C., for pretty incredible! How did you decide tospecific technology products we use. Real several years. We started investing in realstructure your company like that and howestate investing is only a means to an end estate on the side, reading books about it does it affect your business? its always important to keep your eyes on and learning by experience. Soon we hadVS: We were intentional about structuring the larger prize. Money isnt very useful millions of dollars in real estate holdings in the company that way from day one, andif you have lost touch with your dreams. states all over the country. the primary reason is freedom of mobili- How can real estate enable you to recapture I met Mark in 2005 when he sold me overty for the Maverick partners. Its all about your time, design your dream lifestyle and $2 million worth of investment propertieslifestyle. We can live wherever we want make enough money to finance it? Thats in Las Vegas. I was blown away by hisand travel whenever we want for as long the big picture. customer service; it was the best I had ever as we want, and no business falls through seen in any industry. These were two of thethe cracks because of the systems and pro-Q: Maverick has always encouraged most talented, ambitious, honest and trust-cesses we have set up and the technologyout-of-state investing, why are you nowRealty411Guide.comPAGE 20 2010reWEALTHmag.com 19. moving to international realment in Nicaragua, making estate? it particularly friendly to for- MS: For the same reasons, eign real estate investors. were just expanding the play- For example, as an inter- ground. The reason why Inational investor who lives would never limit myself to in the US, I can own freehold buying in my own city or stateproperty in Nicaragua with is because there might be a bet-title insurance from a North- ter market than the one I liveAmerican-based title com- in. The failure to consider in- pany, and when I sell it for ternational real estate markets a profit I will owe no capital produces the same restriction.gains tax in Nicaragua. Pres- I want my money in the best ident Ortega has personally market in the world no matter endorsed the Seaside Mari- where I live, period. Maverickana resort because it is an- is opening up a private chan- ticipated that it will result in nel for real estate investors toan explosion of tourism and access unlisted properties in be a huge economic boon for premium global markets, withthe country. So the govern- property management options ment is very supportive of in place and a variety of exitforeign investors coming in strategies. Buying throughto buy real estate. Maverick has always meant Seaside Mariana Spa & Golf Resort sits on 2 kilometers of pristine beach front. getting exclusive prices andQ: What kind of deal terms terms that are not available to up the coast is Nicaragua. It borders Costa was Maverick able to nego- the public. That has simply expanded to Rica and has the same weather, the same tiate at Seaside Mariana and how can our the international arena.beaches, the same sunsets, but a much readers get in on the action? lower cost of living and, at the moment, VS: As you know, our prices and terms Q: Why did Maverick choose Nicaragua? much lower property prices. Seaside Mari- are not available to the public, so I cannot And why the Seaside Mariana Spa & Golf ana will be Nicaraguas first luxury resort unveil any details here. I will tell you that Resort project in particular? with a five-star international brand hotel this is one of the most extraordinary deals MB: Over the last two years, the Maverick and a Jack Nicklaus signature golf course. I have ever seen and that we have a global partners have traveled throughout Europe, We are talking about a 923-acre resort on exclusive on the entire resortthe only the Middle East, the Caribbean and Central 2 kilometers of pristine beach front. Noth- way to buy a property at Seaside Mariana America to review real estate projects. In ing like it currently exists in Nicaragua. is through Maverick. our opinion, Nicaragua is one of the pre- This project will single-handedly take theFor detailed information and private ac- miere emerging markets on the world stage country to the next level as a tourist desti- cess to our special prices and terms, your today. When you look at a map of Central nation. When the number one golf course readers will need to become part of the America starting from the south, you be- designer in the world chooses to go into a Maverick community. Real Estate Inves- gin with Panama, then Costa Rica both market for the first time, real estate inves- tors can apply to join our community of of which have already exploded as tour- tors should perk up their ears. It is exactly VIP Buyers and get access to unlisted deals ist destinations over the last 15 years and these types of seismic events that I look for like Seaside Mariana. Real Estate Agents have seen corresponding appreciation in when I choose where and when to invest can apply to join the Maverick Referral property values and the next country my own money.Network and make 3% every time their cli- ents close on a Maverick Deal. Q: What is the politicalWe invite smart real estate investors and and economic climate in savvy real estate agents to contact us today. Nicaragua right now?We dont care if someone has a lot of ex- MS: Nicaragua has had perience, we care if they are serious about a democratic government using real estate to build their wealth and for the past 20 years and design their lifestyle. has had five transfers of power during that time. For information, contact Maverick Investor Recently, the government Group: www.maverickinvestorgroup.com or has been passing laws to email: info@maverickinvestorgroup.com. encourage foreign invest-Realty411Guide.comPAGE 21 2010 reWEALTHmag.com 20. Blue-Chip Real Estate Strategy Fits Economic Climate by Ryan Hinricher, co-founder of InvestorNation.com This article originally appeared on BiggerPockets.com Ta lot of investors get well-versed in Section 8 you can profithe housing recovery isin trouble. The lowergreatly in the lower-end homes.limping along slowlypriced homes usually The median-priced home becomes theleaving many real es- have households with blue-chip property. The blue-chip hometate investors wonder-limited to no savingshas lower levels of vacancy and rents that ing where to invest their dollars. or emergency fund. Sohave been buoyed by average people be- Some speculation is even re- when a tenant loses aing displaced from their primary residence turning to the market with new job, the property ownervia foreclosure. In the market where my investors looking to purchase, feels that impact pretty company is located, average-priced homes renovate, and resale distressedquickly. Also lower- are selling for around $115,000. Obviously properties for short term profits. priced homes tend to with distressed inventory out there, one can Owning a real estate investmentbe in older areas giv- purchase properties at lower prices than Ryan Hinricher brokerage allows me to see a va- ing the owner a much this, improve them and probably have eq- riety of transactions, including retail flips higher rate of maintenance. uity that is more tangible than lower-priced from speculators, investors buying $8,000 homes. How can one possibly model a homes, renovating and placing tenants inThe Numbers $115,000 home the same way as a $30,000 them, and a higher quality purchase and This is where investors usually make mis- home? The $30,000 home (in most cases) hold homes closer to median home prices.takes. The surface numbers can be verywill have significantly higher rates of va- The latter is a strategy that I believe right deceiving in real estate. When analyzingcancy and maintenance. now is being overlooked by many inves-a real estate transaction If you go up a step to tors. many investors arent the higher-than-average using vacancy and main- priced homes, youll no- The Product tenance, or applying thetice those homes might There are many markets where you cansame vacancy and mainte-offer stable tenants, usu- purchase and hold homes at the median nance numbers to homesally high-end profession- or even average home price and receive athat vary widely in price,als who will reliably pay positive cash flow with a traditional 20% age, neighborhood, size the rents. The cash flows down strategy. These homes, are out-per-and city. This can cause amay look lower on the forming many lower-priced homes frompretty big disappointment surface than other types of rental prices and home values perspective.when the cheap property you purchase is homes but these blue-chip homes perform Median-priced homes in most markets are affected by socio-economic issues leading more reliably on maintenance, vacancy, three bedrooms, two bathroom homes, to high tenant turnover, criminal element,and valuations. which offer good car storage. Usually thisslow-paying tenants and maintenance is- is the type of home most Americans desire sues. Financing to live in ensuring you always have both an Ive seen many people advertise profor- Financing on blue-chip homes tends to be available rental pool and an available buyermas with high cash flow on smaller, older much easier than most any other price point pool. This product offers real estate inves-homes in areas with high crime, poverty,for a number of reasons. First because the tors multiple exit strategies with the abilitypoor schools, and with low rates of homeprices are low enough you dont worry to sell it retail versus lower-end properties,ownership. One can argue that these can beabout jumbo loan pricing, rates, and re- which usually need to be sold to other in-good investments structured correctly and strictions. On the lower end not all lenders vestors.by applying the right metrics to ensure a are lending on homes priced under $50,000 In addition, median-priced homes aremore accurate projection of cash flows is and at times have a different rate table. In usually in areas low in crime, close to achieved. These lower-end properties have and around the median price nearly every schools, shopping, houses of worship, and become the penny stocks of the real estatelender offers investor loan products. Ive with easy access to employment. The in- investment business. If you get the perfect also found the appraisal issues are fewer verse of this is, of course, also true. I per-tenant who doesnt feel the pains of thebecause normal sales activity exists at this sonally own properties at much lower pricerecession, maintains the home themselvesContinued on page 24 points as well. They took the hardest hit and stays in the property for a long time, on rents and value. This is where Ive seen you could hit pay dirt. Similarly if youre Realty411Guide.com PAGE 22 2010 reWEALTHmag.com 21. Blue Chip Real Estate Strategy, pg. 22 price point. When you have aida, which were impacted verylot of normal sales, valuationlittle by the housing boom andtends to be (somewhat) stabi- bust. Many of these cities havelized.a good economic future, afford-able tax rates, net populationExit Strategy growth, and high enough rentsHaving an exit strategy is an es- to achieve positive cash flow atsential part of your real estatethe median home price.plan. Some investors plan onnever selling and while thatIn Summarycan make sense to receive all With distressed properties mak-the benefits of real estate, livesing up a large percentage ofchange. If you think back fivetotal sales, then it only makesyears ago and how different sense to focus on buying blue-things in your life were at the chip homes at a discount today.time, you might agree that hav- In doing so, one can realizeing an exit strategy is impor-equity through quality reno-tant. vation, placing a tenant andWith these blue-chip invest-holding. These homes shouldment homes, youll find mul-provide you relative peace of Having an exit strategyis an essential part of your real estate plan.tiple exit strategies. Median-mind when compared to lowerpriced homes have the widestprice points due to the loweravailable buyer pool. Think socio-economic risk discussedabout that for a minute: Lower- earlier.end homes typically are resoldThese types of rentals are ato investors. So imagine buying good fit for people looking toa home on the lower-end at 60 diversify out of equities andcents on the dollar and thinkingaccumulate a few properties.you have a lot of equity. In fact While they may offer strongerif your future end buyer is anfundamentals than most prop-investor, do you think theyllerties they obviously arentpay 100 cents on the dollar?bullet-proof. These are compa-Time on the market is alsorable to owning GE stock (GEanother factor. At the median-registered no U.S. profit lasthome price, time on the marketyear). While you can dependis usually shorter than any other upon these homes most of theprice point. So in planning yourtime, the downside risk is usu-long-term strategy it seems toally minor price depressionmake sense to invest in homes during an economic recession.that could be sold quickly, fi- Lastly, in many markets thisnanced easily, and sold at or type of product and strategynear market value?simply wasnt an option whenprices were higher. I doubt thatWhere to Find very far into the future thisThere are many markets youopportunity will be as widelycan find these types of proper- available again in as many mar-ties in today. Without goingkets as it is today.into much detail in this article, -there are plenty of cities whichRyan Hinricher is co-founderlie in states outside of Califor- of Investor Nation, visit online:nia, Nevada, Arizona and Flor-www.InvestorNation.com Realty411Guide.com PAGE 24 2010reWEALTHmag.com 22. 3 FREE Ways to Find aGreat Wholesale Deal Today! by Ginger MaciasI just had a great call with one narrow down your search of my coaching students on to REOs, probates, fixers how to get a deal signed up by or other criteria. You dont the end of today. Times are tough, even need access to thefavorite ways to find deals is to ask other and although sending direct mail MLS, just find an investor-wholesalers what they currently have un- pieces is a great way to get leads,friendly agent and let themder contract and to market that property sometimes its just not possible know your criteria. They to my buyers list. Or, if youre a rehab- to send them out especially if will set you up to receive ber or landlord, you can pick up amazing youre just starting out. So over the years,free emails.deals without having to do all the leg work. Ive learned some cheapskate ways ofIts important to work with an agent whoWhere do you find these wholesalers? If finding leads.knows you want a smokin deal, and whoyou see a We Buy Houses sign, call them. will make lots of lowball offers on your be-Youll likely be dealing with a wholesaler. 1. Online RSS: If youve been in real es- half without flinching. Also visit your local REI meetings, Google tate any amount of time, you probably al- For most listings, other than REOs, you wholesalers in your area, ask rehabbers ready know that online sites such as Craig- can also try and make seller-financingwho they recommend, and ... dont forget, slist, Redfin, Backpage, Oodle, etc., can deals. The point is to get your foot in the ME! Im an active wholesaler in Southern have some pretty amazing leads on For door and start negotiating with the seller. California who loves working with other Sale By Owner (FSBO) properties. TheAnother lead system you can set up on investors. (Shameless plug? Of course.) If only problem is that it takes tons of time to the MLS is expired listings. These list-you get a deal done and need to sell your sort through all those sites to find a decent ings have expired without anyone buying property really quickly, let me know. deal. the property. This can mean youd be deal-Well, now there is no excuse for you notRhett Halsey, one of my good friends and ing with very motivated people! to find a deal today! Good luck and send an internet marketing guru for real estateSet up a win-win situation with yourme a brief email letting me know if you investors, told me of a free feature offeredagent where they can present your offer,found this helpful. by most websites: RSS or Real Simpleand if the sellers dont like it, the agent may Syndication. Instead of multiple searches be able to pick up a new listing. To contact Ginger Macias or learn about for leads, the leads come to you in one her speaking engagements and wholesale spot. You can set up a Google Reader ac-3. Other Wholesalers: One of my absolutedeals, visit: www.OCWholesalers.com count and have all these leads sent directly to you, the minute they are posted on one of these sites. Its simply amazing how much time this saves.We have just implemented this in my of- fice and within a few days got three proper- ties under contract and sold them within a few hours. My new assistant was floored at how quickly an investor can get a deal under contract and sold!To set up your own RSS feed, go to your favorite FSBO site, Craigslist (www.Craig- slist.com) for example. Do a search using motivated seller keywords like fixer, investor, etc., one word at a time. Once the search is complete, you can scroll to the bottom of the page and click on RSS or the little orange RSS icon. Set it up to point to your Google Reader, and youre done!2. Multiple Listing Service: Your local MLS (Multiple Listing Service) offers a great way to find leads for free. You can Realty411Guide.com PAGE 25 2010reWEALTHmag.com 23. A Brave Newby Bill GattenLets face it money for a dayWorld inthe country, or two at a highthe econ-interest rate (but atomy and the real a reasonable cost),Compromiseestate market is with which to pur-just terrible. There chase a foreclosed-are no more good upon property bydeals. Lets all get means of an all-out of the business. cash offer prior to People are not building, buying or sellingits scheduled pub- homes any more. There are so many over- lic sale date. And then selling it on the day for, or in advance of, services to be ren- encumbered and foreclosed-upon cheapof closing, or soon thereafter, in a separate dered, whether such services are actually properties available for pennies on the escrow settlement to an end-buyer who ob- performed or not. Another common viola- dollar that nobody wants them anymore.tains his own loan and lives in and loves tion has to do with sand bagging by attor- After all, who can make a living in this ri-the property forever. neys, and many non-attorneys, who bill on diculous business these days?This process is known as the A to B/B a monthly basis for services (mostly loanOh yeah? to C transaction. In other words, you, the modification schemes) while a short saleAnd Michael Jackson faked his death, investor are the B component; the cur-or loan modification process is presumably Elvis eats at Burger King, and the worldrent owner is A, and the end-buyer is taking place. Instead, either there never was ends in three years!C. In other words, B buys from Aany such attempt or the attempt failed, andNot that theyre needed anymore, but here are a couple solutions to these hor- rible problems facing real estate investors ...two REALTORS in Massachusetts were recently in this disastrous economy:sentenced to ve years in prison each for 1. Stay in bed with a tinfoil hat on your head. having used this scheme several times. 2. Go live with your parents and let them feed you until you win the lottery. in one escrow closing process (taking fullthe client wasnt informed and was told, 3. Go back to school on the government, ownership of the property), and then sellsWere working on itbe patient, while and get a law degree so you can force peo-the property to C at a reasonable profit in the monthly payments continue. ple to pay you to stop suing them.a wholly separate escrow process.Another big one, and one that is proba- OR...It all sounds simple and it is! However, bly most tempting but also most deadly for 4. You can capitalize on singularly the a thorough knowledge of all the rules and REALTORS, is the situation wherein the greatest money-making opportunity ever! regulations concerning short sales, equity- investor/REALTOR has already lined- And you dont even need a dollar or a dimepurchasing, equity-stripping, foreclosure up a retail buyer who is ready to take the to do it. consulting, credit repair and mortgageproperty at its true market value following lending is absolutely mandatory beforethe short sale acquisition by the investor. SHORT SALES becoming too far vested in the business When the scheme comes to light, the con- The short sale industry is burgeoning of short sales. To date, hundreds of other- tention by the lender in these cases is that now and will probably continue to do so wise nice-guy and gal would-be investorsif the property were worth more than they for three more years. New short sale mil- have been severally sanctioned, shut down,were told in the transaction, there would lionaires are being made every day. There heavily fined and/or sent to prison for vio-have been no need for a short sale and their are billions upon billions of dollars (Re-lating the very stringent laws regulating resultant loss. They see such schemes as member when a billion dollars was a lot short sales and foreclosure consulting in blatant bank fraud and have no sense of of money?) to be made in the transac-various states. humor in such cases. As a matter of fact, tional funding of compromised mortgageIn my own case, Ive spent my busi-two REALTORS in Massachusetts were defaults loans that would otherwise beness as a fearless bull rider: but in this last recently sentenced to five years in prison forced into expensive and time-consumingRodeo, Im sticking to riding milk cows.each for having used this scheme several foreclosures, and sold by lenders at public I wont set any records or win any prizes;times. auction.but Im a lot less likely to get thrown of and So the long and short of it iskindaDef: Short Sale: The acquisition of real have a horn poked up my rear end ( this, like Henny Youngman was one to say: If estate at a compromised (wholesale) pay-is, by the way, an analogy not a good one,its gonna hurt when you go like that for off amount that is less than the balance of I agree, but an analogy none-the-less). cryin out loud, dont go like that! the mortgage obligation. One of the most often violated of the Todays short sale market is burgeoning.Def: Transactional Funding: The two- many regulations being put on the books stage practice of using another personsas of late has been that of taking moneyContinued on pg. 29 24. 10 CA$HWeeks to OW with Matt Malouf T Macias by Ginger tors, courses and systems to help them since 2001. Over the years, he has special- real odays estate environ-achieve their success? Those of you whoized in wholesaling, owner financing and ment can seem a little estate are living the real dream, you know foreclosures. Malouf has developed a busi- tricky to navigate. So many that luck had little to do with where you are ness model that he describes as T.E.R.M. possible ways to make today. It takes concrete actions, goals and It is a model designed to efficiently money exist in this indus- guidance to get to your dreams. minimize the investors time, energy, re- overwhelm- try, it can beWell, for those of you starting out in real sources and money in that order, he ex-ing, especially for those who are just get- estate who are anxious to get going, thereplains.ting started in real estate investing. There are wonderful ways to get into all this ac-To that end, his program is a 10-weekare many late-night television shows that tion.course that walks investors through the ex-claim to teach you how to be a multi-gazil- Recently, I spoke with Matt Malouf act steps needed to find, analyze and buy an there any truthlionaire by next week, but is about his new program, which helps inves- investment property that cash flows fromto what theyre saying? tors bridge the gap from real estate dreamday one. Some topics include learning how Take a look around. Youll notice that to reality. And by reality, Im talking aboutto set up your property management team,there are a lot of successful real estate en- actually owning your very own investment screen tenants, how to hold title and financ- are making a kill-trepreneurs, people who end of the course! (More onproperty at theing options. ing today, in this down market. The ques- that later.) create this The motivation to coursetion is did they just start making lots of real estate Malouf is an investor-friendly came from Maloufs desire to meet the or did they have men-money by pure luck, has agent in California and been investingneeds of investors who want to get educat- 25. ed and match them with thepeople on the team. Malouf and best available product in the his team then go out and find a real estate marketplace.property that meets the stu-This hybridization will en-dents needs. They send per- able beginning investors to buy sonalized updates, letting them a property that meets their cri-know whats being done to find teria, after learning all the basic them a property. steps needed to acquire andThis program lays the foun- manage that property. dation to successful real estateThis is not just a course, investing. Malouf gives this Malouf explains. At the end of analogy: Its like building a 10 weeks, theyre going to have skyscraper. You have to spend a cash-flowing house, an assetthe time to set up a foundation to put in their portfolio. It isand set it nice and deep, nice all- inclusive in the program. and strong. That way, it willIt takes concrete actions, goals andguidance to get to your dreams.Maloufs T.E.R.M model isstand through the good and the ideal for someone who has a bad. full-time job and wants to start Maloufs T.E.R.M program building a real estate portfoliolaunched this summer and is as part of their retirement plan. available year-round to a limit-Over the course of 10 weeks, ed number of people. Be sure to students receive the entire reserve your place today. course through the internet,Readers can contact Matt which includes 30 to 60 minuteMalouf directly at (562) 443- lessons by audio, video and text7042; mention the out-of- articles. Each student also re- state magazine special. Or ceives the Million Dollarvisit: www.buysellwithmatt.com Rolodex, which gives the con-Enter the promo code Real- tact information of all the key ty411 in the note section.A Brave New World, pg. 27There really is no limit to the worm, and If everybody is number of homes in foreclo- doing it, its time to do some- sure that lenders would like to thing else. get off their books in order toOr reduce their matching fund re- Set B - Haste makes waste; quirements and free up more Look before you leap; and cash to lend out. Wait until all the bugs areMillions of dollars are readyworked out before you jump to be made by integrally in-in, or Wait until you see ev- volved entrepreneurs over the eryone else doing it, then jump next few years. in why take chances?To miss out on any of itMy own: Successful people would be an out-and-out shame make quick decisions and are if not a crime. slow to change their minds, theThere are two sets of adages unsuccessful are slow to com- to live by that one must ponder mit and quick to change their and decide upon before jump-minds. ing into the business: So, whats my advice regard-Set A - Strike while the iron ing the current short sale mar- is hot; He who hesitates is ket? OK, guess! lost; The early bird gets the Realty411Guide.comPAGE 29 2010 reWEALTHmag.com 26. [ Hitting the Club with Sensei at 12 Roundsby Linda Pliagas Self-reliance, balance, integrity: ness cards in hand. Dressed in casual cloth-and building wealth through cash-flowingthese are just some important ing, they chatted while munching on choc- rentals, all using Senseis Remote Rehab-mantras in the martial arts world.olate chip cookies. They discussed theirbing program. The Phoenix market is pro-Step into a monthly meeting atlatest deals, needs and goals.viding incredible wholesale deals on newer Black Belt Investors and youll soon dis-When the master approached the front, homes starting at $48,000, he says. Flip- cover these disciplines are in full force. the students took their seats and settled pers are turning their properties and cashingWith two locations in Southern California down quickly, ready to start their lesson.out about every 90 days. The buy and hold (Downey and Norco), Black Belt Inves-Senseis cash and wealth system is pure strategists are capitalizing on great cash tors provide a social network for bothflow averaging $900 per month. the novice and seasoned. It is a club Although he started his career as a where education is emphasized, deals are analyzed, and action is taken to Sensei Spills His Top 5 remote rehabber (his first deal was in Florida), he now prefers to wholesale reach goals.Secrets to Land a Dealand calls it: The Ultimate Real Es-Ricardo Valencia, a national investortate Cash Machine. His investing with holdings in four states (CA, TX, formula, Find it, Bind it and As- IN and MO), stressed the importanceCant seem to locate sign It, is used in California, but of attending monthly club meetings,a distressed home- the strategy can be duplicated in any as we were walking into a communityowner or unwantedarea, in any market.property? Believe it center in Downey. Wholesaling does not require cash,or not, many peopleWe have a responsibility to teach credit or a license, which equals NOhave real estate that those who are newcomers, he saysthey no longer need RISK. He further explains, The with a smile, And, at the same time,or want. (Yes, weintention is to sell the contract to in- you learn from those who are morefirst found this con-vestors who cant find a deeply dis- advanced. cept hard to believe counted deal on their own.Valencia, who travels throughout Sensei GillilandWhile many people, including Bro-too!) Follow these Los Angeles County to attend numer- five secrets from a master wholesaler,kers and REALTORS who do not ous real estate events, admits that and youll soon have more deals thanunderstand creative real estate, frown the members of Black Belt Investors time to work them.upon any deal that is not a traditional keep bringing me back ... its alwaystransaction, wholesaling retains an nice to mix and mingle with them.#5: Code Enforcement: Many local gov- important role in the community. ernment websites, such as Los AngelesWhat began as a casual meeting atAs a matter of fact, wholesalers are County, offer online lists of distressed a coffee house in 2000, by investor,often the first to spot and service a properties. This is an often overlooked martial arts expert and entrepreneur, treasure filled with potential gems.homeowner or property in distress. Sensei Sean Gilliland has becomeIn wholesaling, success depends on an organized official club boasting Continued on pg. 59 recognizing circumstances and offer- two locations and filling the rooming solutions. with a strong following each month. Sensei recalls one recent transac-Sensei chose to stake his claim in Downey,and simple. He trains his students on how tion in which he assisted a family made the city where he was raised. Next, he chose to create cash quickly through flipping realup of siblings scattered around the country Norco, the city where he now lives with hisestate so that resources can be funneled to who were feuding over an inherited home wife, Annamaria, a licensed REALTOR,purchase income-producing property. in need of many repairs. Because of the and their three children.And what areas are being focused on?stress it was bringing upon the family, theyThe club meeting room, located inside a Right now, he has two major target zones. wanted to dispose of the property quickly. community center, was full and bustling in Phoenix, Ariz., is his target zone for rehab- Sensei packaged the deal and sold it to a lo- May. The sweet aroma of freshly brewed bing flips and rentals; Southern California cal rehabber willing to put in a lot of sweat coffee and abundant smiles were inviting.is his bulls-eye for wholesaling properties.equity and cash. The investor was willing The group, mostly in their 40s and 50s,He and his members target Phoenix asto take a risk for a chance to profit. was diverse in experience and background.their area of operation for fixing and flip- They were master networkers, with busi-ping properties for immediate paydaysContinued on pg. 59 Realty411Guide.comPAGE 30 2010reWEALTHmag.com 27. California Trust Deed Investing Not everyone has the time or expertise necessary to be full-time real estate investor. But theres still a way to take advantage of the unbelievable opportunity at hand. Welcome to the world of trust deed investing.Savings accounts, CDs, and stocks have of dollars every month and demand 9% Return offered dismal returns over the past continues to increase. We scrutinize1st Trust Deeds Only several years. The Norris Groups trust deed investments earn 9% return backed a trust deed is ever presented to our No Pooling private money sources. 8-Year Term real estate.60-65% LTV Since 1997, our experienced team of resources are helping investors cleanCash Flowing experts has originated California trustCA Properties deed investments to private individuals,Ideal for Retirement accounts (including IRAs). Accounts (IRAs)Experienced TeamDVD on trust deed investing. Navigating the prof itable world oftrust deed investing with the help of one of Californias leadinghard money lending companies.Call or visit our websitetoday for yourFree Book and DVD. w w w.TNGtrustdeeds.com 951.780. 5856California Depar tment of Real Estate, Real Estate BrokerBruce Norris Financial Group Inc.DBA The Norris GroupDRE License 01219911 28. Investors & Industry Leaders Share an Evening of Glamour & GivingThe 3rd Annual I Survived Real Estate 2010 will Raise Money forBreast Cancer Research & Unite the Nations VIPs to Discuss Investing by Lori Peebles for investor rights. For the past two years, event honors her courageous effort to fightD he has united real estate giants to discussthis disease and hopefully adds to the like-oes Shadow Inventory really ex- the issues that matter, and most important- lihood of someday finding a cure.ist? What is the state of the REO ly, to exchange ideas that can help investorsIn addition to raising breast cancermarket? These are just some of do what they do best: rebuild communitiesawareness and funds for research, as well the crucial questions to be and rejuvenate econo-as providing investors of all levels access Bruce Norris with his wife & son. tackled by real estate in-mies.to information, I Survived Real Estate dustry experts on the eve- The panel werehas been instrumental in spotlighting the ning of September 17. putting together can crucial role investors have in our nationsThe Norris Group,speak about these issues economic infrastructure. headed by Bruce Norris, from several differ-Norris explains: This event gives a a 30-year veteran known ent point of views and chance for investors to be seen in a different among investors as thehopefully provide us light. We all know investors are often seen Nostradamus of Cali-with some newas the sharks fornia real estate, is once insights mov- Tommy Williams of the real estate again organizing their an-ing forward,i n d u s t r y. We nual philanthropic event in Norris explains. take this night Orange County.Some returning to show otherThis black-tie affairguests, include: sectors that we, is one of the most fash-Joseph Magdz-as investors, ionable tickets in town,iarz, 2011 presi-play a signifi- mixing charity, important dent for the Ap- cant role in the trend updates, education, praisal Institute; solution side of entertainment and industry networking. It Tommy Williams, 2008 president ofthe market. is always a sold-out gala, one that attracts the National Auctioneers Association; andNorris knows firsthand that real estate the Whos Who of real estate. Christopher Thornberg, principal of Bea- investors take great risks in a volatile mar-When we attended last year, it was fasci- con Economics.ketplace. With greater acceptance, their nating to note that besides all the tuxedos,New guests are also being added. We ideas have a better chance at being heard satin dresses and crme brules on fine chi- are very excited to have Sean OToole and being implemented, he says. na, some serious industry trends and alter- from Foreclosure Radar joining the panelThe charity event was designed to give native solutions were pre-this year to add his everyone, regardless of personal income,Guests at the last years event. sented in just a few hours. data-driven and in-an opportunity to participate.It was an evening of edu-vestor-minded per-By joining our walk team and raising cation with a sophisticated,spective. the money in their networks, attendees entertaining twist, much likeFor Norris, the Iand sponsors can technically come free of the man behind the event. Survived Real Es-charge, Norris explains.The theme for I Sur- tate series is per-Sponsorship opportunities are also vived Real Estate 2010 sonal. This night is a available. Benefits for advertisers include will again focus on trends, way of honoring hisinclusion in all mailers to local, state and solutions and have an added wife, his family, hisnational government officials, SEO op- focus on the state of REOs, Norris says. community and profession.timized website advertising, inclusion in With constantly changing governmentIn the last two years, the fundraiser hasmailers and flyers, plus event program regulations, its been difficult for anyone in raised over $100,000 for the Susan G. and screen exposure. Each sponsor is also the real estate business to build a sustain- Komen Foundation; these funds are usedmentioned in video and radio segments that able business model. for breast cancer research.air before and after the event.Norris, a 30-year veteran investor (from My wife, Marsha, was diagnosed with For more information, please visit online: rehabber to private lender) is a champion breast cancer more than 15 years ago. This www.ISurvived2010.comRealty411Guide.com PAGE 35 2010reWEALTHmag.com 29. ALL ABOARD! for The Ultimate Cash Flow Buying TourThe Clothier family, from left to right: Chris, Brett, Kent and Kent Sr. M ainstream reporters who present real estate as doom and gloom surely havent been to Mem- phis. The city, known as the birthplace of rock n roll and the blues, is bustling with industry activity and visitors arent just touring Graceland and Beale Street, theyre leaving as bona fide landlords. MemphisInvest.com & FortuneBuilders Our editorial team was invited to attend The Ultimate Cash Flowing Buying Tour Unite Investors from 18 States & 2 Countries by MemphisInvest.com, a boutique, Mem- phis-based brokerage catering to out-of-and Sell 29 Rental Homes in 2 Days! state investors. by Linda Pliagas The company, which serves more than 200 clients and manages more than 650 in- outstanding views and plump pillows. In-where we have our own personal invest- vestment properties for them, joined forces vestors traveled from 18 states to attend,ments, Chris says. The Clothiers person- with the San Diego-based FortuneBuild-one couple arrived from Canada. ally own more than 100 rental homes in a ers, Inc., (owned by Than Merrill and the Most of the attendees were investorshandful of quality, long-term buy-and-hold Flip This House team) andwanting to learn how to be-areas of Memphis. together they organize one ofcome MemphisInvest.com Typical home prices range from $34,000 the largest property buyingclients. Many were referrals to $85,000, rents average out be $850 per events in the nation.from their existing client month. The city boasts high rents and low Youll never see anything base, and some were repeat prices. But surprisingly, 48% of Memphis quite like this, promised customers. residents rent. Kent Clothier Sr. during our Our average client buys The Clothier family, who were formerly telephone conversation a few four homes and refers us toin the grocery business, moved to Tennes- months ago. Kent Sr. is found- all of their friends and fam-see because they saw such an opportunity er of MemphisInvest.com. Heily, says Chris Clothier, for long-term real estate investing and takes the helm of the 18-team- director of sales and market-monthly cash flow. member operation, which is ing. At the time, Kent Sr., Kent and Chris managed by his three sons, MemphisInvest.com pro- were scattered about, working in different Kent, Chris and Brett.vides clients with an option of either buy- real estate markets (Texas, Colorado and In my six years as an out-of-state inves- ing a turn-key rental home or one that needsFlorida). Memphis real estate brought the tor, I had never attended a property buy- rehab. The company oversees the work forfamily together. Its an additional perk for ing tour. Plus, I repeatedly heard aboutthe investors. Each property has a separate proud papa Clothier. Im the luckiest man the benefits of the Memphis market from quote for the renovation included in its pro- in the world to have my sons working next many sources. I thought, What a perfectforma profile. If the rehab goes over bud-to me, Kent Sr. told the crowd that day. time to put on my reporters cap and go get get, it comes out of the companys pocket.On the first day of the tour, the investors the scoop. MemphisInvest.com caters to investors gathered to get educated on the local mar- The Ultimate Cash Flow Buying Tour def- who are looking to buy in typical middle- ket, meet the Clothier family, and mingle initel