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THE IMPORTANCE OF A TITLE SEARCH IN BUYING INVESTMENT PROPERTIES

By Glenn Mananeng

It’s important that when buying a potential investment property, there are no legal issues that may arise after it is purchased. With that in mind, properties with a clear title is very important. Unique Wealth Education is here to let you know the ins and outs of a title search.

Who does a title search?

Title company – they conduct extensive research on the property using public records and legal documents to identify the owner, liens, and if there are any loans and property taxes due.

Lender – they conduct a title search to verify ownership of the property and any other judgements for or against it before approving a loan that uses the property as collateral.

A buyer can also do a title search on their own, although it’s not usually recommended. Not only is the process time-consuming, you’ll be prone to making some kind of mistake along the way if you don’t have the knowledge needed when it comes to legal matters. However, this should not hinder you from wanting to know the basics of a title search. After all, you want your purchase to have no strings attached as much as possible.

Understanding the basics of a title search

This will minimize the chance of you regretting the property after acquiring it. The process won’t be as complex and tedious as it usually is if you do it the right way.

STEP 1: Chain of Title

The “chain” refers to a sequence of transfers pertaining to the historical ownership of the property. This will show the list of owners from the current one back to the original owner when the property was first built. This can be obtained from your County Clerk’s public records.

Back then, this step took too much time cause you had to check records dating back to almost 100 years in order to complete the search.

The importance of this step will determine the credibility of the property title. If you happen to pass by a “cloud” or any missing part of the chain, this might indicate that an incorrect deed was done during somewhere along the way. This could also mean that the owner changed their name to reacquire the title. In this case, a quiet title suit is done as a security measure.

Quiet title suit – this is done in order to settle any dispute over the ownership of the property. Think of it as reinforcing the weakest part of the chain so it won’t break. The owner goes to court and describes all of the title defects with an attorney. The judge will “fix” these defects with a court order declaring that the claimant (in this case, the current owner) is now the true owner of the property.

STEP 2: Tax Search

The second step of the title search determines whether the property is up to date with its taxes. Any overdue or unpaid taxes can create a lien against the property. Let’s say that you finally purchased the property and you skipped this step, this can lead to the government placing it up for sale again just to cover the unpaid taxes.

Title insurance – this is done to prevent any overlooked late or unpaid taxes on the property and make it as clean as possible. Without this, the financial burden will be transferred to you as the buyer.

STEP 3: Site Inspection

Inspecting involves a lot more than just dropping by and checking if the property is ok. This should be done to make sure everything matches the records of the property such as the lot size or any signs of an easement. When you are granted an easement, this means you have the legal right to use or enter the property of the owner without possessing it. These are typically granted for utility companies and are usually not removable.

STEP 4: Name and Judgement Search

Any judgement or state and federal tax liens against the current or previous owners must be looked up. It’s up to the current owner to settle any of these judgements or state and federal tax liens found while owning the property. Judgement decrees, unpaid taxes, and liens can have claims over the property. In other words, these defects can complicate your ownership even after purchasing it. A title insurance policy is a good preventive measure against these judgements and insures these items are removed at the time the policy is issued typically at the closing of the sale.

STEP 5: Closing the Deal

The final step is the green light for the buyer to begin the process of purchasing the property with a clear conscience knowing that all legal hurdles have been cleared. Once the deal has been closed, the title company issues a title policy.

Title policy – is the title company’s guarantee that protects you as the new owner in the event that any unknown issue affecting the property comes up after it’s purchased.

Following all of these steps will ensure a smooth transaction between you and the seller. Although we mentioned that a third-party entity usually does this on your behalf, it doesn’t hurt to know the legal aspects of this very important process. Contact us by phone: (734) 224-5454 or email: info@uniquewealtheducation.com. We also invite you to our monthly meet-up every first Thursday of each month to share experiences and hopefully do business with fellow real estate investors.

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BUILDING WEALTH IN REAL ESTATE: HOW LONG DOES IT TAKE?

By Glenn Mananeng

This is a question on the mind of investors. There is no definite answer for this. This topic is always up to debate no matter how you look at it, as wealth is measured differently by every individual. Here are a few factors you need to know when building wealth – allow us here at Unique Wealth Education to teach you some important pointers to consider:

#1 Wholesaling

This is the easiest point of entry for the majority of the investors, as it requires the least amount of capital. You find a seller who wants to put their property for sale and find a buyer for that property on “as is” condition without the fixing part to try and get the market value higher. After the property has been sold, you’ll get a cut on the sale. Basically you are the intermediary that builds a buyers list to locate undervalued properties using a multi-pronged approach. This relies heavily on how good and how broad your real estate network is.

#2 Fix and flip

You don’t have to be an avid real estate investor to know what fix and flip is. Anyone who has cable and passed by HGTV has a basic idea of what it is. You buy a house below the average market value, renovate it, sell them for a profit! This is one of the most widely used real estate investment strategies used around the county.

Keys to fix and flip investing success:

· Preparing yourself by understanding how to locate undermarket valued properties in the right locations
· Understand values (make sure you are comparing apples to apples and going with the highest comp when doing our due diligence as a conservative approach)
· Aligning yourself with multiple capable and competitively priced renovation contractors to not only give you a bid prior to purchasing the home, but also to deliver as agreed on
· Understanding how far to go with finishes and layout changes to keep within the budget and comps in the area
· Stay away from potential losers such as foundation issues and bad layouts
· Having a sales strategy in place prior to the purchase that accounts for commissions, closing costs, holding costs, etc…
Contrary to “reality” real estate shows, getting rich doesn’t happen overnight. The longer it takes to flip the property, the more expenses you would incur for maintaining it while waiting for a buyer. Working with getting coached by or partnering with a seasoned investor is a huge advantage, as you learn best practices and pitfalls to avoid, which only years of experience can provide.

#3 Rentals

Mortgage Paydown

Let’s use a rental property as an example. In a normal scenario, you have a tenant who is essentially paying the rent in exchange for living privileges. If you bought the rental property with a mortgage, your loan will eventually cancel itself out over time. Why? The rent you receive from your tenant is basically used to pay the loan, which is increasing your equity in the property. The money left over is your cash flow divided by the amount you put down to come up with your CAP rate. This is a GREAT way to build long term wealth.

Cash Flow

We can all agree that this is very important. For those who are new in the game, cash flow is basically the income you get from your investment property (usually rental properties). This is a major factor in generating a high return for your investments and savings. Once you increase cash flow by accumulating properties, this allows you to plan your income and determine the course of future investments.

Taxes

If taken into account optimistically, you’ll see a lot of tax benefits when it comes to real estate investments. Consult your CPA to see how you can depreciate properties that you are holding onto for rental income and also discuss with them acceleration methods used to front load depreciation to give you more capital to buy more and keep building your portfolio.

The answer to how long it’s going to take, as you might’ve guessed already, is up to you. Your real estate skillset, determination, experience, and risk management are major players in this ballgame. it’s all about how smart you invest in the industry. If you make due diligence and play your cards right, you’ll one day realize that you’ve gained a considerable amount of wealth already. Unique Wealth Education can help you in your real estate career in helping you avoid common mistakes & pitfalls, is something that we take to heart very seriously. Contact us at(734) 224-5454 or email us at info@uniquewealtheducation.comto learn more.

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Overcoming The Unknowns of Texas Tax Deed Sales

By Arnie Abramson

Texas has a thriving economy, population growth and an incredible rental market.  It also has a tax sale structure that is very, very investor friendly, which makes it very attractive to tax lien and tax deed investors alike. But sometimes people don’t profit as much as they could (or may even lose money) because they don’t understand all the nuances of investing in Texas tax deeds.

For example:

Texas is a tax deed state and when you buy a property at the auction it is a judicially caused foreclosure and you get a deed to the property.  You buy the property – not the tax lien. 

The auction bidding starts with the amount owed for taxes plus administrative charges, and the price of the property is bid up from there.  The winning bidder gets the property but the former owner has the right to buy it back, or redeem it.  The redemption period is either 6 months or 2 years, depending on whether or not the property is a homestead, mineral lease or has an agricultural exemption. But, regardless of the duration of the redemption period, it is unlikely that a title policy can be obtained prior to 2 years.

If the previous owner or lien holder does redeem the property, they must pay the investor their costs plus 25% if they redeem in the first year, and 50% if in the second year.  This is a penalty, not an annualized interest rate and it is not prorated, meaning that if they redeem it the month after you buy it you get the entire 25% profit.

Therefore, it is best to buy the properties and rent them out at least until the 2 year period is over.  While this is what we do for our clients, and their returns are almost always in double digits, there is one BIG CATCH!

Until you buy the property and are the owner, you are not allowed to disturb the occupants of the house and it is deemed trespassing if you do (Remember, this is Texas-you do not want to trespass).  What this is means is, THERE ARE SEVERAL UNKNOWNS ABOUT THE PROPERTY UPON WHICH YOU MAY WANT TO BID!

IS IT OCCUPIED OR VACANT?  It is very easy to be fooled when the neighbors park a car in the driveway, cut the lawn, and maintain the outside appearance.  I started buying tax sale properties in Texas in 1992 and I have been fooled by neighbors that do not want to “advertise” a vacant house on their block.

WHAT IS THE CONDITION OF THE INSIDE OF THE HOUSE?  This may be the most important unknown of all.  From the outside, you may not know whether it needs $1,000 worth of work or $30,000, or even more.  Remember, you are advised not to knock on the door and ask to see the inside of the house.

WHAT WILL IT RENT FOR?  MLS, Zillow, etc. are not always accurate.  Remember, you do not know when it was last refreshed, rehabbed or even if everything works.  Many investors do not list their houses for rent on MLS so they are not always so accurate either.

WHAT WILL BE YOUR TOTAL OUT OF POCKET COST?  How would you know if you do not know how much rehab is necessary?

WHAT WILL BE YOUR CASH FLOW AND ROI?  Let’s see, if you do not know how much it will cost you nor what the rent will be, it might be pretty tough to know how much cash flow you will have and what your return will be.

Let me summarize with a question.  WHEN WAS THE LAST TIME YOU BOUGHT A HOUSE WITHOUT YOU OR ANYONE YOU KNOW SEEING THE INSIDE?

The correct answer usually is NEVER!

So, we now know some of the unknowns that can burn you, how are they overcome?

SIMPLE.  GET SOMEONE ELSE TO BUY THEM FIRST SO YOU CAN TURN THOSE UNKNOWNS INTO KNOWNS!

THATS EXACTLY WHAT WE DO FOR YOU !

In fact, that is so simple we call it the TEXAS 2-STEP FOR TAX SALES !

STEP 1.          WE BUY THE PROPERTY

STEP 2.          WE OFFER IT TO OUR INVESTORS AFTER IT HAS BEEN INSPECTED, REHABBED AND RENTED.

Guess what?  You then know that it is occupied, rented, what your total out of pocket cost will be and what your cash flow and return is.

It is completely TURN-KEY!  We do all the work for our ”priority members”.

Other programs offered or to be offered starting in January are:

All day workshop teaching about and how to purchase tax dees in Texas.

Learn and Earn program that pays you while you learn.

Sharevestor for smaller investments to partner with us.

List of services to do what investors want to outsource.


Arnie Abramson

Before becoming a Texas real estate investor in 1991, Arnie Abramson had successful careers as a financial planner and Vice-President of Marketing for a national real estate management company that marketed public Real Estate Limited Partnerships.  He began buying houses at Sheriff Sales in 1992 and has been an investor, landlord, mentor, educator, speaker and property manager for over twenty years.

Arnie is a national speaker on Texas tax deed sales and is the Texas provider for tax deed purchases for several of the national tax lien gurus seen on the Internet.  He is past president of the Texas Real Estate Investors Association (TxREIA), on the Advisory Board of several REIAs  and was a co-founder of the REI EXPO.

His company, Texas Tax Sales Resource Group LLC, HAS THE ONLY COMPLETELY TURN-KEY PROGRAM THAT COVERS THE ENTIRE STATE OF TEXAS.  This includes the research, due diligence, previewing, bidding, inspecting, rehabbing, renting and management of the properties purchased at the Texas tax sales.

Arnie was a speaker at the recent Lone Star Real Estate Expo in Texas and will be participating in future Realty 411 Expos in the near future.

For more information, contact Arnie Abramson or visit the website at www.txtaxsales.com.  His direct email is arnie@txtaxsales.com

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Double Your Return With a Tax Efficient 401k Strategy

By Clint Coons

Most real estate investors are aware they can use their self directed IRA to invest in real estate.  I have quite a few posts on this topic.  If you are familiar with any of these prior posts you probably know I am not a fan of the self directed IRA unless you are dealing with ROTH funds or you plan to buy and hold one property for an extended period of time.  Outside of these two situations I believe the risks of investing through a self directed IRA do not justify the risks given the IRS current interest in these transactions.  My preference is, and will remain, the Qualified Retirement Plan (Profit Sharing Plan or solo 401k) which offers the same, and many more, benefits over the self directed IRA.  Rest assured this is not another post on why you should avoid self directed IRA, you can read these prior posts if you are in doubt, but a strategy wherein you can partner with your QRP to buy real estate.

Consider John who would like to purchase a house for $200,000.  John has a QRP with 150k and personal funds of $100,000.  John could purchase the house in his own name with financing or he could partner with his QRP to buy the house.  To partner with his QRP John and his QRP would need to form a LLC and divide the ownership proportional to the contributions from each member, i.e., if John contributes $70,000 and his QRP contributes $130,000 then the ownership would be divided as follows:  John 35% and his QRP 65%.

If you are familiar with LLCs and their creation, then you should know profits will be split based upon ownership percentages.  If John’s LLC generates $20,000 then John will receive $7,000 and $13,000 will be distributed to his QRP.  From a tax standpoint, John will have taxable income of $7,000 and the QRP will not have any taxable income from its $13,000 in earnings.  Straightforward right. How about the losses?  If you recall, real estate is depreciated over 27.5 or 39 years depending on its characterization.  Depreciation is often referred to as a paper loss because it can be used to offset your real estate income.  In my example, the 200k house (175k allocated to depreciable structures and $25,000 to land) will generate approximately $6,400 per year in depreciation.  John’s will receive $2,240 of the deprecation thereby reducing his income from $7,000 to $4,760 and his QRP will capture the remaining $4,160 depreciation.  This of course does not benefit John because his QRP does not pay tax on its portion of the income.

Wouldn’t it be more advantageous if John could allocate all of the losses to him where then can be utilized.  Of course it would and you can if you use an Anderson Tax Efficient LLC.  An Anderson Tax Efficient LLC will allow John to take full advantage of all the real estate depreciation by specially allocating all the losses to John. The following table shows the tax advantage of using such a structure:

Without QRP

$20,000 net rental income

<$6,400> depreciation

$13,600 taxable to John

<$4,080> taxes

$9,520 net income to John

With QRP W/O an Anderson Tax Efficient LLC

$20,000 net rental income

$7,000 allocated to John

<$2,240> depreciation

$4,760 taxable to John

<$1,428> taxes

$16,332 net income to John and his QRP

With QRP and Anderson Tax Efficient LLC

$20,000 net rental income

$7,000 allocated to John

<$6,400> depreciation

$600 taxable to John

<$180> taxes

$19,820 net income to John and his QRP

9520 x (X)=19820

Partnering with your QRP can produce some desirable tax benefits and opportunities to increase you’re your overall investment portfolio.  However, this is not something you should set up without the assistance of our firm or another qualified advisor experienced in the tax aspects of LLCs and QRPs.  If you would like to explore the creation of this structure, please call my office to schedule a consultation.

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Incorporating in Nevada

By Jay Butler

During the 18th century, corporations in America were formed by an act of congress for public projects and services, such as the building of damns or creation of manufacturing jobs.  Charters were revoked for the violation of law or upon the life of the project.

Originally owners and managers of corporations were held liable for the mismanagement of all company affairs and criminal acts. These corporations could not own stock in other companies, possess ownership of non-essential property, nor make political or charitable contributions to influence law-making decisions within the legislative branch of the United States government.

Large central banks didn’t care for this and pushed New Jersey representatives to pass legislation called the General Revision Act in 1896, which privatized corporate charters.  Delaware passed similar laws shortly thereafter and became known as the premiere state in which to incorporate in America for the next 101 years.

In 1997 Delaware began disclosing stock ownership information with the Internal Revenue Service and, combined with an 8.7% state corporate income tax rate, may no longer be the best choice for forming a private corporation.  However, Delaware has some of the best anti-takeover clauses in the United States and is a worthy consideration should you wish to take your company public.

Wyoming has risen through the ranks as a viable alternative state in which to incorporate.  Although they disclose available stock ownership to the IRS, Wyoming does not keep any records on file and therefore has no available information to disclose. It is a very clever strategy and certainly places the low cost of incorporating in Wyoming above most other every state in the union.

Nevada improved upon Delaware laws when forming their Nevada Revised Statutes in 1987 (later revised in 2001), wherein personal liability protection is determined by state statute and not by judicial determination on a “case-by-case” basis as in California courts.  In Nevada, individuals are not subject to the unpredictable rulings applied by any particular judge, rather one can count on stable outcomes based on foreknown Nevada state law.

Nevada has developed a strong precedence for protecting the corporate veil, making it the most difficult to pierce of any state in the country. In fact, since 1987, only one Nevada “C” corporation has ever had its veil pierced. [Polaris Industries Corp v. Kaplan]. Under NRS 78.747 the protection and anonymity for officers, directors and stockholders in Nevada “C” corporations are unparalleled with any other state in the union as the nearly insurmountable burden of proof rests entirely on the Plaintiff to prove all three of the following NRS requirements to pierce the veil.

1.) The corporation must be influenced and governed by the person asserted to be the alter ego. When a corporation is not operating as a true legal entity and is being used by its shareholders as a “shell” to control private interests and assets or debts, the corporation is said to be the “alter ego” of its shareholders. A corporation may appear to be the alter ego of its shareholders when:

  • No directors are elected;
  • No corporate records are kept;
  • No records are maintained by the shareholders;
  • Personal funds or assets of shareholders are co-mingled with those of the company;

(e.g. no separate bank accounts).

If the shareholders have themselves disregarded the corporate form, the law will disregard the entity and shall not offer shareholders the protection normally granted to the corporation.

2.) There must be such unity of interest and ownership that one is inseparable from the other;

3.) The facts must be such that adherence to the corporate fiction of a separate entity would, under the circumstances, sanction fraud or promote injustice.

After the deplorable June 24th, 2010 Florida Supreme Court Ruling in Olmstead vs. FTC, Nevada amended their charging order protection under NRS 86.401 to specifically provide single-member limited liability companies the same exclusive remedy for a judgment creditor as with multi-member LLC’s.  And with legislation enacted on October 1st, 2011, Nevada went a step further under NRS 78.746 to become the only state in America extending such charging order protection to “C” Corporations.  Now Nevada “C” corporations are afforded the highest degree of protection from lawsuits filed by disgruntled creditors and zealous attorneys.

Tax, what tax?  The great state of Nevada has no gift tax, no sales tax, no luxury tax, no property tax, no franchise tax, no capital gains tax, no succession tax, no tax on corporate shares, no individual income tax and no corporate income tax for entities whose gross revenues do not reach or exceed $4 Million per annum.  Nevada entities are only subject to Federal income tax IF the respective entity has a profit upon reaching its fiscal year-end.

Nevada corporate stock holders and directors are not required to be U.S. citizens and meetings may be held by proxy anywhere in the world.  Nevada requires no minimum paid-up capital and there are minimal reporting and disclosure requirements.  Only the names and addresses of the corporate officers, directors and resident agents are on public record, but again Nevada recognizes privacy and permits the use of nominee officers and directors.

The primary business which may be exempt from paying the annual Nevada state business license fee under NRS 76.020 are government entities, non-for-profit organizations, motion picture studios, and limited types of insurance companies.

Choose a jurisdiction in which to incorporate wisely and always be sure to “Cover Your Assets”.  Please contact our offices today at https://www.assetprotectionservices.com/apsa/contact/contact-us.php to receive your free private consultation and for assistance with forming an entity in the state which best suites your needs.


Asset Protection Services of America

701 South Carson Street

Suite #200

Carson City, NV 89701-5239

Office

(775) 461-5255

Fax

(775) 461-1155

Mobile (239) 309-8214

Skype Jay_Butler

E-Mail info@AssetProtectionServices.com

Website www.AssetProtectionServices.com

 

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So Many Ways to Buy

By Bruce Kellogg

#1 – Cash Purchase

This is the simplest method: write a check, wire the funds, etc.  But more needs to be known etc.  a) The investor needs to calculate their percent cash return on their cash invested in order to compare with other investment opportunities in front of them.  b) When buying with cash, try for a price discount.  Don’t pay “retail” unless you have to.  c) After buying with cash, take out a credit line on the property for security if times get tough.  Credit unions are good for this.  In tough times, banks often reduce or cancel credit lines, which makes banks unreliable when you need them.

#2 – Assume an Existing Loan

This involves applying to the existing lender to replace the existing borrower.  You will have to qualify as a new borrower, and pay fees.  In this low interest rate environment, it can be preferable to simply assume the loan.  Some commercial and private loans are assumable as well as institutional loans on 1-4 residential units.

#3 – “Subject to” an Existing Loan

Unlike formally assuming an existing loan, this method involves taking title to the property without disturbing the loan, and just start paying on it.  Conceptually, it is simple, but in practice it is not.  Most loans nowadays are “due on sale”, so if the lender finds out the property was transferred, they can “accelerate” the loan and call it “due and payable”.  They have the right to foreclose if they are not paid, or a satisfactory arrangement made.

#4 – Create Financing

When a property is purchased, the numbers have to add up.  If the down payment and the existing or new loans do not equal the purchase price, then financing has to be created.  Often, the seller will agree to “carry back” a created loan for the buyer to complete the purchase.  This “note” can be sold, often at a discount, or borrowed against by the seller, so they are not stuck with it.  Or, they might like it and keep it in their pension fund, for example. The terms of the loan are whatever the parties agree, as long as the terms are legal.

#5 – Create a “Wraparound” Loan

One really useful created loan is called a “Wraparound” or “All-Inclusive” loan.  This is where a loan is created that “wraps” or “Includes,” the existing loan(s), which the buyer executes in favor of the seller.  Usually , the “wrap” includes the part of the purchase price that is unpaid by the down payment.  It’s basically the “carryback” amount due to the seller over time.

There are a couple of benefits to the “wrap”.  First, it is a useful way to work with a “subject to” transaction, described above as being somewhat complicated. 

Second, if the “wrap” is written at a higher interest rate than the loan(s) enclosed in it, the seller will receive excess interest above what he is paying out.  Yields can be high with a “wrap” this way.

#6 – “Creative” Financing

This is where real estate gets “creative”.  By legal definition, personal property is any property that is not real property.  Examples of personal property are cash, corporate stock, gemstones, art, vehicles, promissory notes, and so on.  How about, instead of cash, use other personal property for the down payment?  A 4 carat diamond was used to purchase the Mt. Diablo Hotel in Contra Costa County. A mid – 1930’s 40 foot wooden motor boat (gorgeous woods) was used to acquire a triplex in Redwood City.  How about a travel trailer for a down payment?  Anything goes, sometimes!

#7 – Funds From a Whole Life Policy

In most cases, it is possible to borrow from a “Whole Life”  insurance policy and use the funds to buy real estate.  This can be investigated by reading the terms of the policy, and then discussing this with the company.  Repayment will be required, and reasonable interest will be charged, but it’s a good source of funds.

#8 – Invest Using Your IRA

Now that interest yields have been low for so long, people are moving to invest in real estate using their  Individual Retirement Account (IRA).  Investments can be made in real property or personal property such as notes, coins, paintings, securities, and so on.  Basically, the method is to move your IRA account to a “custodian” and have them buy, manage, and sell your properties at your direction.  Custodians are plentiful on the internet, and they have literature galore.  Leverage by borrowing from banks can be used to enhance the return in your IRA.  Your custodian can steer you to banks that offer to do this.

#9 – Cash to New Loan

The most common method of purchasing real estate involves the buyer putting up a cash down payment, then qualifying for a new, long-term “purchase money” loan from a bank, credit union, or mortgage broker.  Sometimes, the seller will make (i.e., “carry back”) the loan.  Usually an institution will fund the loan and either keep it in their portfolio, or, more often, they will bundle it with others and sell it as a security on Wall Street.  This replenishes their lendable funds.

Down payments vary.  Commercial loans are usually 20 – 40% down, depending upon the lender’s guidelines and risk assessment.  Owner-occupied, residential loans can be as low as 0 – 3.5% with mortgage insurance usually required.  1 – 4 unit investment properties typically require 20 – 25% cash down, but no mortgage insurance.  Lenders’ programs vary widely, including rates and fees, so comparison shopping is recommended.

#10 – Gifting

Purchasing as described in #9, above, many times offers the opportunity for the borrower(s) to receive a gift of money toward some, or all, of the required down payment.  Acceptable donors include “a relative”, defined as a spouse, child, or other dependent, or any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship.  A fiancé, fiancée, or domestic partner can also donate.

Lenders will want a “gift letter” signed by the donor stating that repayment of the gifts is not required.  Many lenders will require proof of the funds being transferred, so it is important to learn the lender’s requirements prior to transferring funds around.

#11 – Buy Defaulting Note, Then Foreclose

This method involves buying notes or mortgages that are in default at a substantial discount, then foreclosing to acquire the property.  Notes can be purchased through advertising on Craigslist, newspaper ads, direct mail to purchased lists, or websites dealing with note transactions.  Searching on the  internet will provide organizations with courses on notes.  This method can be highly profitable, but is quite sophisticated.  Additionally, foreclosing on a note usually does not afford the opportunity to conduct inspections, and a title search is essential.  Some states provide a “right of redemption” for the foreclosed borrower to recover ownership, adding further complexity and risk.

#12 – Tax Liens and Tax Deeds

In order to stay solvent, when  owners fail to pay property taxes, countries will issue tax liens or tax certificates which are sold to investors at a certain yield.  Depending upon the state, yields run from 6% to 36%, with 8 -18% being most common.  Under some circumstances, investors can foreclose and obtain ownership of the property.  Searching the internet under “tax liens” will produce teachings and organizations offering to help investors get involved.  Be advised, however, that this axquisition method is also sophisticated and has the same warnings as #11, above.

#13 – “Trade” or 1031 Exchange

A “trade” of real estate involves swapping one property for another.  An example would be if the owner of a vacant lot traded it with the owner of a mountain cabin, probably with some cash changing hands to even out the values.  One party might obtain financing, or one trader might carry back some “owner financing”.  Noteworthy here is that the trade is not a tax-deferred exchange, but just a swap.  These transactions are advertised on real estate and barter websites from time to time, saying “For Sale or Trade”, or similar.

A tax-deferred exchange is a transaction governed by Section 1031 of the Internal Revenue Code and is designed to defer long-term capital gains taxes for the “exchangor”, the one moving up in property.  The properties have to be “like kind”, such as real estate for real estate.  They do not have to be identical types of real estate.  For example, an airport hangar could be exchanged for a duplex.  However, they do both have to be either an investment property, or a property “used in a trade or business”.  So, a plumber who is retiring could exchange his shop building into a fourplex for retirement income.  However, an investment property CANNOT be exchanged into a property that is promptly turned into a residence after the close.  Capital gains taxes will be due.  The Internal Revenue Service (IRS) has issued “safe harbor” guidelines for a successful exchange, so real estate, accounting, and possibly legal experts need to be used.

#14 – Syndication

When investors get together to buy a property, it is commonly called a “group investment”, which is legally termed a “syndication”.  This is usually done to allow the purchase of a larger property and provide “passive” ownership benefits for the investors.  The common types of syndications are:  1) Limited Partnership 2) Limited-Liability Corporation (LLC), and 3) Tenancy-in-Common (TIC).  Each one has an organizer who usually becomes the manager of the project.  An “offering circular” is prepared describing the project, including financial projections, organizations, management, and risks.  Investors sign a “subscription agreement” and contribute their “share” of the project.  Syndicatiions are a “security” under federal and state laws, so there are regulations to be followed concerning marketing, disclosure, handling of investor funds, management, and reporting.  Larger projects typically require the investors to be “accredited”, which necessitates a substantial income and net worth.  Syndications are easy investments, but investigation of the project and the organizer is essential due to the potential for the promoter to take advantage of the investors through slick marketing.  Additionally, if the organizer is honest yet inexperienced, the project could fail.  Don’t be afraid, but be careful with syndications.

#15 – Equity-Sharing

Another method of investing with lots of potential is “Equity-Sharing”.  This is when an investor and a potential homeowner buy a single-family residence together, and the aspiring homeowner occupies it.  They are called the “resident co-owner” (RCO), and the investor is called the “investor co-owner” (ICO).  Percentage shares are negotiable with the RCO paying the property taxes, insurance, loan payment, and routine repairs, while the ICO puts up the down payment.  There is a “Shared Equity Agreement” or “Joint Ownership Agreement”, which sets the term, allocates the income-tax benefits, and specifies how the arrangement is to be wound-up.  One party could buy out the other, or the property could be sold and the net proceeds divided.

Equity-Sharing works well between relatives.  One Lockheed engineer has seven of these going to help his children, nieces, and nephews become homeowners.  College housing is another application where the son or daughter owns part of the house with the parents then rents bedrooms to other students.

#16 – Joint Venture

A “joint venture” is where two parties undertake a project together, such as a “fix and flip” of a property.  One party usually supplies the funds, while the other supplies the expertise and management.  This is often called a “rich man, poor man partnership” and is a great way to get started.  A “Joint-Venture Agreement” describes the arrangement.  These can be found on the internet.

#17 – Contract-of-Sale

The “Contract-of-Sale”, also called “Contract for Deed”, “Land Sales Contract”, or “Land Contract” is a method of acquisition that defers the buyer’s receipt of the deed (fee ownership) until all of the contract’s terms have been fulfilled.  Meantime, the purchaserhas what is known as an “equitable interest”, an interest under the contract.  It is a security device for the  seller who is financing the transaction.  It’s a good method for selling to a buyer with a low down payment or weak credit that can be improved over time.  Since it is a contract, foreclosure requires an action in court.  Additionally, most states have a “right of redemption” where the foreclosed party has a certain period of time to pay the arrearage plus costs and recover the property.  For a purchaser, it is an easy way to begin ownership of a property.  A good practice is to obtain a quitclaim deed and record it if the contract in not fulfilled.  This cleans up the title.

#18 – Shared-Appreciation Mortgage

When the market is appreciating rapidly it is sometimes difficult to convince a seller to sell on reasonable terms, or to carry back owner-financing.  One approach to this is to create a “Shared-Appreciation Mortgage” which the seller carries back.  Usually, it involves a low interest rate, but then gives the seller a percentage of the profit at the end of the loan term.  This approach also works well in a high interest rate environment because it helps the buyer achieve a reasonable cash flow to sustain the property.  A “standard form” for this type loan is not normally available, so it’s best to have an attorney draw one up, or customize an existing one.

#19 – Option to Purchase

An option confers the right, but not the obligation, to do something.  Real estate examples include the option to purchase, option to lease, option to renew, option to extend, and so on.  Usually, a prospective buyer negotiates an option to purchase when they want the property, but sometime later.  They give the owner some agreed “option consideration” for the right to purchase the property on mutually-agreed terms on or before a specified future date.  Option consideration is frequently cash, but it could be personal property, like a used tractor, or even “personal service” where the future buyer fixes up the property before buying it.  If the option is not exercised, the owner is entitled to keep the consideration.  A good practice is to obtain a quitclaim deed and record it if the option expires without being exercised.  This clean up the title.

Options are particularly useful for reserving properties without appearing on the public record until the options are exercised.  Developers do this to accumulate parcels without “tipping off” other players in the market that they are buying.  An individual can negotiate an option in an appreciating market and exercise the option later without the costs of ownership in the meantime.  It’s an excellent way to speculate, and fortunes have been made this way.

#20 – Lease-Option

A lease-option involves leasing and taking possession of the property being optioned.  Prior to exercising the option, the property can be occupied as a residence, or leased to a subtenant.  This is a way to “tie up” a property to take advantage of an appreciating market.

Another possibility is to enter into a contract-of-sale with an owner, then lease-option the property to a tenant.  If/when the tenant exercises the option, pay off the contract-of-sale, and realize a profit.  Option consideration from the tenant can be used for the down payment on the contract-of-sale, resulting in a (nearly) cashless transaction.  This can be done repeatedly as a business model.

Two cautionary remarks:  1) ALWAYS make sure the option and lease agreements are separate documents so a judge cannot order the refund of the option consideration to the tenant by characterizing it as a rental deposit.  2) Obtain a quitclaim deed any time an option is not exercised in order to maintain a clean title.

#21 – Master Lease-Option

This method applies primarily to commercial rehabilitation projects.  The idea is to find a building that has “gotten away from” its owner and become run-down with vacancies that are not being filled.  A “Master Lease” is negotiated with the owner to take over rehabbing and re-tenanting the building, along with an option to purchase the building before an agreed future date when financing the purchase is more likely to succeed.  Since the present owner is obviously short of funds, the purchaser will have to fund the project and receive a lower price or credit toward the purchase, or both.  It is best to have a real estate attorney draw up these agreements.

 

#22 – Adverse Possession

An interesting way to acquire a property is through what is called, legally, “Adverse Possession”.  It involves taking possession of a property and continuously possessing it for a number of years specified by state law.  The years vary by state from six to thirty, with California being just seven.  Possession has to be “open”, which means coming and going at will.  It has to be “notorious”, which means it can be readily observed.  It has to be continuous, so a break disrupts the timeline.  It also has to be “hostile to the interests of the owner”, which means overstaying an invitation by the owner does not qualify.  California also requires the possessor to pay the property taxes, as well.  If all conditions are met, the possessor will sue the owner in a “quiet title action” to obtain title in their name.  This situation occurs more with rural property, and is not common, but is fun to think about! See wikipedia to learn more.

#23 – Involuntary Methods

The other acquisition methods in this series are all voluntary, except two, which are involuntary.  These are: a) Inheriting a property and, b) receiving a property as a gift.  These are mentioned for completeness, but are too simple to warrant discussion.

#24 – “Leftovers”

There are three additional ways to acquire real estate which are more like techniques that can require no cash down payment.  Here they are:

“P-Note” iivolves giving the seller an unsecured promissory note for the down payment.  This works best if the parties know and trust each-other. But it’s a viable approach.

“Sweat Equity” involves the purchaser convincing the seller to allow them to fix up the property in lieu of a down payment while the seller carries back the financing.  Doing the repairs prepares the property to obtain a new loan and, at the same time, it secures the seller’s loan more as the repairs are accomplished.

“Personal Service Contract” Involves a purchaser providing some service to the seller in lieu of a cash down payment.  Examples include a plumber re-piping the seller’s residence, or a dentist providing dental implants to the seller.

These three techniques should probably be used with the help of a real estate attorney.

Conclusion

In many parts of the country, markets are tightening, and inventory is dropping.  Investors are finding it harder to make a deal.  While the 24 acquisition techniques presented here cannot increase the supply of properties, they can open up alternative ways to capture more properties that are available.


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Bruce Kellogg

Bruce Kellogg has been a Realtor® and investor for 36 years. He has transacted about 500 properties for clients, and about 300 properties for himself in 12 California counties. These include 1-4 units, 5+ apartments, offices, mixed-use buildings, land, lots, mobile homes, cabins, and churches. He is available for listing, selling, consulting, mentoring, and partnering. Reach him at brucekellogg10@gmail.com, or (408) 489-0131.

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Tools of the Trade For Tax Lien Certificate and Tax Deed Investments

By: Ted Thomas

Tax Lien Certificates are the perfect investment vehicle for everyone that wants a low risk and the safety of investing with the government. Tax Lien Certificate and Tax deeds don’t require years of study, and a person can start with less than $500. There are numerous tools; some are basic some are advanced, that a person needs to learn. It’s all very easy and can be accomplished in 3-4 weeks.

Basic Research Tools

The more you know, the better off you will be when it comes time to attend your first auction and start bidding on Tax Defaulted properties. As I’ve mentioned before, the essential information is knowing the who, what, when, and where.

When it comes to finding this information, you have several options. One is to refer to my course materials such as the Comprehensive Tax Lien Directory, Complete Tax Deed Directory, and my Platinum Tax Lien Certificate and Tax Deed Directory software on flash drive.

These days, using a computer is another great way of gathering information. Many counties now post the list of delinquent properties on a website along with the bidding requirements, the date and time of the auction, etc. online.

For the data you cannot find elsewhere, it’s helpful to give the appropriate agency or person a call, so obviously a phone is an important tool.

Transportation is another big one. Whenever possible, you will want to drive by any parcels you are considering purchasing. While you’re there, take pictures of the property and add them, along with your written notes, to a notebook (or other type of device/recordkeeping system, such as a iPhone, laptop or iPad) entry. Don’t rely on your memory to supply the details at a later date.

A final basic tool that everyone needs is time. Don’t rush into a deal without having completed the proper research. Take the time to delve deep into the specifics of a parcel before buying. Do your homework and determine if there might possibly be an environmental contaminant on the property, other liens that will compete against the property tax lien, zoning restrictions, etc.

To recap, the basic tools you need are:
- A directory of tax lien and tax deed offices
– Computer
– Phone
– Vehicle
– Camera
– Notebook or Software
– Time

Advanced Tools

In all cases, you will need to do research on the parcel going to the defaulted auction. Many times the list of properties you obtain includes little more than a tax ID number, perhaps a legal description, and the amount of taxes in arrears. For most of us, that’s not enough to determine if a parcel has any value. You need to get an address so either you or someone you are partnering with can do a drive by; the owner’s name is a big help, too.

In order to get that missing data, the best place to start is at the county office (usually either the Treasurer or Assessor). They may have a cross-reference tool you can use free or pay a small fee for.

There are sites online that aggregate this data. One is Bid4Assets.com.

Human Resource Tools

Not only do you need tools to help you with your tax lien certificates and tax deed investments, you need people, too. These people are your partners who function in a variety of ways to help you with the things you can’t do or can’t provide.

Knowing an attorney you trust can be a lifesaver. He or she will come in handy to advise you on various laws and possible action you can take to defend your assets against worst case scenarios.

A realtor is vitally important. A good real estate agent can give you comparable values, give you an assessment of future values in a particular area, and also easily dig up information on a property that you might have difficulty getting access to.

A home inspector and appraiser are two more human resources that are handy to have available when you need them. After you’ve brought your property, they can help you assess current condition and provide their estimate of value.

And finally a group of people who are willing to provide funds for your investments is always helpful, particularly if your capital stash is limited. Often the difference between getting a great deal or not depends on whether or not you’ve got the cash when you need it. At the Ted Thomas 3 Day Auction Preparation workshop we will show you how to get access to funds to do your Tax Lien Certificate And Tax Defaulted Property deals.

When it comes to being successful with tax lien certificate and tax deed investing, remember that old adage, “to be forewarned is to be forearmed.” There are many tools available and you would be wise to use each and every one.

Remember, too, that you are not going it alone. Join our coaching call every Wednesday night and learn from those who have been there, done that, and made great profits! Our Coaching calls are usually offered as a bonus with my many of my home study programs.


Ted Thomas

Ted Thomas is famous for showing newcomers and investors how to earn 6 figure incomes within 1 year of completing his training program. Conservative investors love tax lien certificates because they are predictable, certain and secure and sold by local government. Tax defaulted properties are sold at oral big auctions and online. Starting bid, only the back taxes…. More information at www.TedThomas.com

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Making Money and Understanding Tax Lien Certificates

By Ted Thomas

The simplest way to understand tax lien certificates is to realize all real estate is taxed by the county and sometimes the county and municipality. Property taxes are collected to provide many different benefits to citizens of the county, for example property taxes pay for schools, they pay the sheriff’s department, they pay for firefighters, of course the roads have maintenance, they also pay to help the hospitals and libraries, these are just a few.

Every property owner is assessed property tax one or more times a year. In many states if the property owner does not pay the property taxes the county or municipality will issue a tax lien certificate. Anyone can purchase a tax lien certificate, they could be valued at only $50 or they could be $5,000. The county will auction the certificates. The reward for purchasing a tax certificate is the counties pay a high rate of interest on those certificates.

The rates could be as high as 16%,18%, 24%, all the way up to 36%. When the property owner finally pays the property taxes, they will recover the certificate, in other words they will pay you whatever you paid for the certificate plus the outrageously high interest rate.

So, to summarize this process, you the investor, will invest directly with the county and you will receive a check back from the county when the property owner pays the taxes. The check will be the full amount of your investment plus the high interest rate.

The objective in selling tax lien certificates is to allow investors to generate money but more importantly the county now has revenue to pay for county employees plus police and fire departments, schools, roads, libraries, and hospitals.

Tax lien certificates are a winner for the county, they get revenue, tax lien certificates are winners for the investors because they earn a high rate of interest and they are a good deal for the homeowner or property owner because it gives them time to pay their taxes.

The sales for delinquent property taxes occur in approxim ately half of the counties in the United States. Tax sales are announced by the county, sometimes in the newspaper, sometimes online, many times both. This is a very formal process, it has been in effect for over 100 years.

Most investors have no idea about the tax system. Once you learn this process and learn how to honorably and ethically take advantage of it, you can earn money for the rest of your life.

Tax lien certificates are a safe, secure investment. The property sec ures the tax lien certificate. For example, if you purchased a tax lien certificate and paid the county and the property owner never redeemed, that is comes forward and pays you back your money and the high interest, the defaulting property owner will lose the property to you.

Let me repeat that. You will invest your money with the county, your investment is secured by the real estate, the interest rate on your certificate is guaranteed. However, if the property owner fails to pay the principle and the interest the owner will default and you, the owner of the tax certificate, will be awarded the property mortgage free. Of course, this sounds way to be good to be true. However, this system has been in effect for well over 100 years.

Unfortunately, tax lien certificates and the processes and procedures are not uniform and they’re different from county to county. This will require some study on behalf on the investor.

Here is a perfect example from recent students of mine. Drew and Recia, a young couple, attended my training and followed it step by step. They purchased a tax lien certificate in the amount of $11,000. The property owner failed to redeem, that is failed to pay their taxes. The law allows Drew and Recia to become the new owners of that property, they now own the property without a mortgage. The value according to the tax assessor, the MLS system and Zillow was $180,000.

As you can see, you can make money with interest rates 16%,18%,24%,36% and every once in a while, a property owner fails to pay, and you get the property without a mortgage, that’s pretty amazing but it’s the law in all counties. Watch for my next article and I will have more about the 3,000 plus counties that sell tax lien certificates and tax defaulted properties.

Here is a couple of most frequently asked questions, I’ll have hundreds of these which I’ll make a gift to you in future articles:

  1. Q: Who can buy a tax certificate?

A: Anyone who has cash to pay the local county government (auctioneer)

  1. Q: Why don’t people pay their property taxes…?

A: Numerous answers, People pass on (die) and no one pays the property tax in many instances Heirs do not understand taxes are due. People run out of money… they become unemployed and have temporary money problems. Family crisis, hurricane blows off the roof, car accident no insurance.


Many people know Ted Thomas© as Americas tax lien certificate and tax defaulted property authority. For more than 25 years Ted has been the information source. More information and free videos go to www.TedThomas.com

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How To Get Paid Big Dollars And Work Where You Want And When You Want AND RETIRE EARLY

By Ted Thomas

This Will Knock Your Socks Off!

 2 Distinct Investment Opportunities

#1 Tax Lien Certificates – One of the Safest Investments In America Today!

When it comes to real estate investing, there is much to be learned and a lot of money to be made. The prudent investor knows that it is impossible to learn about all facets of real estate investing at once and instead focuses on a certain kind of purchase or investment, works to make the investment profitable, before moving on.  One of the most unknown but highly profitable types of real estate investments is investing in tax lien certificates.

Purchasing a tax lien certificate is a fantastic way to build wealth and generate revenue.  This investment vehicle is a very real way in today’s economy to work towards financial independence.  However, you must know what happens when you purchase a tax lien certificate and how it works in order to be successful. Never jump into a real estate investment opportunity without proper education.

A tax lien certificate is offered by a local county government who is looking to collect on delinquent property taxes.  The certificate, when it is offered, becomes the first lien on the property and gives you, the investor, the opportunity to collect on the tax payments that are owed.

First, it is good to work in tax lien certificates if you do not have a lot of working capital to invest.  This is also a great investment tool if you are looking for a guaranteed return on your initial investment. The returns on tax lien certificates can be up to 16%, 18%, even 36%.  A tax lien certificate is typically a solid addition to any investment portfolio. Tax lien investments are one of the safest investments found in America today.

In order to purchase a tax lien certificate, as an investor you must find out the terms and conditions of the public tax auction in the county where you are interested in doing business.  Keep in mind, tax lien terms and conditions vary widely by county and state, so in order for you to be properly educated over bids, interest rates, terms, collection, and other matters, you must know what the county government requires. This may sound tricky but with the proper training it’s actually quite easy and extremely profitable. This business can be done online from anywhere including your kitchen table or home office.

This is a passive investment, perfect for the newcomers to real estate investing. Once you get a tax lien certificate you just sit back and wait for the profit check to come in the mail.

#2 Properties for Pennies – Mortgage Free

Tax deeds or tax defaulted properties are sold in about half the states in the US. Many times you can buy these properties for low prices because a great value because you are bidding on the property at a tax deed auction.

Here’s the simplified version of how tax deed sales work. Each homeowner must pay their real estate tax to the local government jurisdictions.  When a homeowner does not pay their county mandated taxes on their property, the county will confiscate the property and offer it for sale at a government tax defaulted property auction for only back delinquent taxes.  The county must do this because the county must pay for important services like local police, fire, schools and infrastructure, without the tax money they cannot do this and the local government would be in a world of trouble.

During a tax deed auction, property is usually sold for starting bid back tax plus any fees, interest charges, and court costs. Property taxes are only a small percentage of the market value and because of this investors who purchase a tax deed buy the full property rights for just pennies on the dollar.

A tax deed sale must be announced publicly and by law and in most instances are sold to the highest bidder.  When you are the winner at a tax deed auction you actually own the property and you own full legal rights to the property that very same day without any mortgages, liens or deeds of trust.

Of course this is a real estate investment and with any investment there can be risks.  It is important to become educated and always do your own due diligence before purchasing at the tax deed sale to minimize your risk.

You’ll want to make sure you research the property values before bidding on any tax deed property.

There are many ways to locate tax lien certificate auctions and tax defaulted property auctions. You can search Google, go directly to the local county government websites or call local county government offices. Having experience on your side can make a big difference in the amount of time it takes to get off and running in this investment opportunity. Ted Thomas and his team have been teaching investors how to do this business for over twenty-five years. Ted Thomas has helped thousands of students become successful tax lien and deed investors.


 

Ted Thomas

Ted Thomas is a Florida-based author and publisher who specializes in tax lien certificate and tax defaulted property investments. Visitors to his website www.tedthomas.com will find 3 must see FREE instructional videos. No credit card required. The video lessons will give you information about government tax defaulted real estate which is sold at public auctions starting bid back taxes which could be 10 cents to 20 cents on the dollar. You’ll also learn the secrets of tax lien certificates which generate returns of 16%, 18%, up to 36%. Go to www.tedthomas.com for more information.

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“T” Is for “Time”

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.