Free Money….. No, Really! It’s True!

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By Reggie Brooks

Our Government makes hundreds of different programs available to distribute billions of dollars to us in the form of grants, low interest loans, and subsidies. The money is then appropriated by politicians who are smart enough to know that the best way to keep their jobs is by funneling Government money into the communities they serve. That’s where we can step up and reclaim our money.

It’s Our Money Anyway

I say reclaim because it’s our money in the first place. The Government takes the money from us in the form of taxes, then gives it back to us in the form of grants, low interest loans, and subsidies. Here’s the kicker…The Government only gives the money back to the people who learn how to get it. You have to learn how to ask for it! If you can follow instructions on an application, the chances are pretty good that you can get a grant for something.

Free Money For Almost Anything

Do you have an idea for a business? Want to invent something? Need help with living expenses? Want to change your career? Want to buy or fix up real estate? There is Government, Corporate or Foundation money that can help.

How about $30,000 to tag Grizzly Bears. Not that daring? How about $96,000 to study fish. Or $43,000 to become a French Chef. Or over $148,000 to rehab an apartment building. Sound too good to be true? Well, it’s not. There are far greater stories.

Uncle Sam Can Be Your Very Generous Partner!

You have to see the bigger picture. To us real estate investors, Uncle Sam is our best friend and a great financial supporter. If you’re a beginning investor, Uncle Sam’s going to help you by guaranteeing that you get a decent loan to buy your first house or apartment building. There are many first time homebuyer programs that were created for that purpose. If you’re having trouble coming up with enough money for a down payment, he makes it possible for you to buy with a 3% down payment (FHA), or a 0% down payment (VA). Then he makes the IRS give us a lot of tax breaks because we now own property. He even helps people in areas where people have trouble paying their rent under the Section 8 Subsidy Program. Our partner, the American Government encourages us to keep America strong by using these programs. When you learn how to use these programs, the financial rewards can be substantial.

Let The Government Help You To Make Money

Of the many different types of financial assistance available to us, I especially like the Rental Rehab Loan Program. Here how it worked for me. Several years ago, I purchased a four unit building that had my friends wondering if I had lost my mind. The units were one bedroom, one bathroom each, and were inhabited by four elderly ladies who had been living there from 21 to 24 years. The problem was that their rent had never been raised! The total income from that building was around $460 per month! FOR THE ENTIRE BUILDING!! No, I’m not crazy. I did my homework and I found a Government program called the Rental Rehab Loan Program. The program required that I borrow at least $5000 to be used for upgrades in the building. The benefit to me was that I received the money at a very low interest rate, and (much more importantly) the tenants would qualify to go on the Section 8 Government Subsidy Program!

A Great Win-Win-Win Deal

All four of my elderly tenants were existing on a very meager social security income. They lived in the fear that whoever buys the building will want to raise the rent. They knew that the market rent was around $625 per month, and they knew that they could not afford it. They all thought that they’d end up homeless on the streets. They had no idea that these wonderful Government programs existed. I borrowing as close to $5000 as I could (I wanted to maximize my cash flow), and started the work on the property. When it was all over, I ended up with a really nice building with 4 wonderful senior citizens as tenants. I increased the income from the building from $460 per month to around $2600 per month thanks to my partner, Uncle Sam.

Everyone Was A Winner

Everyone won in this deal. The Government won because they were able to get the money out into the community where it could do some good. The tenants won because they were able to stay in the homes they’ve been in for over 20 years. They actually ended up paying less toward their rent because of the Section 8 Subsidy. I obviously won because I was able to take a non-performing piece of property and turn it into a success. Thank you, Uncle Sam!

Do I Need To Have Good Credit?

That depends on which of the many programs you’re applying for. There are some programs that are project based. In other words, if your project fits a certain category, the project itself can qualify for the money. It could be the real estate, the area, the tenants, or the business that qualifies, not you personally. If it’s a program that requires you to personally qualify, then your credit can become a factor. But understand this. There are programs that are designed for people with bad credit. There are even programs that require you to be turned down by a bank before you can qualify for the money!

So, How Do I Go About Getting This Free Money?

I’m going to give you a thumbnail sketch of how to go about getting this free Money. My obvious limitation is that I don’t have a full day to teach you in great detail. My hope is that what I share with you in these pages begins your great adventure in getting this money. As you begin your wonderful journey, please understand that there is a degree of work that is necessary. You may find that many phone calls and follow up are required to nail down that particular grant you’ve been pursuing. Make the phone calls. Do your follow up work.

You may find that the program is no longer in existence. Don’t despair. There may be 2 or 3 other programs under different names that have replaced the cancelled program. So don’t quit. There are so many different Government programs. Thousands of ways to qualify under different application processes. There are thousands of different corporation grant funds, foundation grant programs and non-profit organizational grant programs. If you can’t qualify for 1 program, there might be 5, 10, 25, or 50 other programs that you can qualify for.

Use The Resources That Are At Your Fingertips

The first thing to do will be to make contact with the organizations that provide the money. One of the best sources to find these organization is your public library. Ask the librarian to help you locate Corporate and Foundation Grant Sources. There are literally thousands of corporations and foundations that give away money every year. Why? Because our system makes it very attractive for corporations who earn a lot of money to give it away and write it off rather than keep it and be taxed on it. And when you factor in the great PR they get for giving money away, it’s a pretty good win-win deal.

Your Project Should Be Within The Grant Giver’s Guidelines

Once you’ve made your initial contact with a potential funding source, ask them to send you all the information they have on their grant criteria. It will more than likely come to you in the form of applications and guidelines. These guidelines will usually lay out what it takes to get funding from them. Your project must fit their funding criteria. If it doesn’t, go and find another source for funding.

Requesting Your Grant

When you’re ready to request your grant you’ll need to do so using two documents. One is a Grant Proposal, and the other is the Letter of Appeal. The difference between the two documents is that the Letter of Appeal is a summary of the Grant Proposal. If you’re requesting a grant of $2,500 or less, you can usually accomplish that by using the Letter of Appeal only. If you’re looking for more, you’ll have to use the Grant Proposal and the Letter of Appeal.

When you find the right funding source for your project, this is when you write your proposal and your appeal letters. Submit your proposal to as many funding sources as you can find. There are not many restrictions on the number of grants that you can receive. Why not get five grants instead of one? Why not ten grants instead of five. Get the picture?

Remember, You Are Entitled To This Money!

As I mentioned before, these are your tax dollars at work. Do not feel guilty! It’s your money in the first place! Uncle Sam is a very generous partner who wants to keep America strong. He does this by making funds available to be used for specific purposes. Some of those “purposes” that Uncle Sam allocates billions of dollars for are in the area of real estate, small businesses, and education. I challenge you to learn about the programs that are available for you and take advantage of them. They are there for you to use, but only if you’re willing to learn how to use them. Have a grand – Grant Adventure!

 

Reggie Brooks

Reggie Brooks, is an international speaker, author and educator, dedicated to inspiring others to achieve personal success through real estate investment. He is also the #1 Vacant, Abandoned & Distressed Property Specialist in North America.

Having risen above a life of poverty, he has achieved what many people consider to be impossible. He went from making $36,000 per year at the local telephone company, to making over $40,000 per month in his real estate business. Today, Reggie delivers his personal philosophies for success at major business venues and expositions throughout the United States. Reggie attributes his success to faith, dedication to success, and to the invaluable coaches he has had along the way.

Texas Cash Cow Arrest — Beware of Real Estate Fraud

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By Kathy Fettke
The arrest of a Texas developer, who’s well-known in the real estate industry, is a big reminder to thoroughly vet the people and deals you are working with. Phillip Carter of Frisco is accused of taking $17.5 million dollars from investors for development projects in North Texas but authorities say he used much of that money for his own personal needs. His wife, Shelley, and alleged accomplice, Richard Tilford, also face charges.The Texas State Securities Board lists almost a hundred victims, many of whom are reportedly elderly and probably trying to boost their retirement portfolio. Now they face financial loss, and are likely wondering where they went wrong.

Who is Phillip Carter?

Carter is the owner of Texas Cash Cow Investments, Inc., although the website for that company no longer exists. He’s also the owner of North 40 Developments, LLC, which does have a website. It doesn’t mention Carter’s name anywhere, however, but it is located in Frisco.

According to Texas authorities, Carter and Tilford told investors their money would be used for the development of commercial and residential properties. The indictment says Carter used at least some of those funds for unrelated purposes, including personal expenses and the payment of an IRS tax lien.

It also says that Carter lied about his personal background — that he falsely claimed to have a chemical engineering degree from the University of Virginia and had worked as a project manager for Texas Instruments. It also says he made up the story about working and traveling with “Rich Dad, Poor Dad” author Robert Kiyosaki.


Trouble Begin in Early 2016

The indictment lists the names of all the people who invested with Carter in early 2016. Some contributed as little as $12,000 while others gave Carter as much as $700,000. It says that Carter held the money as a fiduciary for the purpose of funding investment opportunities that would result in a profit for investors. Instead, Carter is accused of using the money for personal reasons that have now put those funds at “substantial risk.”

Carter was apparently attempting to move forward with the projects but came up short on funds. Authorities say a $6 million check for labor and materials bounced in December of 2016. He reportedly borrowed $32 million from a Seattle-based private equity firm more recently to pay for construction costs on two properties. But, as one news story points out, the lender holds the first lien, which means that investors will only get paid if there’s any money left over.

His wife is accused of money laundering and the misuse of investor funds. Investigators say his alleged accomplice, Tilford, raised $6 million from investors, who are listed in his indictment. They say the funds raised by Carter and Tillman were mostly in the form of promissory notes.

Red Flags for Real Wealth Network



Investing in real estate is one of the most stable ways to build wealth, but it can also be one of the fastest ways to lose money if you have the wrong property, and worse, the wrong team. Unfortunately, these Texas investors are finding out the hard way, what they should have done differently.

If you were a Real Wealth Network member during the Great Recession, then you probably heard of Texas Cash Cow and Phil Carter. Back then, he was one of the largest turnkey operators in the country. He would buy large tapes of REO property from banks at highly discounted prices, renovate to like new condition, and offer on-going property management.

Many of Real Wealth Network members purchased property from Texas Cash Cow, and initially, we received rave reviews. But then something changed and we started to get complaints about property management. At that time Phil came to us and said he was no longer focusing on single family rentals but instead was creating a new model. I don’t remember the details but it had something to do with buying or building apartments or condos and selling the individual units to investors. I told him that was something we would not endorse, and that was the last I heard from him.

It just didn’t make sense that a bunch of investors who don’t know each other could successfully own their own units in an apartment or condo complex — plus, I didn’t think any legitimate bank would finance it.

There are many lessons here that I would like to share to make sure investors don’t make similar mistakes.

  1. If something doesn’t make sense, don’t do it. Just because you don’t understand it doesn’t mean you’re dumb. It might mean the deal just doesn’t make sense!
  2. If someone is trying to do something new, something they’ve never done before — don’t let them use your money to figure it out. 
  3. When you lend money to a developer, make sure your funds are recorded in first lien position. Do not sign a promissory note that is not tied to property.
  4. When someone is raising money from investors, they must file with the S.E.C. even if it’s for a promissory note. I recently saw an email go out from another turnkey company in Texas saying that they were now doing syndications. I called them to find out more, and they told me they had a new opportunity, where investors could earn a flat return by investing as a private lender on their commercial property in Houston. I asked if they had filed with the S.E.C. They said they had not because it was a note and therefore they didn’t have to. I told them that was illegal. Apparently they didn’t trust my opinion as I saw another email go out with the same message.
  5. When you buy rental property, you can get inspections and appraisals to verify that what you are buying is indeed what you thought you were getting. It’s pretty straight forward. When a turnkey company starts doing something different than normal real estate, question it. Just because someone is an expert at one thing does not make them an expert at another. I heard that some investors bought property from a turnkey company in Chicago and closed on the property before the repairs were done, and the seller gave them a promissory note. That note was never paid when the company folded. Now why would anyone do that? Why would you close on a property before the work is done? Never pay any contractor before the work is done!
  6. Finally, if you do invest in a syndication, make sure the Use of Funds section is spelled out clearly. 

Links:

https://www.ssb.texas.gov/news-publications/north-texas-developer-indicted-alleged-17-million-real-estate-fraud

https://www.ssb.texas.gov/documents-carters-tilford

https://smcorridornews.com/texas-developer-indicted-for-alleged-17-million-real-estate-fraud-from-elderly/

https://www.yelp.com/biz/texas-cash-cow-investments-frisco

http://www.northfortydevelopment.com/about/

 

Kathy Fettke

Kathy Fettke is Co-CEO of Real Wealth Network and best selling author of Retire Rich with Rentals. She is an active real estate investor, licensed real estate agent, and former mortgage broker, specializing in helping people build multi-million dollar real estate portfolios that generate passive monthly cash flow for life.

With a passion for researching real estate market cycles, Kathy is a frequent guest expert on CNN, CNBC, Fox, Bloomberg, NPR, CBS MarketWatch and the Wall Street Journal. She was also named among the “Top 100 Most Intriguing Entrepreneurs” by Goldman Sachs two years in a row.

Kathy hosts two podcasts, The Real Wealth Show and Real Estate News for Investors — both top ten podcasts on iTunes with listeners in 27 different countries. Her company, Real Wealth Network, offers free resources and cutting edge education for beginning and experienced real estate investors. Kathy is passionate about teaching others how to create “real wealth,” which she defines as having both the time and the money to live life on your terms.

 

 

The Secret Sauce to Managing Your Wealth…Do You Have One?

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By Anita Cooper

“To say that I was a failed investor is putting it mildly…”

Steve Rozenberg, founder of Empire Industries, LLC and full time commercial airline pilot, knows what it’s like to have your property investing aspirations crash and burn.

After 911, the airline industry was very shaky…he wasn’t sure he’d have a career or be able to enjoy a retirement, so he started looking for other ways to grow his wealth.

Enter real estate investing…

Like many new investors, he bought a lot of wrong properties…properties that management companies didn’t want to touch because they were low income.

Empire Industries, LLC was born out of the need to manage his own properties to keep his business intact.

Using the procedures and processes he’d learned as a pilot, Steve and his business partner – an IT whiz – created their property management company for their own preservation so that they could keep their properties afloat.

Self management vs property management

“I’m often asked if it’s smarter to self manage your properties instead of hiring a property manager and my answer is always that it depends on your end goal.

“So you know, many people focus so much on the acquisition of the deal they never think about how they’re going to get the return month after month, year after year. And normally, managing the asset is an afterthought, when it’s actually the most important part of the puzzle. This is because it’s what actually gets you the return.

“If you’re willing to commit and put the time in and learn the laws and regulations and create all of these procedures and structure, then yes, you can certainly self manage.

“But if it’s not something you want to commit to and if you don’t have a plan to succeed, then you’re planning to fail. That is why landlords are among the highest sued individuals in real estate, because they don’t go into this with a business plan of how to succeed year after year. They’re so focused on the purchase they never think about the month to month…they always look at the ROI and the cash on cash return and look at all of these big numbers, but what they never think about is how do I get those numbers in my pocket?”

Whether you have one or one hundred plus properties, Steve says it all boils down to one thing…treating your property investing efforts like a business.

“If you have one property or you have 50 properties, you own a business.”

“It has profit, loss, income, expenses, legal obligations…and you know the tenants that live in your property have rights. And as an owner, you are obligated to protect, to make sure that you’re working within the confines of the law. So yes, you could manage your own property as long as you’re willing to commit the time to educate yourself on the laws and regulations, fair housing , discrimination, etc.

“Here in Texas, we have Texas property code, so these are all the things you need to think about if you’re going to self manage one…50…100 properties, it doesn’t matter…a business is a business.”

What to look for in a property manager

Having a conversation with a prospective property manager is one of the best ways to zero in on the company that will be your partner in success.

“I would first make sure that your business model aligns with the property manager’s business model,” said Steve. “By that I mean, do they manage prices in the same price point that you own a property in?

“If you want to be a “hands-off” property owner, do they want you to be “hands-on?”

“I think it’s very important to have an initial meeting with the property management company and set the proper expectations with them, meaning what is it I can expect of you and what is it you expect of me?”

“A lot of times people go with the cheapest property management company and then they end up realizing that cheaper isn’t cheaper…it actually becomes more expensive because the company may be cutting corners, cutting costs, when for an extra dollar or two dollars a day you could of had a reputable property management company that is aligned with your business goals.”

Moving forward

Although Steve experienced great success managing his own properties, he and his business partner knew they could do even more to help other investors, so they sought the help of a business coach.

“We went to a business coach – Doug Winnie of Action Coach – five years ago, who told us that yes, we have a business because we have opportunity, scalability and marketability. However, based on what we’d done so far, we probably wouldn’t succeed as a business. So we hired him on the spot.

Then we attracted the founder of Action Coach, Brad Sugars and went from zero to about 850 properties in 5 years. In fact, we’ve won the North American Marketing Campaign Award from Business Excellence, with 1471% return for our efforts,” said Steve.

“Brad is the founder of the whole coaching franchise and he became a partner of ours in the business and he is now the one [who’s] helping us grow this nationally, with his guidance,” Steve continued. “So because of him we are now in Houston, Dallas and Ft. Worth…and now we’re starting to open up more cities this year; Austin and Ft. Hood/Killeen.

“We’re going to keep opening offices and continuing to grow under his mentorship and his strategy as we start the licensing model.”

What does this mean for you as a property investor?

As the fastest growing property management company in Texas, with offices in multiple cities, Steve and his team have proven that their property management process works…and works well.

That’s why they’ve decided to begin duplicating their process under a license or franchise model…so that other investors can do what they’ve done.

“We are spanning across Texas…we’ll be in almost every city in the next 5 years. This means we’ll be able to help even more investors succeed in growing their business.

“Our goal is to have your business succeed…for you to become wealthy through real estate. You need more than someone ringing the cash register and collecting the rent…you need someone on your team…like Empire to help ensure that success.”

Anita Cooper is the founder of Northwoods Writer, a marketing resource for real estate professionals. She lives with her family in the beautiful Northwoods of Wisconsin when they’re not cruising the highways and byways on the lookout for something new and interesting or at least calm and relaxing.

 

Are Investments in Temporary Rentals a Good Investment?

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By Edward Brown

With the popularity in Air BNB [for discussion purposes, we are using Air BNB, but there are other similar companies that could be substituted in] gaining traction in the market place, many real estate investors have been looking at purchasing residential real estate for the specific purpose of renting the real estate on a short term basis similar to the hotel model.

Rather than attempting to garner a month to month tenant or a longer term lessee, some real estate investors have been looking at a model wherein they forgo the security of known monthly rent in exchange for the hope of higher income per month by renting to vacationers on a short term basis. This type of rental is especially the case in popular vacation destinations such as San Francisco and the Napa Valley as well as the outlining areas.

There are pros and cons to this model. From a pro standpoint, many times, renting to vacationers for less than half a month can earn more than a full month under a typical month to month tenant. In the Bay Area, monthly rental may be $3,000 on average, but the nightly rental of an Air BNB for the same house may average $300 per night. Also, eviction is not usually a factor in the vacation model. Most vacationers are not squatters by nature, and lessee evictions [especially in tenant friendly states such as California] can be expensive in time, aggravation, and money. Although there will always be the horror stories of the vacationer who does a fair amount of damage to the house, these instances are much less than the usual monthly renter.

On the con side of renting via Air BNB, there is no security of rental income surety. One never knows how many days the house will be rented. Also, some months may be more seasonal than others. For instance, attempting to rent your Napa Valley place out in February may rent for far fewer days than in August when the vineyards are more in bloom. Other cons include the movement by cities to either tax the income via a “transient” tax or to not allow rentals for shorter than 30 days. This has recently been a big issue as neighbors complain about noise, constant flow of traffic, and so many different renters coming and going as well as the belief that property values go down when living next to this type of rental. Since the number of renters using Air BNB for more than 30 days is much smaller, the odds of getting a renter for more than 30 days to make up for the lack of days being rented in totality as compared to the desired occupancy of the Air BNB rental are very slim. In addition, someone desiring to rent under these circumstances is usually not willing to pay the typical nightly rent for the whole 30 days. Either the “landlord” will advertise a bargain rate for 30 days, or the prospective renter will negotiate a lower rent. A typical $300 per night rental using Air BNB might go for $150 per night for a 30 day rental.

Security deposits are normal for both Air BNB and typical rental situations, but Air BNB will most likely have an additional cleaning fee that may or may not match the actual cost of cleanup. In addition, the Air BNB rental will need to be furnished including bedding, towels, and other necessities whereas most typical rentals usually come unfurnished. This adds to the cost of the set up and continuing maintenance of the Air BNB as well as having someone keep an eye on the rental to make sure the unit is in the same condition from tenant to tenant.

As with Uber, Air BNB has gained traction. With Uber, it took some time for the general public to see that this was similar to taking a taxi and, once people got the hang of it, it became the norm. With Air BNB many vacationers feel comfortable staying in someone’s house that they know has been prepared for them in the same way a hotel makes up a room. There is no room service with Air BNB, nor are the sheets changed on a daily basis, but the costs can be quite attractive to the renter as well as the usually much larger space they get by staying in a house versus a hotel room.

From a lending standpoint, most lenders will severely discount the anticipated rent expected from the borrower who wants to buy a house to place in the Air BNB system. In fact, many traditional lenders will not look at lending in these circumstances with unknown income. Traditional lenders may impute income if the rental is a typical leased situation [although usually discounted somewhat], but Air BNB income is not like a hotel that has many rooms. Either the Air BNB unit is 100% rented or 100% vacant. Hotels have the luxury [from a lenders point of view] that the hotel’s experience may show 60-80% occupancy.  Especially if the Air BNB owner is a first timer, most banks will be very wary of lending to borrowers looking to buy a house for Air BNB income. How does the new owner know how much to charge? These and other questions will make banks turn down more often than approve these types of loans.

If the buyer of an Air BNB house has experience and other rentals in their portfolio, the bank may be more inclined to take a closer look. Otherwise, the buyer of the Air BNB house will have to look for alternative lenders. If the buyer/borrower puts a significant down payment, the alternative lender may be able to be convinced to make the loan since this type of loan would be considered a non-owner occupied [no consumer] loan and not have as many restrictions in its lending practices due to Dodd Frank, TRID, ATR, and other regulations. The alternative lender is more willing to look at what can be done with the house upon a foreclosure. Can the property be sold easily to an owner/user? Can it be rented to a normal tenant lease? Most likely, the alternative lender will not look at keeping the house [upon foreclosure] as an Air BNB; that is a business rather than a rental and in need of more management.

The prospective buyer of an Air BNB should look at what a typical lease would look like should the Air BNB model not work for any number of reasons previously mentioned. If the typical lease income is too far below what is prudent from the standpoint of NOI, the buyer may decide to choose a different property to Air BNB if that model is so desired.

Edward Brown

Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company. Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns

 

Using The Right Mailing Lists to Locate Motivated Sellers (Part 1)

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By Kathy Kennebrook “The Marketing Magic Lady”

Implementing the right list and using the right letter when creating your direct mail campaigns to locate motivated sellers is crucial to your success as a Real Estate Investor. There are lots of different ways to find these lists and lots of different types of lists to choose from.

The easiest way I suggest to locate a list to use for mailings is to simply go to your property appraiser’s office or auditor’s office and have them create it for you. There are many different parameters you can use to create these lists.

Some of the lists you could create might be directed at out of town owners, deed transfers, zip codes ranges, sale dates, estates, evictions, delinquent taxes or pre-foreclosures. These can all be good lead sources for you to use to find motivated sellers and these are lists that I use in my business on a daily basis in addition to several others.

Sometimes these records are available on CD and sometimes they are available as a paper copy. Every county differs in how they distribute this information. I suggest going down to the property appraiser’s office and speaking with someone there directly. Do not call. You may get someone on the phone who doesn’t understand what it is you need and you will not get the lists you need. Since you will be using this list for several months to do repeat mailings, it would behoove you to get the right list the first time.

There are also mailing list services that provide this service for you and usually you can locate them online by searching mailing lists or mailing services. Just be sure that whatever list source you are using has a list that has current information. Otherwise you are wasting your time and money on list that will net you zero results. I suggest getting a small list of around 100 pieces to send a sample mailing in order to test the list before spending a lot of money on this resource.

There are a lot of good internet resources to use to find excellent lists for finding motivated sellers using specific parameters. Once again, make sure you check the age of the list and the reliability of the company before making a long-term commitment.

Another way to find lists of motivated sellers is to go to the courthouse and check property records. One of the lists you can create is notices of default or lis pendens. These are people who are in pre-foreclosure. There are also probate and bankruptcy filings you can find at the courthouse that will provide a resource for leads.

When you invest in my Marketing Magic System I provide the letters for you to use along with resources for all the mailing lists you will ever need to create successful direct mail campaigns.

For more information on mailing lists to use in you Real Estate Investing Business check out part 2 of this article. In the meantime, check out my website at Marketingmagiclady.com for all the tools you need for you Real Estate Investing business including all the resources and letters you need to create successful direct mail campaigns for your real estate investing business.

Kathy Kennebrook

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

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

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

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

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

 

The Rise of Private Capital Lenders and Why It Matters for Fix and Flip Investing

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By Ryan Roberts

Things have changed dramatically since the crisis of 2008. Spurred by a collapse of the housing market, the most financially tumultuous time in recent history drove large-scale, well-known banks to pull the e-brake on real estate lending. While the jury is still out, there’s no denying that the crash of the late-2000s was exacerbated by banks handing out mortgages to risky borrowers who, frankly, couldn’t afford them.

So, suffice to say that, even to this day, those latter-mentioned banks are still quite hesitant to give out speculative loans. It’s like selling the same jug of milk within the same financial bounding box. You either fit within the parameters of that box, or not. However, it’s this exact hole in the market that’s allowed private lenders to enjoy a massive second wind of popularity.

Lending from Non-bank Intermediaries

Private lending has turned the tables on the traditional banking industry’s foremost product: Loans. Ten years since our nation’s most recent economic downfall, investors, from all industries and niches, having poured literally billions into companies and business that have been deemed by “Big Banks” to be too trivial or volatile to lend against.

Well, it’s turning out that this is an incredibly lucrative, healthy, growing market. Money flowing in is feeding the ten-year-long trend of private lending. In fact, its valued at $500 billion, according to figures recently published by Bloomberg. The numbers are only growing, quarter after quarter; by 2020, it’s estimated that private lending could top $1 trillion. Much of which is within a completely unregulated financial market.

Tech-savvy Entrepreneurs are jumping on the proverbial train to, quite literally, capitalize on this boom, all while making it easier for small-scale borrowers to find applicable lenders. Jordan Selleck, for example, created DebtMaven, which is like a financial Tinder of sorts, is matching borrowers with lenders. These types of tools are yet to exist at scale in the real estate investment sphere.

Now after just two years, almost 500 lenders are signed up on the platform, ready to match with a growing amount of private lenders on the hunt for lending opportunities. “They’re hooked on deal flow and willing to pay,” Selleck told Bloomberg in regards to his lenders. “It’s grown at a crazy pace.” It’s not the same type of lending were used to, but a great analogy of the overall market trend.

What this Means for Fix and Flip

Since the financial crisis of ‘08, non-bank intermediaries—i.e private equity firms, hedge funds, and other private capital lenders—are continuing to flourish, making up a greater proportion of all global real estate assets. For private real estate lenders, this surge of private capital is amazing news.

So, just why is private credit so intriguing to the lenders? Well, it all boils down to yield and regulation (or lack thereof). Ten years ago when the central bank, essentially, came to a standstill, profits from loans all but disappeared. To this day, those large-scale banks are still struggling to pull yields from those same-era loans.

To the contrary, those who are in the business of private lending can see incredibly lucrative returns. All-in yields of around 8 percent are normal with these loans, sometimes accruing even higher profit percentage rates (spread, interest, junk fees). When you compare that to the dismal 4 percent regularly touted by investment-grade firms and corporate bonds, it’s no wonder why private collateralized lending is enjoying its current hay day.

For outsiders, e.g. borrowers who are looking for loans collateralized by real estate assets, the benefits of these private lenders are nearly endless. For one, credit ratings are often not nearly as important in underwriting, due to the collateral and high-security nature of those loans. It’s obviously not the borrower that’s anchored to the loan. It’s the asset. Rates are also typically higher on these financial products. A caveat to the risk vs. reward profile.

Also, unlike bonds, private loans aren’t generally traded in the open market, meaning their interest rates and financial fragility will stay intact over the duration of that loan. These loans, too, aren’t commonly held on the books of a private lender. It’s common to see heavy paper trading of these debt instruments between private financial institutions the second they are funded. It’s a capability that lenders with lower capital costs can enjoy the luxury of profiting from.

Why is this important? Well, in a very compact nutshell, it means this: Your loan (or loans) aren’t bunched together with other financial assets associated with a said private lender. So, heaven forbid that private entity goes under, your loan is associated with company quotas, revenues, etc. when they do inevitably file and fold — the assets still stand.

It just so happens the larger banks are also noticing a favorable risk vs. reward profile — and investing heavily. Prior Blackstone, KKR and Goldman Sachs employees have created young startups and are amongst industry veterans that have amassed $9.5 billion in private assets over the past few years.

The Future of Fix & Flip Collateralized Lending
is ripe for the picking

Private lending is booming and likely on the cusp of a major market shift. The unregulated nature of our industry probably won’t last, however it’s favorable to lenders and even real estate investors who don’t check the normal financial product (QM) lending boxes. Big financial institutions rarely touch these funding scenarios or our financial products, but are clearly interested in the upside.

There are ~1.3m realtors in the US. The profound industry question is, how do you find those individuals sourcing investment opportunities in the real estate market? They self identify as investors, yet in most cases have little to no capital.

Upwards of 60% of these “real estate investors” (purchase decision makers) are realtors themselves, or hold a real estate license. They defer to private lenders to save deals falling out of escrow or even to poach an investment opportunity with their advantageous position in finding that property first.

Deal flow isn’t about the borrower. Given that private lending is anchored to a physical asset makes lending an entirely different game. It’s no longer about the credentials, income, credit or liquidity of an individual – but their aptitude and ability to hunt and gather strong investment opportunities on behalf of a private lender. Contrary to industry standards these individuals are your sales team. In the coming months or even years, keep your eyes peeled and stay fully focused on this market opportunity.

 

 

Ryan Roberts

Ryan Roberts is the Sr. Director of Marketing @ Triumph Capital Partners, Triumph recently formed a Joint Venture with Brixton Capital, a San Diego based real estate investor and operator. The firm’s principals have a combined 40+ years experience in property development and real estate finance. Brixton’s portfolio totals 10M+ square feet and is valued in excess of $1.4 billion. Reach Roberts at (616) 635-9732 or [email protected]

 

The Best Inheritance You Can Leave Your Kids

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By Fuquan Bilal

What inheritance are you leaving your children?

I know you would probably expect me to say “mortgage notes,” or “passive income properties.” Those are great investments. They might be some of the best types of assets to pass on in an estate. Yet, there are some things which are far more important!

Financial Independence

We all know school has become all but worthless. With the exception of those schools and colleges the big funds and local governments which have turned into cash flow centers and real estate investments. You can do 13 years at school and walk out not even knowing how to use a debit card.

Savvy parents are working harder than ever to teach their kids about money. About how to budget, save, invest, make sure they understand the benefits of financial stability. Some are even teaching them about self-directed IRAs.

Those things are all important. I do all of those things.

Yet, I believe there is something even MORE important. That is teaching them how to be independent.

After all, that’s our one main job as parents. It is to teach them how to survive and thrive on their own.

Instilling Independence in the Next Generation

I rented some units to some college kids. It was amazing to see how they were still clinging to their parents for support at 19 and 20 years old. I don’t know about you, but I was far more independent and had to do a lot more for myself since I was 15. Maybe even 11.

I learned the value of work and hustle at a very young age. I did my own laundry and learned how to cook at 11, and handle personal hygiene.

My kids are now 10 and 16. We used to play mental math games on the way to school. I’ve had them plan meals, go to the grocery store and hunt for deals, and now figure out how to do it all online. I teach them real estate and how to get out in the field.

I’m pretty sure they can stand on their own two feet if they had to.

I want to be sure they won’t have to depend on others for the rest of their lives. Even on me. Knowing how to invest is a big part of that, but mindset is even more important.

Take the Lead

As I reveal in my new book, you can, and should pump positivity into them as possible. Build their minds and spirit. Let them know they can do anything they want. BUT – you’ve got to live it too. Practice what you preach. You can rock their world and shake their mindset big time. Do it well, and consistently and they can also become some of your best accountability partners! They’ll keep you in check.

Lead by example. Do what you want them to do, and explain it. That means budgeting, investing, following your dreams, and stepping up to do difficult things. Teach them to embrace adversity and challenges in order to get stronger in all these areas, so they can get more of what they want and are capable of.

Teach them smart investing and money management and how to stand on their own, who they can get help from and learn from, and to problem solve. With these, they’ll be able turn the smallest monetary inheritance or property portfolio into even greater multigenerational wealth. Failing to do this, and ignoring these conversations while you have the chance, your heirs can blow your multi billion dollar inheritance, property empire and lifetime of discipline and sacrifice in a matter of months.

What inheritance are you leaving your kids? I’d love to know what do you do to build these things into them.

Investment Opportunities

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

Fuquan Bilal

Fuquan Bilal founded NNG in 2012 with the principal mission of capitalizing on the growing supply of mortgage notes in the interbank marketplace. Mr .Bilal utilizes his 17 years of residential and commercial real estate success to identify real estate opportunities and capitalize on them. To date, he has successfully managed three private mortgage note funds that primarily invest in singlefamily performing and non­performing mortgage notes. His financial acumen and proprietary set of investment criteria enable him to purchase underperforming real estate assets at a deep discount of face and market values, thereby increasing the value of the assets. This, coupled with his ability to maximize the use of leverage, enables him to build strong, secured portfolios with solid passive income flows.

“T” Is for “Time”

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By Jeffery Watson

Time can be the investor’s greatest ally or the procrastinator’s worst enemy.  Across America, thousands of baby boomers are waking up and realizing they have not used time to their advantage in building wealth and saving for retirement.  In my Roth Theorem, the Enhanced Rate of Interest (EROI) over a long period of Time (T) is a tool that works to build wealth for you.

I often speak to investors who have what I refer to as “one-hit wonders.”  They have been able to put some money to work for a time making a 15-18% rate of return on it, but the length of time the money was out working was measured in months rather than in years.  Compare that to another client of mine who very deliberately and calculatingly worked on an investment to have his self-directed retirement funds earning approximately a 15% rate of return for the next dozen years.  The amount of money he put to work in that transaction was sizeable, nearly a 6-figure sum.  That client understood the importance of getting time to work in conjunction with the enhanced rate of return to generate the type of wealth building he was seeking.

Time has been written about in many different ways in literature, in both negative and positive contexts.  When it comes to investing, I want you to think about how to make time an ally, something that works for you, by using it to put money to work in good investments earning an enhanced rate of interest (EROI), and then letting those investments move forward with earning you more capital to deploy into new deals.  You may want to stagger the dates of maturity of your various investments so you always have most of your money out working.

One of the best time management techniques I’ve seen is from an investor who has a “waiting list” of good opportunities and investments.  As his money comes back from his deals, he puts it back to work relatively quickly in deals that are working for 18-24 months at a time.  This allows that investor to consistently work his money while keeping it diversified and actively working.

Think about how you can make time an ally in your overall investing strategies.  If you feel you are short of time and retirement is rapidly approaching, or you may need to work beyond age 65 or 67 to accumulate more wealth to be able to retire, please remember not to sacrifice the quality of your investments in an attempt to get an unusually high rate of return.

Jeffery S. Watson

Attorney

Jeffery S. Watson is an attorney who has had an active trial and hearing practice for more than 27 years. As a trial lawyer, he has a unique perspective on real estate investing, wealth building and asset protection. He has tried over 20 civil jury trials and has handled thousands of contested hearings. Jeff has changed the law in Ohio 5 times via litigation or legislation:

Smith v. Rudler – 70 Ohio St.3d 397
In re Hugley – 629 N.E.2d 1136
Bahr v. Progressive Insurance – 2009-Ohio-6641
Snyder v. Snyder – 865 N.E.2d 944
H.B. 463 amending the Ohio Civil Rights Act

Jeff has also been a real estate investor since 1994, investing in both residential and commercial properties. He currently represents established real estate investors in commercial and residential matters when the transactions involve self-directed retirement accounts. As a frequent and popular guest speaker and teacher on stages and webinars, he is a recognized thought leader and innovator in the field of real estate investing, wealth building and self-directed retirement account transactions.

He is a nationally-recognized authority regarding regulatory concerns with wholesaling. He was the co-creator of the Option Contract method that revolutionized the short-sale flipping process. Thousands of investors have used documents created by Jeff to flip properties.

Jeff is general counsel to the National Real Estate Investors Association. Jeff is general counsel to and a cofounder of Realeflow, LLC, which made the Inc 500 list in 2011. He currently advises six different national organizations with a combined membership of over 250,000 investors.

From 2010 to present, Jeff has led lobbying efforts in Washington, DC on behalf of real estate investors which has brought about several changes in both government regulation and policy on distressed property purchases and resales. In 2014 and 2015, his efforts on Capitol Hill helped bring about change in the U.S. tax code and helped reinstate the Mortgage Debt Forgiveness Act. Since 2015, Jeff has worked to secure passage of the Seller Finance Enhancement Act.

Jeff’s efforts to secure reform in the real estate arena aren’t just on Capitol Hill. In his home state of Ohio, he has worked with the Ohio Division of Real Estate teaching on the legality of wholesaling.

He is a part owner of Venture Land Title II, LLC, and his law firm prepares deeds and other documents for two title companies. He is also legal counsel to a number of other organizations including Eagleville Bible Church, Inc.

Jeff is the author or co-author of 6 digital books:

  • “Understanding Self-directed Individual Retirement Accounts”
  • “A Guide to Private Lending”
  • “Short Sales Done Right – How to Profitably and Legally Navigate the Short Sale Jungle”
  • “Death of the Land Trust … in Short Sales”
  • “How to Hire Your ‘Dream Team’ ”
  • “Understanding the Foreclosure Process”

In addition to his digital books, Jeff authors an email newsletter twice a week and maintains a blog at WatsonInvested.com on investing, business and entrepreneurship which are read by thousands of successful investors.

Warning to All Renters: Renting a House Could Cost You A Million Dollars

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By Lex Levinrad

The Distressed Real Estate Institute has a report called “Warning to All Renters: Renting a House Could Cost You a Million Dollars!”

The report was based on the findings of a Distressed Real Estate Institute study that looked at data on thousands of single family homes in South Florida. “We looked at historical price data for these houses and completed a market analysis of how a typical first time home buyer could benefit by purchasing one of these houses today instead of renting the same house” said Lex Levinrad Founder of the Distressed Real Estate Institute.

“What we found is that prices have actually declined so much in South Florida over the past few years that in many cases it could actually be cheaper to purchase the house than to rent it” said Levinrad. “Even after accounting for property taxes and insurance in many instances it could still be cheaper to purchase a home than to rent it”. “This is a great time to buy real estate – especially if you are a first time home buyer and you can qualify for an FHA loan” said Levinrad.

The basis of the study was a comparison of the costs of a typical 3 bedroom 2 bathroom South Florida house which would appraise for approximately $100,000. There are houses in this price point in many South Florida Cities especially in Broward County cities like Fort Lauderdale, Pompano Beach, Margate and Deerfield Beach. These houses would typically rent for approximately $1,100 per month and would cost about the same in monthly mortgage payments if they were purchased with an FHA Mortgage Loan. “Our specialty is low priced single family starter homes which are most attractive for renters and first time home buyers” said Levinrad. “We know this market well because we purchase these houses directly from the bank and we often fix them up and then sell them to first time home buyers or renters that are looking for a rent to own home”.

“Many people that are currently renting in this price point have decent credit and could get approved for an FHA Mortgage” said Levinrad. “They simply do not know that they can afford to own their own home and in most cases there is no one that is marketing to them and informing them of this fact”.

The findings of the study indicate that a typical $100,000 house could be worth as much as $1,000,000 by the year 2041. This is when the 30 year FHA mortgage would be paid off assuming that they purchased in 2011. “Owning real estate always pays off in the long term” said Levinrad. “People have very short term memories and ten or twenty years from now they will wish they had purchased a home.  Making the decision to buy a home versus continuing to rent will result in a substantially better retirement” said Levinrad.

“In many cases this will be the only opportunity in their lifetime to purchase South Florida Real Estate at an affordable price where the monthly payment could be the same amount or even less than the equivalent rent. This market crash and foreclosure crisis has created a unique situation where for the first time in many years housing is actually affordable. It is a great time to buy real estate – especially for first time home buyers” said Levinrad.

 

Choosing the Road to Wealth

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By Kathy Kennebrook (The Marketing Magic Lady)

More people are becoming millionaires today than ever before in the real estate business. So what makes these wealthy entrepreneurs so different? They chose the road to wealth and real estate as the vehicle to get there.

When choosing the road to wealth, there are some important distinctions that set the truly successful folks apart from everyone else. Some of those include the ability to visualize a specific outcome, pursuit of a dream, constant motion and a relentless determination to reach the goal. Giving up is not an option. Like the saying goes, “Quitters never win; winners never quit!”

I have found in the real estate business that there are two kinds of people, the “doers” and the “wannabes”.  There are truly focused folks who get up every morning with a clear and defined direction who want to make their business work no matter what it takes. They pursue their dream relentlessly and continue to grow on a daily basis, garnering all the education they can along the way to take them even further along in their business.

Then there are the people who go to seminars or buy books and tapes and do absolutely nothing with them once they get them home. I have personally witnessed this over and over again.  They have one excuse after another why they can’t do this business.  For them, the status quo is the easy way in any situation.

I used to be one of those people who did absolutely nothing. I continued to work day after day at a job I hated, and I had every excuse there was for not getting started in the real estate business.  So I can relate. You could say, “I’ve been there, done that.”

There were three main things that held me back:

  1. Lack of focus.
  2. A true desire.
  3. Abundance of fear.

You can absolutely tame all three. I am living proof that you can. The biggest change that occurred for me finally was the desire to succeed.  An even greater desire was to get back all the money I had spent on courses and seminars.  As I always say, “Whatever it takes to make you move forward!”

I discovered there were some very easy ways to get focused and get on track.  One was to define the specific reason I wanted to succeed.  For me it was to get back the money I had already spent on educational materials and to get rid of a job I hated.  At the time, my job entailed being on the road for long periods each week which resulted in my not being home much, something I very much wanted to change.  I spent many years in a “dead-end job” making a lot of money for other people.

For you, it may be putting money away for your kid’s education, taking a trip you’ve always wanted to take or maybe becoming involved in charities you want to support. Whatever that reason is for you, commit it to paper and out loud to those around you. There is nothing I know that will force you to take action more than committing to a goal out loud. Become persistent in the realization of your dream. Use the knowledge you already have and move forward from that point.

Visualize your success!  Every extraordinary, successful person has visualized their success in their mind and then on paper first.  Their dreams were put into action, resulting in a reality of success.  Bottom line, this is the outline of the road to wealth.  Unfortunately, most people get stuck in the “dreams” part of that road to wealth.

Enlist the help of your local real estate club or a mentor to stay on track. If there isn’t a real estate club where you live, contact other investors in your area and form your own group. This is a great way to network and get the support you need. I had a mentor early on in my business and I attended meetings of our local real estate club on a regular basis. I found this to be a great way to stay focused and excited about the real estate business.  I continued to work with other investors in my area who were already doing the business.

If people around you are telling you it won’t work, don’t let them “steal your dreams”. Only you can make the decision to be financially free. I know that lots of my friends and family members thought I was crazy to want to do this business. I’m glad I didn’t listen! Hang around with like-minded people, wherever you can find them. Learn from people more successful than you.  Hang around with people who make more money than you do. Decide what it is you want to do for your business on a daily basis and implement a plan of attack.

Enlist the help and support of your spouse and children or a partner while growing your real estate business. There are lots of things they can do to help and you’ll achieve a feeling of team work which will keep you moving forward. Write a specific list of goals you want to achieve, no matter how small. Set goals for tomorrow, next week, next month, next year. This is one way to create a road map you can follow toward attaining your goals and growing your real estate business.

Do whatever it is you need to do to keep moving in a positive, forward direction. Don’t let the “naysayers” get you down. They just want to keep you where they are. Don’t take advice from anyone who makes less money than you do. You have a right to live the kind of life you want, so be willing to do what it takes to attain it.

Real estate is one of the best ways I know to grow wealth quickly. If you believe you can’t change your attitude about the opportunity to create wealth through real estate, I assure you that you can. You just have to make the decision to choose the road to wealth.

That road to wealth is to stay focused and to never give up.  Success can be yours…today!

For more information on Kathy Kennebrook’s systems for the Real Estate Investor be sure and visit her website at www.marketingmagiclady.com. While you are there be sure and sign up for Kathy’s FREE monthly newsletter and received $149.00 of real estate tools absolutely FREE!!