The October 2013 edition of The Profit Newsletter is available for download just in time for our Tampa REIA Meeting on October 12th. You can download The Profit Newsletter as a High Quality PDF (Recommended) or Low Res PDF for slower devices. The Profit Newsletter is the official newsletter of the Tampa Real Estate Investors Alliance and is a digital, interactive newsletter for new and seasoned real estate investors delivered as an Adobe PDF file to read on your PC, Mac, Smart Phone, iPad or other mobile ready devices with a PDF reader. Many of the articles and ads in The Profit contain hyperlinks you can click or tap to visit websites, watch videos, listen to audios, download content, send emails, comment on articles, share socially and much more! The high res version of The Profit is “print ready” for those who want to print the newsletter on their home or business printer. Also, be sure to Subscribe to The Profit so you don’t miss a single monthly issue.

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We are talking about a more global approach to real estate investing using land trusts. Investors should be acquiring a new operating system for their real estate. Just as Windows Vista includes word processing, spreadsheet, e-mail, contact management, Photoshop, and more.

A land trust as an operating system delivers benefits in all phases of your real estate business. It provides a management structure, a partnership and syndication system, a financing alternative, an estate planning tool, a firewall, and much more.

To treat the land trust as merely a title holding entity ignores many of its best features. A trust provides the software for many investment strategies that deliver a host of benefits to its users. For example: Read More→

When it comes to 800 Pound Guerilla Marketing, I have learned that the number of motivated buyer and seller leads I am able to generate only seem to be limited by the time, effort and creativity I put into the marketing process, rather than how much money I spend.

When I put in the time, effort and creativity needed to successfully market my real estate investing business, the leads come pouring in on a steady and predictable basis. When I slack up, the leads often start to dry up rather quickly.

Over the years, as I came to this realization, I created a few personal marketing rules or “marketing musts” to help keep me and my marketing efforts on track so I can consistently generate a steady stream of incoming buyer and seller leads.

I wanted to share these “Five Marketing Musts” with you in hopes they might positively influence your future marketing efforts and real estate investing success… Read More→

I spent the last weekend attending a training event put on by one of the premier real estate teachers in the country today. As I listened to her teach phenomenal content, I kept hearing her talk about the MAO formula to determine the most that anyone should pay for any property. The basic MAO formula is… “The After Repaired Value of the subject property X 70% less Repair Costs = the most you should pay for any property” when using institutional or private financing.

As she talked, I kept thinking to myself, what if the buyer can’t qualify for institutional financing? What if private financing isn’t possible either? What if the buyer doesn’t have someone lined up who can get institutional or private financing? If that is the case what good is the MAO formula to the buyer?

Sure, I know the buyer could use a Hard Money loan to fund their deals and there is a formula for getting a Hard Money loan too. The basic Hard Money formula used in my area is… “The After Repaired Value of the subject property X 65% less the Lenders points and fees = the most that can be borrowed on that property”. The biggest problem I see using Hard Money loans is if the borrower can’t get the property they are buying resold quickly. Most hard money loans are short term, usually one to two years in length and if the property hasn’t sold and the Hard Money loan becomes due and payable, the borrower may find it impossible to find other financing to replace the Hard Money loan and could lose the property. Read More→

OK! So you have decided you want to get into real estate investing and you have gone to some real estate seminars and classes and read some books. Great! You have learned that the next step is to put out some marketing to get leads coming in, like people that want to sell their house, and hopefully at a discount. So you have started doing one or more of the following:

1. Mailing letters to home owners that say you want to buy their house
2. Put out bandit signs on the side of the road that say something like “We Buy Houses”
3. Have set up a website or websites that people find when they search “We Buy Houses” or other various search terms (“Sell my house fast”, “Sell your house fast”, etc).
4. Have put an ad in the newspaper or Craigslist that says “We Buy Houses”, “Fast Cash for your home in as little as 3 Days”
5. Have put out flyers around town with similar messages as the above.
6. Or one of the other (96) marketing strategies that Dustin teaches us.

And then what happens? The calls start to come in. YEAY LEADS! Read More→

Several members have asked me to lay out the steps required to get your first check with a detailed description of each. That’s exactly what you’ll get, but it’ll take several editions to get it done. You may want to copy these lessons and build your own manual as we go.

Here are the steps all in one place to do a simple ACTS or sandwich lease option deal, which is the fastest way to get a check for $5,000 or more. But, before I go there, you may want to take the shortcut and order my Control Without Ownership course where it’s all in one place with everything you need from beginning to end. It sells for $997, but if you call 800-567-6128 and ask for the Mentor discount, you’ll get $200 off. The hard truth is, if you don’t, it’ll cost you many times that amount.

Okay, here we go… Read More→

Have you ever heard the saying, “Work smart, not hard”? It’s one of my personal favorites, and I’m here as a coach to show you how you can do it.

I’m guessing that when you think about buying a property, you’re assuming a lot of leg work: traveling to the property, inspecting it, doing the due diligence, and checking your numbers. And, yes, this is the way you’ll buy the property that you’ll put into your portfolio.

But what if there is another option? What if you could buy a property without ever seeing it and possibly sell it on the same day?

The option is called a WHOLESALE DEAL.

Sound too good to be true? Let me tell you, as a coach and as a business person who has done it, it CAN be done— YOU CAN DO IT—I can tell you how—and these deals can get you to your goals: earning a profit. Read More→

If you want to sell/educate/entertain/enlighten/etc. just about anything to anyone in the world these days, you can and should have a website. No matter what you do, you will be able to reach and communicate with anyone you desire with this incredible tool.

But how do you make one? What do you put on it? What do you say?

And how do you add those cool videos and funny pictures of cats on there that everyone loves?

Yes, these are the questions I often hear people ask. And today, I’ll do my best to answer them for you!

To begin, you need to ask yourself: WHY do I want a website, and WHAT will I be doing with it?

Well, I’m happy to say that I have the answer for you, and that answer is: “It depends.” Read More→

“I blog because I have something to say.” ~ Eddie Huang

Do you have a blog? Have you ever thought about starting one? For a while there, you could be shunned if you didn’t have a blog. Every Tom, Dick, and Alice had a blog. Heck, even my second cousin Flora, the cat lady, had a blog. All God’s children had a blog! Thankfully, the hype has subsided. But the potential benefits of blogs – and pitfalls – are still there.

I’ve done some blogging myself, with mixed success, and in doing so, I’ve developed some ideas about what works and what doesn’t. Since I’ve been reexamining the idea of blogging as an investor, I thought I’d share my thoughts with you here.

As you know, I like to start at the beginning, and I’ll bet at least one of my readers doesn’t really know what a blog is. A blog is simply an online journal or diary. That’s pretty much it. Beyond that, each blogger decides what his or her blog is going to look like.

But first you’ve got to decide if blogging is for you. Read More→

Have you ever made a TOTAL fool of yourself – when you were least expecting to? Read on, and learn how I stepped square in the middle of it!

Last night, one of my lifelong friends – Mary Ann Doering – invited Kim and me over to a small dinner party she was having for her neighbors. Mary Ann is a wordsmith and the woman who proofs my columns.

As much as I like and appreciate Mary Ann, I did NOT want to go to her dinner party. Frankly, any get-together that doesn’t include real estate investors, capitalists and financial-freedom seekers bores me to tears. No matter – Kim made it clear that we WOULD be attending. What I didn’t know was that Mary Ann was setting me up BIG TIME! She was about to pull off her best practical joke on me EVER!

We got to Mary Ann’s before the other guests arrived. A few minutes later, the doorbell rang. Prior to the couple walking in, Mary Ann whispered, “I barely know these people. They’re pretty boring from what I remember.” GREAT, I thought: Now I’m really glad I came.

After meeting “Tim” and “Jane,” I began doing what I always do – asking questions. At one point, Mary Ann mentioned that she was rereading The Millionaire Next Door by Tom Stanley. Tim asked, “Who is Tom Stanley?” Read More→

Whether you are a serious investor or you’re just getting started in the real estate investing business, you need to have at least one Realtor on your “dream team”. There are many ways a Realtor can help you in your business, both on the buying and the selling side and they can play an integral role in building your business.

One of the questions I get a lot is “how do I find a Realtor to work with?” There are many ways to do this. You can find one by asking other investors who they use. They may or may not want to share this information with you. You can also go to your local real estate club. There are always Realtor/Investors at those meetings. Another way to find a Realtor to work with is to check with the Board of Realtors and find Realtors who specialize in investor properties. This type of Realtor may also work with bank owned properties which can also net you some really great deals, especially in today’s market where there are so many foreclosures and motivated sellers.

You need to find a Realtor who is going to do a good job for you. Make sure the Realtor you pick is at least a broker-salesman. These types of Realtors have usually been in the business for a long time and have a lot of experience in dealing with all kinds of properties and situations. You also want to work with a Realtor who is motivated to bring you deals and buyers. Read More→

I was just up speaking for Atlanta REIA when a member asked me “isn’t closing short sales back to back illegal?” My answer was NO! He asked me, when did that change? It has never changed. He just didn’t ask the right questions to the right Attorney or Title Company. Closing a short sale back to back can only be done with full disclosure which I always do on my paperwork to the short sale lender and to the “C” Buyer. I provide copies of my purchase agreement which I have signed with my “A” Seller and me as “B” Buyer to the short sale lender. I then provide copies of paperwork that I had signed with my “C” Buyer and me as “B” Seller to my title company. If you are using my paperwork, here is how I disclose the back to back CASH closing. Remember, disclose, disclose, disclose!

1. The “C” Buyer is a cash buyer.

2. The “B” Seller/investor must has signed a form along with the “C” Buyer, stating that they are aware that the “C” Buyer’s money is going to be used to close the first transaction between the “A” Seller who is doing the short sale and the “B” Buyer/Investor who is purchasing the property prior to selling to the “C”/Buyer.

3. In addition, the Title Company and/or Attorney who is writing title insurance on the property, their underwriter has no problem with this type of transaction as long as this form along with the disclosure stated in your purchase agreement to the short sale lender is provided to them for review. Read More→

Major Zane Purdy’s life crumbled overnight…

Maj. Zane Purdy was making over $100,000 a year employed by defense contracting company, General Dynamics, when his identity was stolen and sold to an identity theft and tax fraud ring. Now, Purdy makes $7.25 an hour at a Krystal to support his wife and two children.

In 18 years of service, Purdy had never had an issue with his top secret security clearance. But once thieves stole his identity, his credit was trashed. Bad credit automatically flags someone as a national security risk and his security clearance was suspended. To add insult to injury, he has also been blocked from active duty and General Dynamics was forced to fire him.

Adding to his plight, he has tax liens levied against his property and the IRS is claiming he owes them more than $10,000 in back taxes.

You may want to believe he was careless with his information, maybe on an Internet smut site or volunteering personal information to a phone scammer. Nope.

His identity thief was a data-entry clerk at a nearby hospital! Read More→

In last month’s issue, I began to explain exactly what securitization is and why it is fraudulent. For several years the mortgage banks in this country were flat-out making up transactions and trusts to cover for the fact that they were pocketing their investors’ money. But that wasn’t enough for them. They bundled up the loans, intentionally loaded them with toxic mortgages to increase their rate of return, and sold them to themselves for a “profit.”

But what does this all mean for the title on a property that had a loan go through this process?

Basically, the title was flawed from the get-go. Nobody who was a signatory to the loan had ANY interest in the repayment of that loan. MERS and all the others were just filling a role by pretending to be officials of the bank that was lending the money, when in reality they were a signature factory. If the trusts had been managed correctly from the beginning, the name of the trust should have been on the note and on the mortgage. They weren’t. Instead the banks set up a huge maze of companies to process the loans with defective notes and mortgages. Read More→

Funding in the real estate business can be one of the biggest barriers to entry and one of the biggest headaches! Here are some tips to help get your next deal funded.

Remember that the only thing that sellers really care about is solving their problems. Make your offers a solution to their problems. Do your homework on the seller and the property. Find out why they are selling and if the property is distressed in any way (deferred maintenance, low occupancy, etc.). Make an offer that solves the seller’s problems. An example might be using a master lease option to take control of a distressed property, fixing it up and then refinancing or selling it.

1. Use master lease options. A master lease option or lease option is a set of two contracts that give you the right to control the property (master lease) and an option to purchase the property for a set price and for a set amount of time. A master lease option will allow you to take control of the operations of the deal and give you time to stabilize the property. Once that is done you can exercise your option to purchase or sell the option to a new buyer for quick cash. Read More→

Considerations

Hard money lending can be a great place for self-directed IRA or other retirement assets. There are, however, a few things to be aware of before you commit:

• Hard money loans can be illiquid. If you are nearing or over age 70, pay attention to your required minimum distributions. You must make these RMDs, even if the borrower pays the loan late. You may want to earmark RMD money to come from another source besides the hard money lending part of your portfolio.
• RMDs do not always have to be taken in the form of cash, some self-directed IRA investors that do hard money lending have elected to take their RMD in the form of the actual loans themselves. In fact, you can even take a portion of the loan as your RMD thus becoming partners with your IRA on that loan. (For Example: You can take 25% of the loan as your RMD. You would then own 25% of the loan and your IRA would own the other 75% of the loan.)
• Your ability to contribute new money to your self-directed IRA or other retirement account is limited each year. For self-directed IRAs, for example, you are limited to $5,500 in new contributions. Anything over that must be rolled over into the account from another qualified retirement asset, or you will have to borrow the difference.
• You cannot lend money to yourself or certain family members, via your self-directed IRA. You therefore cannot make a hard money loan to any property in which you, your spouse, your ascendants or descendants and their spouses has an interest. Similarly, you cannot lend money from your self-directed IRA to any project in which any legal, accounting or financial professional who advises you on your self-directed IRA investments has an interest. Read More→

Across the country there are cities which have high percentages of underwater houses. Cities like Tampa, FL have as much as 43 percent of area home mortgages seriously below its formerly established market value. Fortunately for investors there are numerous areas like Tampa which have a large volume of homes with a mortgage balance exceeding the home’s value by at least 25 percent.  REIAComps helps to quickly see the number of foreclosure sales of these types of houses in your market month after month.

By looking at REIAComps valuation and sales data, we were able to actually verify the two market areas with a higher percentage of foreclosure than Tampa. They are Las Vegas, NV and Lakeland, FL. According to the local Tampa newspaper, The Tampa Tribune one additional factor is this market condition restricts the number of homes that can be listed for sale and exacerbates a region’s temporary shortage of homes on the market. Read More→