Realty411 vol3no2

Tips for Long-DistanceLANDLORDING

Turn-Key RentalsAround the NationCash Flow from theComfort of HomeMathew Owens, CPA, owner of OCG PROPERTIESBuys & Rehabs Rentals in Tennessee from Redondo Beach

Get the Deals DONELearn Creative RealEstate Techniquesfrom Dave Lindahl, Dolf de Roos,Bruce Norris, Bill Gatten & more!

Celebrating the Largest Issue with More Pages & Opportunities than Ever!

photo by Sam Green

Tips for Long-DistanceLANDLORDINGLANDLORDING

RealtyRealtyRealtyRealtyRealtyRealty411411411411411411Realty411RealtyRealtyRealty411Realty411Realty411RealtyRealtyRealty411Realty www.realty411guide.com | Vol. 3 • No. 2 • 2010 A Resource Guide for Investors

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<< Table of Contents >>7 Secrets from the Master! Dave Lindahl shares his latest tips for Investing Success9 No Drama in DaytonTriple Net Houses Helps Investors Profit without Issues11 California Living with Tennessee Cash Flow Mathew Owens, CPA, owner of OCG Properties, explains why he loves to invest out of state14 Beware of the Investment Vampires by RBS Homes16 Dolf & Carter: A Master-mind with Arizona Investors19 Enjoy a Tropical Paradise with Phenomenal Returns

In search of their latest gem in Nicaragua, Maverick Investor Group traveled the world22 Investor Nation Shares their Blue-Chip Real Estate Strategy25 G inger Mac ia ’s Three FREE Ways to find a Great Wholesale Deal 27 Creative Real Es-tate Techniques with Educator Bill Gatten28 Matt Malouf’s 10 Weeks to Massive, Passive Cash Flow30 A Visit with Sensei at his 12 Rounds Club35 Bruce Norris discusses the “I Survived Real Estate 2010”

Charity Walk and Gala37 Join the Ultimate Bus Tour with MemphisInvest.com39 Creative Financing Options with MMG Capital, LLC40 Philbin Capital Discovers Deals in the Golden State42 The Key to Success by Club Founder Sam Sadat

45 Buy Bigger and Better Deals by Kathy Fettke46 Alternative Economics™ Club Debuts in California51 Stop the Gambling! Mike Woo, a “Rich Dad, Poor Dad” protégé, advises clients52 Is Your Mortgage Underwa-ter? Perhaps a Short Pay Refi-nance is the Answer55 Pay Off Your Rental House in Five Years with the Short Term Retirement Program

57 Who’s On Your Team? Insights by 360 Investments

photo: Sam Green

Bruce Norris President

The Norris Group

Tommy Williams 2008 President

National Auctioneers Association

Sean O’Toole President

Foreclosure Radar

Joseph Magdziarz Vice President

Appraisal Institute

The Norris Group’s award-winning event returns September 17, 2010 to the Nixon Library in Yorba Linda, California. We’re assembling an incredible line up of accomplished industry specialists to discuss the state of the REO market, on-going industry regulations, and the opportunities emerging for real estate professionals.

New guidelines a�ect every sector of our industry. In a climate ripe for both miscalculation and pro�table advances, how are our colleagues and partners navigating an industry in continued transition? Our Who’s Who Round Table Includes:

Last 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.

A Powerhouse Lineup of Top Industry Experts Presents the Insider’s Edge on The State of REO 2010

www.ISurvived2010.com or 951-780-5856

Platinum Partners

Christopher Thornberg Principal

Beacon Economics

Sarah Letts Director, Credit Loss Mgmt

Fannie Mae

Daniel Phelan Mortgage Bankers

Association

Peter Wayman Sr. REO Director

Freddie MacMVT PRODUCTIONS

Sponsor-Flyer-411.indd 1 7/23/2010 9:29:33 AM

We can’t 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 event

2. 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)

AdvertisingLogo on Event Website featured

SEO-Optimized Pro�le

Logo on Flyers Name only

Digital Signage at Event featured

Preferred Seating featured

Event Program Ad 1/3 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 eligible for advertising. July 10th is the deadline for all money to be in place to ensure radio spots include the

selected sponsor. There may be more than 15 radio shows that are aired for the run of event.

Winner of seven communication, outreach, and fundraising awards.

SPONSORSHIP OPPORTUNITIES

Gold SponsorsBenton GroupDelmae PropertiesElite AuctionsEntrustInland Empire Investors ForumKeystone CPALas Brisas EscrowLeivas Financial ServicesNorth San Diego Real Estate

Investors Association (NSDREI)Personal Real Estate Investor MagazineMike CantuRealty 411 MagazineRick & LeeAnne RossiterStarz PhotographyTony Alvarez – theREOmentor.comWestin South Coast Plaza

Sponsor-Flyer-411.indd 2 7/23/2010 9:29:43 AM

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What You Need to SucceedFirst and foremost, to succeed as a real

estate investor you must be motivated. This business isn’t for the undecided. You have to want it bad enough to take action. Be-cause where there’s a strong will, there’s wealth.

I was 100% determined to own real es-tate. I didn’t let the fact that I had a less than $800 in the bank stop me from buying my fi rst property, a three-unit building in my hometown.

Sure, I was nervous doing that fi rst deal. I had no direct experience. No track record. No personal wealth to use for collateral. But I didn’t let any of that stop me.

This is why I tell beginners everywhere that they can own real estate right now. I don’t care if you’re broke like I was. If you’re motivated to succeed, real estate — and all the personal wealth it can generate — can be yours once you know how to fi nd properties and structure the deal.

How I Found My First BuildingI bought books and tapes on real estate,

even though I didn’t fi nd much on apart-ments. I went to local investment clubs, networked with experienced investors, and started “bird-dogging” for them (fi nding

Don’t You have better things

to do than deal with tenants and toilets?

FOUNDER & EDITORLinda Pliagas

[email protected] STAFF

Lori PeeblesMatt Malouf

Carla FischerGinger Macias

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Realty411 and Real Estate Wealth magazines are published in Los Angeles by Manifest Media Partners (mailing address: 4221 Neo-sho Ave., Los Angeles, CA 90066). Publishers are not responsible for unsolicited manuscripts, photographs and/or other materials. ©Copyright 2010. All Rights Reserved. Reproduction without per-mission is strictly prohibited. The opinions expressed by writers are not endorsed by the publishers and/or editorial staff. Before investing in real estate, seek the advisement of a trusted fi nancial adviser, attorney or tax consultant. Please invest responsibly.PRINTED IN THE USA. GOD BLESS AMERICA Connect to our network @

As a successful real estate inves-tor and top-selling author, I’m on the road a lot presenting workshops across the county.

I often start with a bit of personal history because when you’re a multimillionaire like I am, people assume you were either born rich or had a wealthy mentor show you the inside track to making money.

That’s not my story. Not by a long shot.Fifteen years ago, I was running my own small landscaping business in New Eng-land. I was a guy with a pickup truck and lawn mower. If you haven’t experienced a New England winter, let me simply say it

means I was literally frozen out of work for a good part of the year.

I spent winters doing odd jobs to scrape by. A friend asked if I wanted to repair a property that needed some TLC so it could be resold fast.

The owner was looking for a quick fi x and fl ip, and thus I was indoctrinated in the business of fl ipping properties before it be-came a national pastime and the subject of cable TV shows. But what attracted me to real estate was not the quick turn. It was the steady cash fl ow.

The idea of checks from renters fi lling my mailbox month after month, regardless of the weather, really appealed to me.

I wanted other people to pay my mort-gages, creating huge equity in my build-ings. I wanted to sit back and watch my buildings appreciate, making me wealthier and wealthier.

I wanted to live off the positive cash fl ow that I received each month, so I wouldn’t have to go to a job every day. No more dai-ly grind. No more living paycheck to pay-check. Best of all, I liked that “millionaire” was the likely outcome if I did it right.

Back then there was nobody teaching how to buy rental properties. The gurus fo-cused on single family houses, just as they do today. So I had a big learning curve.

by Dave Lindahl

Continued on pg. 60

WealthReal Estate

published for Investors by Investors

&

Realty411Guide.com PAGE 7 • 2010 reWEALTHmag.com

Who Else Wants Up to $5,000…$10,000 or More Extra Monthly Cash Flow?

there. When we rehab a property we pretty much do everything so we know it’s going to be a maintenance-free property. When we fi nish, it’s almost like a new house.”

The company’s record is impressive. “In the year 2009, we collected 97.4 percent of our scheduled rent,” Julian proudly states. “It even amazes me!”

In Dayton, market rents range from $595 to $950. The company rents with a one year lease agreement. A typical scenario

is this: A tenant occupies a three bedroom, one bath home, 1,100 square feet, with a one car garage, for $700 a month. Many homes are brick with full basements, some are ranch houses built in the late ’50s.

Dayton is home to the largest single site employer in the state of Ohio: Wright Patterson Air Force Base with 26,000 em-ployees. The city also has two universities: Wright State University with an enroll-ment of about 18,000, including a medical school. Next is the University of Dayton, which enrolls over 10,000 students and also offers a law school program.

As far as the fi nancials, a Triple Net in-vestor can realize up to 17% return on each house.

“If the investor pays cash then they will receive 9.1%.” Julian explains fur-ther: “For example, if they have a $60,000 house the investor will be receiving $5,460 a year, which is 9.1% of the purchase price.

Do you have reservations about becoming a landlord? Triple Net Houses created a program to help investors profi t from rental properties without ever having to deal with tenants!

invest without drama

If an investor buys a Triple Net House, they know exactly what their cash fl ow is going to be for the next 10 years. They never have to deal

with tenants and never have to deal with or pay for maintenance.

In 1903 The Wright Brothers made history in Dayton, Ohio, with their fi rst power airplane fl ight.

One hundred four years later, Peter Julian, CEO of Triple Net Houses, refl ects on their short three-year revolution-ary history that began in 2007 as a premiere provider of real estate manage-ment. “We’ve reinvented the way people invest in residential rental real estate,” Ju-lian says proudly. He then adds: “It’s kinda

overcast. We’re going to get some rain later on, which doesn’t mean a thing for our in-vestors who are from all over the country. The weather rarely has anything to do with our business, unlike the Wright Brothers.”

Julian shifts to business quickly explain-ing how he created a NNN (triple net) in-vesting model, which is traditionally only found in commercial real estate transac-tions.

“I’ve been a real estate broker for a little over 30 years. I’ve worked with investors my entire career. When I talk to them, most like all the good things about real estate, like the cash fl ow, the tax write-offs, build-ing-up equity, and potential appreciation. But when potential investors get to talking about managing, they’ve all heard the hor-ror stories about tenants, maintenance and all those kinds of things.”

So Julian and his team came up with a unique solution. It’s basic and simple, even though it tackles a complicated con-cept. The Triple Net Houses program

(www.triplenethouses.com) takes all the un-knowns off the table. By purchasing a Triple Net rental, investors will know exactly what their cash fl ow is going to be for the next ten years.

Julian explains: “When we lease the house it’s a

triple net lease, which means we pay taxes, insurance and maintenance. Basically we pay all the operating expenses, so there’s nothing our clients have to pay. We man-

age the property so there’s no management. Investors will never have to deal with a ten-ant and never have to deal with or pay for maintenance,” Julian explains.

The company offers a 10-year NNN (triple net) lease. If investors want to ter-minate early, all they have to do is provide a 60-day written notice. There is no penalty and the investor still owns the property.

“It’s a turn-key investment. It pays a high yield and we’re able to buy houses at low cost and rehab them economically. We then pass that deal on to an investor, as a totally turn-key investment. Their total in-volvement after the investment is to collect a payment from us each month, which is electronically deposited into their checking account. It’s a perfect storm.”

When asked how Triple Net Houses can provide guaranteed returns for investors, regardless of what is going on with their property, Julian replies: “We’re very care-ful in selecting properties in neighborhoods where we know the rents are going to be

by Carla Fischer

Continued on pg. 47

Peter Julian


CaliforniaInvestors

Specializing in the Memphis

Market!

California LifeTennessee Rentals

Last year, while working as a pan-elist at a local real estate invest-ment club in Los Angeles, I had the pleasure of meeting Mathew

Owens, a certifi ed public accountant and owner of OCG Properties. I was so im-pressed by his experience and work ethic that I invited him to partner with me on syndicating real estate projects.

Having worked closely with him for al-most six months now, I can say that he’s the real deal and you’ll be in for a treat if you get the chance to work with him. Mathew has many strengths that make him a great partner: integrity, organizational skills, and real estate and investment profi ciency. Plus, he’s very likable.

I have met a lot of people in this business, and I expect great things from him in the coming years.

I recently sat down with him to ask about his real estate investing strategies and the current projects he’s working on out in Ten-nessee. Mathew has purchased, renovated, and sold or held more than 100 investment properties in the last three years alone.

Below is a partial transcript of the inter-view I had with him.

Ginger: Mathew, in your own words, what exactly does OCG Properties do?Mathew: In a nutshell, we help people in-vest in real estate. At OCG, we sit down and go over our client’s fi nancial situation and resources to help them fi nd the best ways to invest and meet their individual goals. With good in-house management in place, you can hold for long-term growth and re-ally get a great return on your money. On top of that, the price points are low enough that you can buy with cash and not even have to deal with fi nancing. Talk about low risk!

We help our clients achieve great returns on their money while doing all of the due diligence on every investment. We bring a ton of real estate experience to the table and help our investors every step of the way.

Ginger: What did you do before you became a full-time real estate investor? What is your background?Mathew: Let’s see, I grew up in the tiny town of Los Angeles and graduated from the University of California, Santa Bar-bara, with a degree in economics and an emphasis in accounting. Afterwards, I was able to achieve one of the accomplishments I am most proud of, passing all four parts of the CPA exam in one sitting, a feat only 10% of candidates have been able to do.

After passing the exam, I worked as a CPA, auditor and business adviser, help-ing my corporate and individual clients increase their bottom line, helping them fi nd fraud risk factors inside their business systems and auditing their accounting re-cords.

I guess that is why I am so good at do-ing due diligence on real estate transactions now. The accounting and due diligence skills are a perfect match for a real estate investor, I just had to adjust my personality to be more outgoing and personable, which most CPAs are not known to be. Being in the real estate industry as a full-time inves-tor, I am fi nding it is rare to fi nd a CPA who understands the tax and legal implications of investing and the real estate investment side in detail.

Ginger: So tell us, how did you get your start in real estate?Mathew: I started investing about fi ve years before I decided to take some real estate education courses and quit my cor-porate job cold turkey. I found that the skill sets I gained from working at CPA fi rms were hugely valuable, and I still hold the partners of those fi rms with the upmost respect for what they taught me, the eth-ics they instilled in me and the guidance they gave me. However, the skills that I have developed running my own company are unparalleled to anything I would have ever expected. While working for myself, I started fl ipping and holding properties >

by Ginger Macias | photography by Sam Green


to go out and develop a team in every mar-ket, which is exactly what we did out in Memphis. We have in-house management and a team on the ground there that helps

us get all of the information we need to be suc-cessful.

Ginger: What team members should one have when investing out of state?Mathew: There are a number of team members you need in order to be a success-ful real estate investor. At the top of the list for any buy-and- hold investor is a great, and I mean GREAT, prop-e r t y m a n a g e r. Proper ty man-

agement is the number one reason an in-vestment property will fail to produce posi-tive cash fl ow, assuming you did your numbers correctly and did not buy in a ghetto. In addition, an investor needs lend-ers, REALTORS®, inspectors, appraisers, attorneys, CPAs, IT consultants, marketing agents and the whole nine yards to really develop a good system. Each team member is crucial to your success, and that is why investing in real estate can be so diffi cult at times.

Your team can make or break you, and you need to have reliable team members that 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 and your investment success. We also take an ethical and conservative approach to in-vesting and do all of the right due diligence on every investment.

We really care for our clients and care about their goals and what their interests are. We have a guaranteed tenant and reno-vation on every property, and put the proper

that the current reported unemployment rate is 12.8%, there is a $19.9 billion dollar gap in the California budget, the California mortgage delinquency is up almost 100% year on year, 90% of the Alt-A and Option ARM loans coming due are underwater in California, 1/3 of Op-tion ARM loans are delinquent already, the California tax rate rose from 9.3% in 2008 to 9.55% in 2009, and it will rise again to cover the gap in the budget.

On top of all that, people who are under-water in their homes and not in fi nancial hardship are starting to walk away because it does not make fi nan-cial sense to hold them and hope they go up $200,000!

Ginger: I’m an out-of-state investor too but other investors may be skeptical about owning property so far away.

Mathew: They are really missing out! Ginger, we both know that with technolog-ical advances you can invest anywhere in the world now, and it’s as if you’re invest-ing in your own backyard.

The reality is, everyone has the resources

in Memphis. I got through my initial learn-ing curve and kept striving for more deals with a magnifi cent obsession for real estate that only few can really understand. It was tough, but after getting through the strug-gles, you fi nd yourself breaking through and fi nally achieving success. Working that much taught me multiple things. But one thing stuck more than anything else: Pas-sive income is the goal!

Ginger: You live in Southern California and invest in Memphis, Tennessee. Why do you invest so far away from where you live?Mathew: That is right, I live in sunny Redondo Beach and invest in Memphis. Most of the investors I meet ask me this exact question, and the simple answer is: I invest with logic and statistics, not based on what my emotions are telling me.

Look at the economics in the Memphis market. It has one of the highest price-to- rent ratios in the nation! It did not take a huge dip like a lot of markets, it had an av-erage annual appreciation of 4% per year over the past 20 years. It’s a very stable market. The population is also expected to increase and you can pick up property that not only cash fl ows but gives you apprecia-tion potential in the next 10 years, which is

not something I can say about California. California is a huge risk right now for buy- and-hold investments.

If you take a look at some of the econom-ic indicators in the California real estate market, some of the things you will fi nd are

Mathew Owens, his brother and little sister.

A sample OCG Property.


structuring and risk miti-gation procedures in place on every investment. We also set up proper com-munication procedures for our management com-pany to keep our investors frequently updated on the progress of their invest-ment.

Ginger: What due dili-gence is done on your investments?Mathew: Wow, where do I begin? I will give you the quick version. To start off, we do a complete neighborhood analysis on every property along with a market value analysis, which includes pulling comparable sales and get-ting an appraisal done before we close es-

crow. We also do a rental analysis, cash fl ow analysis, profi t analysis, renovation analysis and every kind of analysis a CPA can think of to protect ourselves and our investors.

In addition, we get an inspection by a qualifi ed inspector and compare it to the renovation bid. Each renovation bid comes with an item-by-item, room-by-room breakdown of the renovation costs, includ-ing materials and labor. This is extremely important so you know what your costs are going to be on future renovations. When leasing a property, it is important to get a qualifi ed tenant. If you do not, you will be sorry later when you have to evict them because they cannot afford the rent. We qualify them similar to a home loan pro-cess. We look at their debt-to-income ratio and credit. We do a background check and really get a good assessment of their per-sonality, which can tell you a lot.

Ginger: What tips can you give to people who want to get started investing in real estate?

Mathew: Do not give up, no matter what. Any business, any new venture or opportu-nity that you want to achieve, is 90% men-tal and 10% skill. If you never give up, you can never lose. It’s best said in the book

“Think and Grow Rich” by Napoleon Hill: “Before success comes in anyone’s life, one is sure to meet with much temporary defeat, and, perhaps, some failure. When defeat overtakes someone, the easiest and most logical thing to do is to QUIT. That is

exactly what the majority of men do.” If you never quit, you will succeed no

matter what adversity you face.Ginger: What is the fi rst step someone needs to take to invest with you?Mathew: They need to call us and sched-ule a consultation. We look at each inves-tor’s resources, fi nancial situation and in-vestment goals to make sure we help them invest the right way and surpass their indi-vidual investment goals. Once an investor schedules a consultation with us, we move them from sitting on the sidelines to devel-oping a passive income stream to retire on — as fast and safely as possible.

Ginger: Do you have anything else you would like to share with our readers?Mathew: Yes, thank you. I would just like to add that some people will make up ev-ery excuse in the book for why they do not or cannot do something. I am here to tell

you that you can do ANYTHING if you focus and take ACTION steps towards its achievement.

Do not let your emotions tell you it can-not be done, even if you were not initially successful. Even if it is diffi cult to see how you are going to accomplish it, don’t give up. There is always a way, but it comes down to taking action. Most people give up at the mere thought of diffi culty, and your success in real estate, and in life, are going to be based on your ability to focus and take action.

Also, a successful investor has to be completely dedicated. They must ignore all of the people who have an opinion but are less- educated about the subject.

Ginger: Thanks, Mathew. I wish you continued success in your investments.Mathew: You’re welcome, Ginger.

For more information, please visit: www.ocgproperties.com or email:[email protected] | OCG Properties can also be reached at: (424) 757-4680

“With technological advances you can invest anywhere in the world now, and it’s as

if you’re investing in your own backyard.”

Photograph of Mathew Owens by Sam Green


WealthWealthReal Estate

Serving the Needs of Accredited Investors - INSIDE: Information to Grow and Maintain Your Wealth

A Special Edition from

the Publishers of Realty411

Vol. 1 • No. 1 • 2010

Words of Wisdom fromMasters of Real Estate16 19 Maverick Investor Group

Reveals the Next BIG Thing 35 Bruce Norris Prepares for Annual“I Survived Real Estate” Charity

The ten years ahead of us will be extremely diffi cult for investors. Yield and growth will be scarce, but much worse will be the four

vampires waiting to suck the life out of almost every investment you consider. In this article, we will meet each vampire in-dividually, understand how they drain your investments dry and learn about some “in-vesting garlic” that can keep them away.

Infl ation: the First Investment Vampire.If you remember President Gerald Ford then you may remember his “Whip Infl a-tion Now” campaign, created to fi ght infl a-tion climbing over 10%. Eventually infl ation reached over 14% annually in 1980, usher-ing in years of stagfl a-tion—high infl ation combined with high unemployment. In only fi ve years the value of invest-ments dropped by 50% and the dollar lost almost 75% of its purchasing power during that decade. This year, with unem-ployment and underem-ployment already approaching 25%, the nation is poised to see a replay of those diffi cult years.

To estimate the curve of infl ation in this new decade, we need a basic understand-ing of the causes of infl ation. Noble Prize winning economist Milton Friedman said it best, “Infl ation is always and everywhere a monetary phenomenon.” In other words, when the Federal Reserve prints more money than the economy can absorb, the economy catches a bad case of infl ation in the next 12-24 months.

The money supply exploded in 2009. It doubled in the space of a few months and then grew another 50% in the next year.

Since the economy has not grown by 150% in the past two years, all this money is waiting in bank vaults to drive signifi -

cant infl ation soon. Experts argue that de-fl ation is the bigger risk. While that may be true, it does not make infl ation any less destructive when it starts nibbling at your investments.

Garlic to Protect Your investments from the Infl ation Vampire

To protect against the corrosive power of infl ation, you need investing vehicles with three specifi c features:

•Asset value that tracks infl ation.•Asset income that tracks infl ation.•Asset that has considerable leverage.It’s no surprise that investment real es-

tate has all three of these critical features. In general real estate values track

infl ation. That is, their value remains constant or appre-

ciates even as the value of each dollar declines. Likewise, the income—rent—from investment property tends to track infl ation. And fi nally, you can leverage your

investment asset.

But Not Just Any Real Estate!In truth, most real estate does

not deliver these three critical fea-tures. The past few years, have seen crush-ing drops in the price of condos in Miami, almost any property in Detroit, suburban tract homes in Phoenix, plus offi ce tow-ers and shopping malls across the country. Buying investment property takes effort, considerable research and a team of ex-perts working to assist you. With the right guidance and team in place, an investor will never have to worry about those evil investment vampires.

Richard Barrett is CEO of RBS Homes (www.RBSHomes.com). With offices based in California and Texas, RBS Homes provide investment properties with these three critical factors in place.

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Dolf de Roos Carter Froelich

Carter: Hello, Dolf. Tell us about what you’ve been doing lately and give inves-tors your perspective on the market.Dolf: Well, Carter, although the media re-peatedly states this is the worst real estate market we have seen in decades, it is only

the worst market if you are in the unfortu-nate position of being forced to sell. If you are in the fortunate position of being able to buy, then by definition, this is the best market we have seen in decades.

With that said, there are still many who have trepidation about entering our current real estate market. This has forced me to go overseas. There are many countries right now experiencing the peak we saw a few years ago so they see the relative merits of bringing their money to the United States and investing here.

Carter: Why did you become interested in The Property Ledger?

Dolf: I like being on the cutting edge of what is available. I have always done well with new technology. When fax machines came out, it saved us thousands of dollars a year in courier fees.

Now, we don’t fax; scanned attachments

are better quality, in full color and don’t require an outdated phone system to get through to a recipient.

When I come across people in the real es-tate industry who do not use email, and in-sist on using faxes exclusively, I think they must miss out on deals because of their aversion to new technology. I do not want to fall into that trap. The Property Ledger is cutting edge, extraordinarily useful and easy to use. Why would you not use it?

Carter: What benefits are provided by The Property Ledger, which other prod-ucts do not provide?Dolf: With the information stored in the

cloud, you can access your portfolio’s de-tails from any computer connected to the Web. Before long, most services will have that feature, but by then The Property Led-ger will have innovated yet another area. Surfing is so much easier one foot ahead of the wave than one foot behind.

Furthermore, having all the details of a property, including title documents, HUD1s, leases, management agreements, and the like, stored in one central reposi-tory is simply a great way to run your prop-erty investment business. Once you have experienced it, it is difficult to revert back. It would be like going back to using slide-rules, or for those readers not old enough to remember what they are, the curly-paged and faded fax machine — if they even re-member that!

Carter: Since you travel often, are the features of Electronic Library useful? Dolf: Absolutely. In fact, more and more companies are trending towards cloud computing. Clearly, it is convenient to be able to access all the relevant data on a property from anywhere and not have to be concerned with taking up space on your own computer, keeping data in sync, having the data concerned fall into strange hands in the event of a computer loss, in-

Dolf&CarterTips from AZ

give readers the latest

“... with the information stored in the cloud, you can access your portfolio’s details from

any computer connected to the Web.”

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 same circles. Carter Froelich, an author, investor and

CEO of The Property Ledger, recalls the time he met best-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 Property 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 Arizona’s top real estate investing giants. —The Editor

Interview by Carter Froelich, CEO of The Property Ledger


stalling upgrades, etc. It is all done for the end user.

Carter: Why is it important for investors to monitor the fi nancial performance of their real estate portfolio? Dolf: Interestingly, it is important for inves-tors in stocks and commodities to maintain a vigilant eye on their volatile investments so that they can jump ship if the ship starts to sink. With real estate being a much more stable investment, much of the interest in monitoring your portfolio is just that: inter-est. However, if you want to know when you can invest in yet another property, based on cash-reserve build-up, equity po-sition, available collateral, etc.), then you want to have the up-to-date information available instantly. The Property Ledger provides just that when you need it.

Carter: How often should an investor track the fi nancial performance of their real estate portfolio? Dolf: As often as they feel comfortable. One of the advantages of real estate invest-ing that I often tout is that unlike the stock market, where you have to monitor your

investments regularly, with real estate, you can buy a property and put the title in a bot-tom drawer, take a six-month cruise, and not worry if you should sell the property again. However, it is comforting to be able to put your fi nger on the pulse of how your investments are performing.

Carter: What is your favorite fi nancial calculation when analyzing your proper-ties? And why? Here are the choices:•Gross Rent Multiplier •Cash-on-Cash Return on Investment •After Tax Cash-on-Cash Return •Internal Rate of Return•Return on Equity Dolf: I like to analyze based on cash-on-cash return. This calculation shows you how the cash you are putting up is perform-ing. It is the prime indicator of how you can truly leverage your money. What other investment allows you to get a $100,000 asset for only $10,000 or $20,000 in cash?

For most investors, you can’t buy $100,000 worth of stock or gold or oil without coming up with the entire pur-chase price in full. When you put up all the money to buy an investment, the return is

simply the income divided by the invest-ment. With real estate, since you only need to come up with a small portion of the pur-chase price in cash, the cash-on-cash return becomes very important and, dare I say it, interesting. It is an advantage inherent in real estate investing that is often over-looked by fi nancial advisors.

Carter: What type of investment do you favor right now and why? Dolf: When it comes to residential property, I prefer the single-family home. However, for the last two decades, I have personally focused on commercial real estate. That doesn’t mean I haven’t invested in other sectors but the benefi ts of commercial real estate for the property owner are incred-ible. Here are just a few of the benefi ts:1. The leases tend to be much longer — anything from three to twenty years. They are generally secured by the business, with the owners offering a personal guarantee. 2. Commercial tenants tend to maintain the property better as the look and condition of the property is important to their business.

Continued on next page

Maverick Investor Group Scours the Globe for the Best Investment Properties

Dolf & Carter, pg. 17

Tenants often improve and up-grade the space with their own money.3. With residential property, the landlord tends to pay the outgo-ings such as property taxes, in-surance and maintenance. With commercial real estate, the ten-ants who are leasing the prop-erty, pay for those expenses.

Carter: We’re both located in Arizona; let’s discuss the local market. Where is it heading? Dolf: I’m optimistic. There was an article in the paper just three days ago stating Taylor Morri-son Homes will begin construc-tion in July of a master-planned community in Gilbert. There will be 17 phases developed over the next 12 years accord-ing to the report submitted to

the Gilbert Planning Commis-sion. This is indicative of the long term. In the short term, things look pretty grim, again, if you are forced to sell. There is word on the street that there will not be a u-turn for years. Things go in cycles. When you get old enough to have experienced a few cycles, you learn to embrace them rather than fear them. There will be a turnaround. If you can buy real estate that cash fl ows now and have a great chance that long term the capital value will go up immensely, why would you not acquire some real estate?Learn more online about The Property Ledger, visit: www.thepropertyledger.com To reach Dr. Dolf de Roos, visit: www.dolfderoos.com

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Maverick Investor Group Scours the Globe for the Best Investment Properties

Next Destination: The Hidden Tropical Paradise of...Nicaragua

Interview by Linda Pliagas

With a name like Maverick, one immediately 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 offi ce 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 fi ve-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: “To

radically improve people’s lives through real estate.”

And their radical approach to real estate is working. Even during 2009, in a single 90-day period, the company was able to

close as many as 34 transactions and pay out nearly a quarter of a million dollars in buyer referral fees to real estate brokers in the Maverick Referral Network.

Maverick’s business model, including

the international component, is just a con-tinuation of the global lifestyle enjoyed by its principals. The company was founded by Mark Solak, Valerie Schrock and Mat-thew Bowles — real estate investors >

Mark Solak Valerie Schrock Matt Bowles


and licensed real estate professionals with formal, advanced degrees. Prior to joining forces, they led cosmopolitan lives, trav-eled the world and lived in foreign coun-tries for extended periods of time.

Recently, I caught up with the Maverick power trio to discuss their latest turn-key buying opportunity—the Seaside Mariana Spa & Golf Resort on the Pacifi c coast of Nicaragua.

Q: How did the three of you become busi-ness partners? Tell us a bit about how Maverick Investor Group formed?MB: Well, Valerie and I met in graduate school in 1999. We both got master’s de-grees in International Peace and Confl ict Resolution and then worked in human rights advocacy in Washington, D.C., for several years. We started investing in real estate on the side, reading books about it and learning by experience. Soon we had millions of dollars in real estate holdings in states all over the country.

I met Mark in 2005 when he sold me over $2 million worth of investment properties in Las Vegas. I was blown away by his customer service; it was the best I had ever seen in any industry. These were two of the most talented, ambitious, honest and trust-

worthy people I had ever met, all essential qualities for business partners. The three of us began pooling our skills, resources and creative energies to develop a cutting edge business model that could provide unparal-leled advantages to real estate investors and real estate agents. In 2007, it was ready to be launched so we all quit our jobs, fl ew to Las Vegas and, while overlooking the Strip from a rooftop lounge, raised our glasses

and announced to the world that Maverick Investor Group was born!

Q: The Maverick partners live in differ-ent states — Matt is in Los Angeles, Valer-ie is in Washington D.C., and Mark lives between Chicago and Las Vegas. That is pretty incredible! How did you decide to structure your company like that and how does it affect your business? VS: We were intentional about structuring the company that way from day one, and the primary reason is “freedom of mobili-ty” for the Maverick partners. It’s all about lifestyle. We can live wherever we want and travel whenever we want for as long as we want, and no business falls through the cracks because of the systems and pro-cesses we have set up and the technology

we use. It was crucial for everyone to start with the vision of their own ideal lifestyle.

Matt likes to work from his rooftop pool deck in LA, Mark likes to spend extended time in Europe each year, and I like to go skiing in Canada and spend part of the year in Phoenix with my parents. So we struc-tured our real estate business to facilitate our dream lifestyles. But, more than that, Maverick has built an entire community

of real estate investors and agents who are focused on using real estate as a vehicle for designing their dream lifestyles. We show our clients how to do what we do. You will notice that we have a section on our website that discusses “real estate life-style design” in great detail, down to the specifi c technology products we use. Real estate investing is only a means to an end…it’s always important to keep your eyes on the larger prize. Money isn’t very useful if you have lost touch with your dreams. How can real estate enable you to recapture your time, design your dream lifestyle and make enough money to fi nance it? That’s the big picture.

Q: Maverick has always encouraged out-of-state investing, why are you now

Seaside Mariana Spa & Golf Resort features the fi rst Jack Nicklaus Signature Golf Course in Nicaragua.


up the coast is Nicaragua. It borders Costa Rica and has the same weather, the same beaches, the same sunsets, but a much lower cost of living and, at the moment, much lower property prices. Seaside Mari-ana will be Nicaragua’s first luxury resort with a five-star international brand hotel and a Jack Nicklaus signature golf course. We are talking about a 923-acre resort on 2 kilometers of pristine beach front. Noth-ing like it currently exists in Nicaragua. This project will single-handedly take the country to the next level as a tourist desti-nation. When the number one golf course designer in the world chooses to go into a market for the first time, real estate inves-tors should perk up their ears. It is exactly these types of seismic events that I look for when I choose where and when to invest my own money.

Q: What is the political and economic climate in Nicaragua right now?MS: Nicaragua has had a democratic government for the past 20 years and has had five transfers of power during that time. Recently, the government has been passing laws to encourage foreign invest-

moving to international real estate? MS: For the same reasons, we’re just expanding the play-ground. The reason why I would never limit myself to buying in my own city or state is because there might be a bet-ter market than the one I live in. The failure to consider in-ternational real estate markets produces the same restriction. I want my money in the best market in the world no matter where I live, period. Maverick is opening up a private chan-nel for real estate investors to access unlisted properties in premium global markets, with property management options in place and a variety of exit strategies. Buying through Maverick has always meant getting exclusive prices and terms that are not available to the public. That has simply expanded to the international arena.

Q: Why did Maverick choose Nicaragua? And why the Seaside Mariana Spa & Golf Resort project in particular? MB: Over the last two years, the Maverick partners have traveled throughout Europe, the Middle East, the Caribbean and Central America to review real estate projects. In our opinion, Nicaragua is one of the pre-miere emerging markets on the world stage today. When you look at a map of Central America starting from the south, you be-gin with Panama, then Costa Rica — both of which have already exploded as tour-ist destinations over the last 15 years and have seen corresponding appreciation in property values — and the next country

ment in Nicaragua, making it particularly friendly to for-eign real estate investors.

For example, as an inter-national investor who lives in the US, I can own freehold property in Nicaragua with title insurance from a North-American-based title com-pany, and when I sell it for a profit I will owe no capital gains tax in Nicaragua. Pres-ident Ortega has personally endorsed the Seaside Mari-ana resort because it is an-ticipated that it will result in an explosion of tourism and be a huge economic boon for the country. So the govern-ment is very supportive of foreign investors coming in to buy real estate.

Q: What kind of deal terms was Maverick able to nego-

tiate at Seaside Mariana and how can our readers get in on the action? VS: As you know, our prices and terms are not available to the public, so I cannot unveil any details here. I will tell you that this is one of the most extraordinary deals I have ever seen and that we have a global exclusive on the entire resort—the only way to buy a property at Seaside Mariana is through Maverick. For detailed information and private ac-cess to our special prices and terms, your readers will need to become part of the Maverick community. Real Estate Inves-tors can apply to join our community of VIP Buyers and get access to unlisted deals like Seaside Mariana. Real Estate Agents can apply to join the Maverick Referral Network and make 3% every time their cli-ents close on a Maverick Deal. We invite smart real estate investors and savvy real estate agents to contact us today. We don’t care if someone has a lot of ex-perience, we care if they are serious about using real estate to build their wealth and design their lifestyle.

For information, contact Maverick Investor Group: www.maverickinvestorgroup.com or email: [email protected].

Seaside Mariana Spa & Golf Resort sits on 2 kilometers of pristine beach front.


a lot of investors get in trouble. The lower priced homes usually have households with limited to no savings or emergency fund. So when a tenant loses a job, the property owner feels that impact pretty quickly. Also lower-priced homes tend to be in older areas giv-ing the owner a much

higher rate of maintenance.

The Numbers This is where investors usually make mis-takes. The surface numbers can be very deceiving in real estate. When analyzing a real estate transaction many investors aren’t using vacancy and main-tenance, or applying the same vacancy and mainte-nance numbers to homes that vary widely in price, age, neighborhood, size and city. This can cause a pretty big disappointment when the cheap property you purchase is affected by socio-economic issues leading to high tenant turnover, criminal element, slow-paying tenants and maintenance is-sues. I’ve seen many people advertise profor-mas with high cash fl ow on smaller, older homes in areas with high crime, poverty, poor schools, and with low rates of home ownership. One can argue that these can be good investments structured correctly and by applying the right metrics to ensure a more accurate projection of cash fl ows is achieved. These lower-end properties have become the penny stocks of the real estate investment business. If you get the perfect tenant who doesn’t feel the pains of the recession, maintains the home themselves and stays in the property for a long time, you could hit pay dirt. Similarly if you’re

well-versed in Section 8 you can profi t greatly in the lower-end homes.

The median-priced home becomes the blue-chip property. The blue-chip home has lower levels of vacancy and rents that have been buoyed by average people be-ing displaced from their primary residence via foreclosure. In the market where my company is located, average-priced homes are selling for around $115,000. Obviously with distressed inventory out there, one can purchase properties at lower prices than this, improve them and probably have eq-uity that is more tangible than lower-priced homes. How can one possibly model a $115,000 home the same way as a $30,000 home? The $30,000 home (in most cases) will have signifi cantly higher rates of va-cancy and maintenance.

If you go up a step to the higher-than-average priced homes, you’ll no-tice those homes might offer stable tenants, usu-ally high-end profession-als who will reliably pay the rents. The cash fl ows may look lower on the surface than other types of

homes but these blue-chip homes perform more reliably on maintenance, vacancy, and valuations.

FinancingFinancing on blue-chip homes tends to be much easier than most any other price point for a number of reasons. First because the prices are low enough you don’t worry about jumbo loan pricing, rates, and re-strictions. On the lower end not all lenders are lending on homes priced under $50,000 and at times have a different rate table. In and around the median price nearly every lender offers investor loan products. I’ve also found the appraisal issues are fewer because normal sales activity exists at this

Blue-Chip Real Estate Strategy Fits Economic Climate

The housing recovery is limping along slowly leaving many real es-tate investors wonder-

ing where to invest their dollars. Some speculation is even re-turning to the market with new investors looking to purchase, renovate, and resale distressed properties for short term profi ts. Owning a real estate investment brokerage allows me to see a va-riety of transactions, including retail fl ips from speculators, investors buying $8,000 homes, renovating and placing tenants in them, and a higher quality purchase and hold homes closer to median home prices.

The latter is a strategy that I believe right now is being overlooked by many inves-tors. The ProductThere are many markets where you can purchase and hold homes at the median or even average home price and receive a positive cash fl ow with a traditional 20% down strategy. These homes, are out-per-forming many lower-priced homes from rental prices and home values perspective. Median-priced homes in most markets are three bedrooms, two bathroom homes, which offer good car storage. Usually this is the type of home most Americans desire to live in ensuring you always have both an available rental pool and an available buyer pool. This product offers real estate inves-tors multiple exit strategies with the ability to sell it retail versus lower-end properties, which usually need to be sold to other in-vestors.

In addition, median-priced homes are usually in areas low in crime, close to schools, shopping, houses of worship, and with easy access to employment. The in-verse of this is, of course, also true. I per-sonally own properties at much lower price points as well. They took the hardest hit on rents and value. This is where I’ve seen

by Ryan Hinricher, co-founder of InvestorNation.com This article originally appeared on BiggerPockets.com

Ryan Hinricher


Continued on page 24

Blue-Chip Real Estate Strategy Fits Economic Climate

price point. When you have a lot of normal sales, valuation tends to be (somewhat) stabi-lized. Exit StrategyHaving an exit strategy is an es-sential part of your real estate plan. Some investors plan on never selling and while that can make sense to receive all the benefits of real estate, lives change. If you think back five years ago and how different things in your life were at the time, you might agree that hav-ing an exit strategy is impor-tant.

With these blue-chip invest-ment homes, you’ll find mul-

tiple exit strategies. Median-priced homes have the widest available buyer pool. Think about that for a minute: Lower-end homes typically are resold to investors. So imagine buying a home on the lower-end at 60 cents on the dollar and thinking you have a lot of equity. In fact if your future end buyer is an investor, do you think they’ll pay 100 cents on the dollar?

Time on the market is also another factor. At the median-home price, time on the market is usually shorter than any other price point. So in planning your long-term strategy it seems to make sense to invest in homes that could be sold quickly, fi-nanced easily, and sold at or near market value?

Where to FindThere are many markets you can find these types of proper-ties in today. Without going into much detail in this article, there are plenty of cities which lie in states outside of Califor-nia, Nevada, Arizona and Flor-

ida, which were impacted very little by the housing boom and bust. Many of these cities have a good economic future, afford-able tax rates, net population growth, and high enough rents to achieve positive cash flow at the median home price.

In SummaryWith distressed properties mak-ing up a large percentage of total sales, then it only makes sense to focus on buying blue-chip homes at a discount today. In doing so, one can realize equity through quality reno-vation, placing a tenant and holding. These homes should provide you relative peace of

mind when compared to lower price points due to the lower socio-economic risk discussed earlier.

These types of rentals are a good fit for people looking to diversify out of equities and accumulate a few properties. While they may offer stronger fundamentals than most prop-erties they obviously aren’t bullet-proof. These are compa-rable to owning GE stock (GE registered no U.S. profit last year). While you can depend upon these homes most of the time, the downside risk is usu-ally minor price depression during an economic recession.

Lastly, in many markets this type of product and strategy simply wasn’t an option when prices were higher. I doubt that very far into the future this opportunity will be as widely available again in as many mar-kets as it is today.

- Ryan Hinricher is co-founder of Investor Nation, visit online: www.InvestorNation.com

Having an exit strategy is an essential part of your real estate plan.


Blue Chip Real Estate Strategy, pg. 22

I just had a great call with one of my coaching students on how to get a deal signed up by

the end of today. Times are tough, and although sending direct mail pieces is a great way to get leads, sometimes it’s just not possible to send them out — especially if you’re just starting out. So over the years, I’ve learned some “cheapskate” ways of fi nding leads.

1. Online RSS: If you’ve been in real es-tate any amount of time, you probably al-ready know that online sites such as Craig-slist, Redfi n, Backpage, Oodle, etc., can have some pretty amazing leads on For Sale By Owner (FSBO) properties. The only problem is that it takes tons of time to sort through all those sites to fi nd a decent deal.

Rhett Halsey, one of my good friends and an internet marketing guru for real estate investors, told me of a free feature offered by most websites: RSS or Real Simple Syndication. Instead of multiple searches for leads, the leads come to you in one spot. You can set up a Google Reader ac-count and have all these leads sent directly to you, the minute they are posted on one of these sites. It’s simply amazing how much time this saves.

We have just implemented this in my of-fi ce and within a few days got three proper-ties under contract and sold them within a few hours. My new assistant was fl oored 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 “fi xer,” “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 you’re done!

2. Multiple Listing Service: Your local MLS (Multiple Listing Service) offers a great way to fi nd leads for free. You can

narrow down your search to REOs, probates, fi xers or other criteria. You don’t even need access to the MLS, just fi nd an investor-friendly agent and let them know your criteria. They will set you up to receive

free emails. It’s important to work with an agent who

knows you want a smokin’ deal, and who will make lots of lowball offers on your be-half without fl inching.

For most listings, other than REOs, you can also try and make seller-fi nancing deals. The point is to get your foot in the door and start negotiating with the seller.

Another lead system you can set up on the MLS is expired listings. These list-ings have expired without anyone buying the property. This can mean you’d be deal-ing with very motivated people!

Set up a win-win situation with your agent where they can present your offer, and if the sellers don’t like it, the agent may be able to pick up a new listing.

3. Other Wholesalers: One of my absolute

favorite ways to fi nd deals is to ask other wholesalers what they currently have un-der contract and to market that property to my buyers’ list. Or, if you’re a rehab-ber or landlord, you can pick up amazing deals without having to do all the leg work. Where do you fi nd these wholesalers? If you see a “We Buy Houses” sign, call them. You’ll likely be dealing with a wholesaler. Also visit your local REI meetings, Google “wholesalers” in your area, ask rehabbers who they recommend, and ... don’t forget, ME! I’m an active wholesaler in Southern California who loves working with other investors. (Shameless plug? Of course.) If you get a deal done and need to sell your property really quickly, let me know.

Well, now there is no excuse for you not to fi nd a deal today! Good luck and send me a brief email letting me know if you found this helpful.

To contact Ginger Macias or learn about her speaking engagements and wholesale deals, visit: www.OCWholesalers.com

I just had a great call with one I just had a great call with one I narrow down your search

3 FREE Ways to Find a Great Wholesale Deal Today!


by Ginger Macias

Let’s face it …the country, t h e e c o n -

omy and the real estate market is just terrible. There are no more good deals. Let’s all get out of the business.

People are not building, buying or selling homes any more. There are so many over-encumbered and foreclosed-upon cheap properties available for pennies on the dollar that nobody wants them anymore. After all, who can make a living in this ri-diculous business these days?

Oh yeah? And Michael Jackson faked his death,

Elvis eats at Burger King, and the world ends in three years!

Not that they’re needed anymore, but here are a couple solutions to these hor-rible problems facing real estate investors in this disastrous economy:1. Stay in bed with a tinfoil hat on your head.2. Go live with your parents and let them feed you until you win the lottery.3. Go back to school on the government, and get a law degree so you can force peo-ple to pay you to stop suing them.OR...4. You can capitalize on singularly the greatest money-making opportunity ever! And you don’t even need a dollar or a dime to do it.

SHORT SALESThe short sale industry is burgeoning now and will probably continue to do so for three more years. New short sale mil-lionaires are being made every day. There are billions upon billions of dollars (Re-member when a billion dollars was a lot of money?) to be made in the “transac-tional funding” of compromised mortgage defaults — loans that would otherwise be forced into expensive and time-consuming foreclosures, and sold by lenders at public auction.

Def: Short Sale: The acquisition of real estate at a compromised (wholesale) pay-off amount that is less than the balance of the mortgage obligation.

Def: Transactional Funding: The two-stage practice of using another person’s

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CompromiseCompromise

money for a day or two at a high interest rate (but at a reasonable cost), with which to pur-chase a foreclosed-upon property by means of an all-cash offer prior to its scheduled pub-lic sale date. And then selling it on the day of closing, or soon thereafter, in a separate escrow settlement to an end-buyer who ob-tains his own loan and lives in and loves the property forever.

This process is known as the “A to B/B to C transaction.” In other words, you, the investor are the “B” component; the cur-rent owner is “A,” and the end-buyer is “C”. In other words, “B” buys from “A”

in one escrow closing process (taking full ownership of the property), and then sells the property to “C” at a reasonable profi t in a wholly separate escrow process.

It all sounds simple and it is! However, a thorough knowledge of all the rules and regulations concerning short sales, equity-purchasing, equity-stripping, foreclosure consulting, credit repair and mortgage lending is absolutely mandatory before becoming too far vested in the business of short sales. To date, hundreds of other-wise nice-guy and gal would-be investors have been severally sanctioned, shut down, heavily fi ned and/or sent to prison for vio-lating the very stringent laws regulating short sales and foreclosure consulting in various states.

In my own case, I’ve spent my busi-ness as a fearless bull rider: but in this last Rodeo, I’m sticking to riding milk cows. I won’t set any records or win any prizes; but I’m a lot less likely to get thrown of and have a horn poked up my rear end (… this, is, by the way, an analogy … not a good one, I agree, but an analogy none-the-less).

One of the most often violated of the many regulations being put on the books as of late has been that of taking money

for, or in advance of, services to be ren-dered, whether such services are actually performed or not. Another common viola-tion has to do with “sand bagging” by attor-neys, and many non-attorneys, who bill on a monthly basis for services (mostly loan modifi cation schemes) while a short sale or loan modifi cation process is presumably taking place. Instead, either there never was any such attempt or the attempt failed, and

the client wasn’t informed and was told, “We’re working on it…be patient,” while the monthly payments continue.

Another big one, and one that is proba-bly most tempting but also most deadly for REALTORS®, is the situation wherein the investor/REALTOR® has already lined-up a retail buyer who is ready to take the property at its true market value following the short sale acquisition by the investor. When the scheme comes to light, the con-tention by the lender in these cases is that if the property were worth more than they were told in the transaction, there would have been no need for a short sale and their resultant loss. They see such schemes as blatant bank fraud and have no sense of humor in such cases. As a matter of fact, two REALTORS® in Massachusetts were recently sentenced to fi ve years in prison each for having used this scheme several times.

So the long and short of it is…kind’a like Henny Youngman was one to say: “If it’s gonna hurt when you go like that … for cryin’ out loud, don’t go like that!”

Today’s short sale market is burgeoning.

“...two REALTORS® in Massachusetts were recently sentenced to fi ve years in prison each for having used this scheme several times.”

by Bill Gatten

Continued on pg. 29

Today’s real estate environ-ment can seem a little tricky to navigate. So many possible ways to make money exist in this indus-try, it can be overwhelm-

ing, especially for those who are just get-ting started in real estate investing. There are many late-night television shows that claim to teach you how to be a multi-gazil-lionaire by next week, but is there any truth to what they’re saying? Take a look around. You’ll notice that there are a lot of successful real estate en-trepreneurs, people who are making a kill-ing today, in this down market. The ques-tion is did they just start making lots of money by pure luck, or did they have men-

tors, courses and systems to help them achieve their success? Those of you who are living the real estate dream, you know that luck had little to do with where you are today. It takes concrete actions, goals and guidance to get to your dreams.

Well, for those of you starting out in real estate who are anxious to get going, there are wonderful ways to get into all this ac-tion.

Recently, I spoke with Matt Malouf about his new program, which helps inves-tors bridge the gap from real estate dream to reality. And by reality, I’m talking about actually owning your very own investment property at the end of the course! (More on that later.)

Malouf is an investor-friendly real estate agent in California and has been investing

since 2001. Over the years, he has special-ized in wholesaling, owner fi nancing and foreclosures. Malouf has developed a busi-ness model that he describes as T.E.R.M.

“It is a model designed to effi ciently minimize the investor’s time, energy, re-sources and money – in that order,” he ex-plains.

To that end, his program is a 10-week course that walks investors through the ex-act steps needed to fi nd, analyze and buy an investment property that cash fl ows from day one. Some topics include learning how to set up your property management team, screen tenants, how to hold title and fi nanc-ing options.

The motivation to create this course came from Malouf’s desire to meet the needs of investors who want to get educat-

by Ginger Macias

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ed and match them with the best available product in the real estate marketplace.

This “hybridization” will en-able beginning investors to buy a property that meets their cri-teria, after learning all the basic steps needed to acquire and manage that property.

“This is not just a course,” Malouf explains. “At the end of 10 weeks, they’re going to have a cash-fl owing house, an asset to put in their portfolio. It is all- inclusive in the program.”

Malouf’s T.E.R.M model is ideal for someone who has a full-time job and wants to start building a real estate portfolio as part of their retirement plan.

Over the course of 10 weeks, students receive the entire course through the internet, which includes 30 to 60 minute lessons by audio, video and text articles. Each student also re-ceives the “Million Dollar Rolodex,” which gives the con-tact information of all the key

with Matt Malouf

It takes concrete actions, goals and guidance to get to your dreams.

There really is no limit to the number of homes in foreclo-sure that lenders would like to get off their books in order to reduce their matching fund re-quirements and free up more cash to lend out.

Millions of dollars are ready to be made by integrally in-volved entrepreneurs over the next few years.

To miss out on any of it would be an out-and-out shame … if not a crime.

There are two sets of adages to live by that one must ponder and decide upon before jump-ing into the business:

Set A - “Strike while the iron is hot”; “He who hesitates is lost”; “The early bird gets the

people on the team. Malouf and his team then go out and fi nd a property that meets the stu-dent’s needs. They send per-sonalized updates, letting them know what’s being done to fi nd them a property.

This program lays the foun-dation to successful real estate investing. Malouf gives this analogy: “It’s like building a skyscraper. You have to spend the time to set up a foundation and set it nice and deep, nice and strong. That way, it will

stand through the good and the bad.”

Malouf’s T.E.R.M program launched this summer and is available year-round to a limit-ed number of people. Be sure to reserve your place today. Readers can contact Matt Malouf directly at (562) 443-7042; mention the “out-of-state magazine special.” Or visit: www.buysellwithmatt.com Enter the promo code “Real-ty411” in the note section.

worm,” and “If everybody is doing it, it’s time to do some-thing else.”

OrSet B - “Haste makes waste”;

“Look before you leap”; and “Wait until all the bugs are worked out before you jump in,” or “Wait until you see ev-eryone else doing it, then jump in … why take chances?”

My own: “Successful people make quick decisions and are slow to change their minds, the unsuccessful are slow to com-mit and quick to change their minds.”

So, what’s my advice regard-ing the current short sale mar-ket? OK, guess!

A Brave New World, pg. 27


ness cards in hand. Dressed in casual cloth-ing, they chatted while munching on choc-olate chip cookies. They discussed their latest deals, needs and goals.

When the master approached the front, the students took their seats and settled down quickly, ready to start their lesson.

Sensei’s cash and wealth system is pure

and simple. He trains his students on how to create cash quickly through flipping real estate so that resources can be funneled to purchase income-producing property.

And what areas are being focused on? Right now, he has two major target zones. Phoenix, Ariz., is his target zone for rehab-bing flips and rentals; Southern California is his bulls-eye for wholesaling properties.

He and his members target Phoenix as their area of operation for fixing and flip-ping properties for immediate paydays

Hitting the Club with Sensei at 12 Rounds

Self-reliance, balance, integrity: these are just some important mantras in the martial arts world. Step into a monthly meeting at

Black Belt Investors and you’ll soon dis-cover these disciplines are in full force.

With two locations in Southern California (Downey and Norco), Black Belt Inves-tors provide a social network for both the novice and seasoned. It is a club where education is emphasized, deals are analyzed, and action is taken to reach goals.

Ricardo Valencia, a national investor with holdings in four states (CA, TX, IN and MO), stressed the importance of attending monthly club meetings, as we were walking into a community center in Downey.

“We have a responsibility to teach those who are newcomers,” he says with a smile, “And, at the same time, you learn from those who are more advanced.”

Valencia, who travels throughout Los Angeles County to attend numer-ous real estate events, admits that the members of Black Belt Investors “keep bringing me back ... it’s always nice to mix and mingle with them.”

What began as a casual meeting at a coffee house in 2000, by investor, martial arts expert and entrepreneur, “Sensei” Sean Gilliland has become an organized official club boasting two locations and filling the room with a strong following each month.

Sensei chose to stake his claim in Downey, the city where he was raised. Next, he chose Norco, the city where he now lives with his wife, Annamaria, a licensed REALTOR®, and their three children.

The club meeting room, located inside a community center, was full and bustling in May. The sweet aroma of freshly brewed coffee and abundant smiles were inviting. The group, mostly in their 40s and 50s, was diverse in experience and background. They were master networkers, with busi-

and building wealth through cash-flowing rentals, all using Sensei’s Remote Rehab-bing program. “The Phoenix market is pro-viding incredible wholesale deals on newer homes starting at $48,000,” he says. “Flip-pers are turning their properties and cashing out about every 90 days. The buy and hold strategists are capitalizing on great cash

flow averaging $900 per month.”Although he started his career as a

remote rehabber (his first deal was in Florida), he now prefers to wholesale and calls it: “The Ultimate Real Es-tate Cash Machine.” His investing formula, “Find it, Bind it and As-sign It™,” is used in California, but the strategy can be duplicated in any area, in any market.

Wholesaling “does not require cash, credit or a license, which equals NO RISK.” He further explains, “The intention is to sell the contract to in-vestors who can’t find a deeply dis-counted deal on their own.”

While many people, including Bro-kers and REALTORS® who do not understand creative real estate, frown upon any deal that is not a traditional transaction, wholesaling retains an important role in the community. As a matter of fact, wholesalers are often the first to spot and service a homeowner or property in distress. In wholesaling, success depends on recognizing circumstances and offer-ing solutions.

Sensei recalls one recent transac-tion in which he assisted a family made up of siblings scattered around the country who were feuding over an inherited home in need of many repairs. Because of the stress it was bringing upon the family, they wanted to dispose of the property quickly. Sensei packaged the deal and sold it to a lo-cal rehabber willing to put in a lot of sweat equity and cash. The investor was willing to take a risk for a chance to profit.

[

Continued on pg. 59

by Linda Pliagas

Can’t seem to locate a distressed homeowner or unwanted property? Believe it or not, many people have real estate that they no longer need or want. (Yes, we first found this con-cept hard to believe too!) Follow these

five secrets from a master wholesaler, and you’ll soon have more deals than time to work them.

#5: Code Enforcement: Many local gov-ernment websites, such as Los Angeles County, offer online lists of distressed properties. This is an often overlooked treasure filled with potential gems.

Sensei Spills His Top 5 Secrets to Land a Deal

Continued on pg. 59

Sensei Gilliland


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