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Realty411 / reWealth magazine is published quarterly in Santa Barbara County. Copyright 2012. All Rights Reserved. Reproduction without permission is strictly prohibited. The opinions expressed by writers and columnists are not endorsed by the publishers. DISCLOSURE: Publishers are not responsible for performing due diligence on the opportunities offered by advertisers. Before investing in real estate, seek the advisement of a trusted financial adviser, attorney or tax consultant. Real estate investing is risky and could result in loss of capital.

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Podcast

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I changed one thing one time and left the rat race forever. I can show you how I did it,

Real Estate Investor Founder of EpicProAcademy.com and CashflowSavvy.com Host of the Epic Real Estate Investing Podcast on iTunes

Matt Theriault

8 9 10 13 14 15 16 18 19 20 24 26 28 30 32 33 34 36 38 39 40 42 43 44 46 48 50 56 58 59 62

How Real Estate Performs During Inflation Editors Letter: Its EASY to Build Wealth The BIG Property Grab by Dave Lindahl 3 Profit Centers to Create Cash Flow Build Wealth Starting with Only $100,000 Whos on the Radio? Its the Real Estate Guys Jason Hartmans Financial Freedom Report The Real Estate Scoop in Hollywood LA Clubs Host TOP Real Estate Leaders A Solid Foundation with Whiterock Capital Tom Wilsons Tale of Two Turnkeys Spotlight on Ohio with Missy McCall Hammonds Why the Industry Seriously Dropped the Ball Tips from Shortsale Masters Bill & Dwan Twyford The Lady Landlords take San Diego by Storm Matt Theriault Helps Readers Conquer Fear The Property Flip Pros Share their Insight Cash Flow In the Carolinas with Alex & Kevin How to Market Your Self Storage Facility Insight from Americas Land Trust Expert 401(K) Investing with Accuplan Benefits Services Belize: A Tropical Paradise with a Strong ROI Inside a Note Deal with Tony Martinez Why Arizona Real Estate Leads in Appreciation Mathew Owens, CPA gives 10 Keys for Success Community Buying Group Saves Investors Money Chris Dannenfeldt Shares his Rehab Wisdom Norada Real Estate Helps Investors Profit Seller Financing Options in Indianapolis Market Spotlight: Kansas City, MO Should You Fix and Flip or Buy and Hold?

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n this article were going to take a look at how real estate performs in various macroeconomic climates. If youre following the news and the actions of not only the US government but most of the major governments in the world, then it is very reasonable, maybe even a foregone conclusion, that we are headed for massive inflation in the not too distant future. If things get even more out of control we could even experience hyperinflation. On the other

Rental property owners, especially those with fixed interest rate mortgages, receive higher rental income while their biggest expense stays fixed. Thus their cash flow increases. One important note here. In times of high inflation, properties with shorter rental periods generally perform better so residential rental property with 6 to 12 month leases are a good bet. Commercial rental properties such as office complexes and shopping centers, which often have 5

ever, real estate has just gone through a major deflationary period while other commodities such as gold, silver and oil have had major upswings. So real estate has less room to fall and less risk than other commodities. But heres the kicker, cash flow real estate has a huge advantage over other assets during deflation: the cash flow! Even if the value of a rental property drops during a period of deflation, the rent checks still give you a return on investment

Inflation & Deflation

hand, a case can be made that were heading for massive deflation, just like in the Great Depression. It is out of the scope of this article to go into details on the factors leading to these two scenarios. However, if you are a real estate investor, or are considering investing in real estate, then it is important to understand how real estate investments perform in each of these two scenarios. What happens in periods of high inflation? The purchasing power of the dollar declines. As a result, creditors are getting paid back in dollars that are worth less then they lent out and as a result they raise interest rates. Creditors like interest rates to be a few percentage points above inflation. So lets use some numbers as examples. If inflation hits 12%, then interest rates could easily go up to 15 to 20% so creditors can make money. But at 15% the cost of a mortgage skyrockets and most people cant afford to buy a home. This happened in the 70s and many other times in history. As fewer people qualify for mortgages, rental demand increases and rents go up. to 10 year leases can actually see cash flow go down as expenses such as utilities, insurance, maintenance, etc., increase while rents are flat. How is appreciation affected by periods of inflation? During times of high inflation, the cost of the raw materials needed for new construction increases, which also directly affects overall property prices. As the costs of materials, labor, and legal rise, prices of existing properties are positively impacted. But what if were headed for another Great Depression? We certainly hope that is not the case, but lets take a look at how real estate performs in deflationary times. If residential real estate performs well in inflationary times then you might expect that it would not perform well as an investment in times of deflation but as well see that is not the case. In times of deflation, there isnt much money available to buy anything. This lack of money creates a lack of demand, and the lack of demand forces prices down and that includes real estate prices. How-

How Real Estate Performs in Times of

each month. Other investments do not. Plus, its easy to find renters during deflation because banks dont have the money to lend for mortgages. People cant buy homes, so they have to rent. If you expect a period of deflation, your real estate investment will perform best with longer lease periods so increase your lease durations as much as possible. In summary, you can see that residential rental properties do very well in times of inflation and they have advantages over other investments in times of deflation.

Lori Greymont
P.S. Our team of experienced real estate professionals can help you create a customized investment plan and find properties in the best rental markets in the country that fit your plan. To reach Summit Assets Group, please call: 408-268-9777.

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Its HARD to Make a Living But its EASY to Build Wealth

n Los Angeles, a commute is unbearable. In fact, INRIX, a leading international provider of traffic information, reports that the City of Angels is the second most congested city in the nation. Many Angelenos drive three hours per day just to work. I thought that was bad until I discovered people who commute into California every week from other states, only to see their families on weekends. (I sat on a plane next to a bicoastal commuter once.) The sacrifices made by individuals just to make a basic living (food, clothing, shelter) for themselves and their loved ones is mind boggling. I know what its like to drive hours every day to punch a clock; its tough! Even if you love your profession, commuting for hours, putting up with office politics and trying to please demanding bosses can be overwhelming. It can also be very stressful. Plus, with an economy like this, wages and salaries are just not very generous. Companies seem to be using the bad economy as an excuse for poor pay, lack of benefits, and company perks. When I was a college student majoring in journalism, I was not taught about business or finances at all, in fact, nobody ever discussed
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Listen to The Creating Wealth Show, Jason's Highly Acclaimed Investor Podcast: CW 274 Fiscal Hangover & Global Change with Keith Fitz-Gerald

So you love real estate... but you hate management?

Linda with Dmitriy Fomichenko of SenseFinancial.com at an event.

salaries. When I discovered how much journalists made, I was shocked and greatly disappointed. Lets just say its a career that you definitely have to be passionate about because media salaries tend to be modest. Having loved magazines since I was a child, I decided to enter the profession and watch my pennies so that I could invest as much money as possible in something that I knew was a sure thing: Real Estate. You see, because I studied the mechanics of money on my own, I knew that most millionaires made their wealth through real estate. I understood vital concepts about the time-value of money and how location and appreciation could easily skyrocket a persons net worth. But the hardest part I thought was getting started. So my husband and I worked hard to accumulate the funds
Continued on pg. 52

CW 273 The Decline of the EuroZone with Alasdair MacLeod

CW 269 SWOT Analysis of Income Property, Facebook IPO & Case Study

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Podcast

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The BIG
T
hree years from now you could be living in a water-front property, sleeping in on Monday mornings, doing only the things you want to do and excitedly walking to the mailbox everyday ready to gather that days set of cash flow checks the Postman dropped off . Its those cash flow checks that allow you to live this life of leisure and it never stops to amaze you how they have gotten as high as they are and they keep increasing!! Oryou could wake up on Monday morning three years from now, living the same life your living now and if thats OK with you, thats OK with me. But if you want to change your life in any way, that change will probably require money And heres the deal.you have about two and a half years to stake your claim and get your share of a lot of wealth thats about to be created during this big property grab. What the heck am I talking about? Im talking about the multi-family real estate market. If you will do for the next three years what most people wont do, you will be able to do for the rest of your life, what most people cant. Im not talking about becoming a landlord! God no!! Leave that to the qualified management companies who love to handle tenants, trash and toilets. Im talking about investing in multi-family properties while the prices and cash flows are at historic lows and watching your wealth and cash flow skyrocket as the economy gets better. How do I know this is going to happen? It happened to me, this is how I made

by David Lindahl www.REMentor.com

Property GRAB!!
my first real estate fortune, and the economy is lined up perfectly to have the same thing happen again. I remember when I first started teaching, at the time I owned just under 1,500 units. People would say, Oh, that Dave Lindahl is so successful because he bought at the right time. which was partly true. In the seven years that Ive been teaching other investors these methods, I have accumulated an additional 5,800 units but the naysayers do not acknowledge that, they just focused on the fact that I started out in the right place at the right time. Which was true. But now everyone has the chance to be in the right place and buy at the right time and here is why... Over the last few years the economy has been devastated by this recession. A lot of people lost a lot of jobs, a lot of unsavvy investors have lost a lot of properties, and a lot of banks have lost a lot of money! Because of this, as everyone well knows, the banks virtually stopped lending. Not only for buying investment properties but especially for the new construction of those investment properties. Because of this, there has been almost no new multi-family properties built in the last four years. OK so why is now such a good time to be buying? Well, there is this group called Echo Boomers, they are the babies of the Baby Boomers, there are over 74 million of them and they just started hitting the age of 18 last year. Why is this important? Because they have just started coming into the renting age, it is estimated it will

take 10 to 12 years for the Echo Boomers to go through the marketplace, just like there were 14 years of Baby Boomers. So now we are in a situation where there has been no new supply added to the marketplace but a heck of a lot of demand. Its going to take the construction industry at least a couple of years to catch up! So you start buying apartment buildings today at todays lower rents and lower occupancies (remember when buying cash-flowing properties, we ALWAYS buy based on current cash flow), you buy using conservative formulas and you buy with at least a 10% cash on cash return. With cash flowing properties, we ALWAYS buy based on current cash flow), you buy using conservative formulas and you buy with at least a 10% cash on cash return. Which means your properties cash flow now. Then you hold on to these properties, let the management companies collect the rent, deal with tenants, and deal with the maintenance and repairs. You oversee the numbers and cash checks. As you accumulate more.you cash more checks. Your primary job as an investor is to get into more cash flowing deals. And right now is one of the best times to do this because the rest of the population still thinks real estate sucks because thats all you hear in the news. There is not much competition. As you start moving forward, the market starts to change. We start coming out of this recession, more Echo Boomers enter the market, rents begin to rise, which makes values rise and this makes YOUR monthly checks rise and YOUR equity (your wealth) rise. This continues for a couple of years and all of a sudden, we are into an economic recovery, housing prices and multi-family prices start to rise substantially and the news media starts talking about the comeback of real estate and by this time.you are unplugged and living the life of leisure.you are rich. If you wait until that point to start investing, its to late! At that point, prices have risen much higher than they were today and there are many more people competing with you to get those deals! Now is the time to stake your claim, now is the time to secure your future..now is the big Property Grab. Go out and grab as much as you can and in two and a half years write me and tell me how much better your life is! About the Author: Dave Lindahl is a national investor who owns over 7,000 apartment units. He is also the principle owner of REMentor.com, a real estate investing education company. He can be reached at davidrementor@gmail.com

N ATIONAL R EAL E STATE I NSURANCE G ROUP , LLC

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by Isaac Newkirk III

2013
Continued on pg. 15
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ensei Gilliland is one of those individuals who, whether at work or at play, gives it everything he has. And when the CEO of Black Belt Investors (BBI) is not indulging his passion for the martial arts or fishing in the Rocky Mountains, hes helping his investor partners realize lifelong dreams of anywhere from three to six financial independence. months. The landlord is in it His company BBI is a for the long haul. full service firm involved Sensei trains and coaches in flipping, creative fireal estate entrepreneurs nancing, lending and and, when asked his opinrentals. Senseis mantra ion, hell let you know that for the coming year is: he considers wholesaling There are opportuniSensei Gilliland, Francisco the foundation of the sucties in the marketplace and Senseis son, Carson cessful real estate operator. that can create income So if Im an investor who streams by short-term really wanted to get into real estate, and I investments, which dont require the risk dont have a hundred grand to buy it and of most investment deals. He cites three fix it, we can build our cash base through specific areas in which this can be accomwholesaling because it doesnt require any plished: wholesaling, rehabbing, and crecash or credit. If you can picture a pyraative financing. mid, you start building with the foundation It all begins with the wholesaler, acand thats wholesaling (learning to find the cording to Sensei, whom he defines as deals and create cash). Then we graduate The go-to-guy who finds and flips fantasto rehabbing or purchasing at auctions or tic deals [for the investor] that are priced doing some sort of creative financing like significantly below market value. Consider lease options or seller financing and ultia Costco warehouse versus a Macys. You mately becoming a landlord. The problem can get similar products at both stores, but with most people is they like to start on the Macys will charge you at full retail. I like third or fourth level and they cant because to think of my company as Costco... We they dont have the cash, credit and/or the buy cheap, we sell cheap, and we are the experience. suppliers of great quality real estate deals Just as people have personalities, Sensei to other investors and home buyers. believes that properties (and deals) have The vast majority of real estate invespersonalities as well. The most successful tors are landlords and rehabbers and, since deals match the personality of the property 1995, Sensei has been involved in both to the personality of the investor. Maybe areas. Rehabbers that flip are in it for the the rehabber that buys the property is clear short term (immediate income), and landto make $20,000 off of his flip, but as a lords are looking to hold for the long term wholesaler he probably made $8,000. Now (for residual income, tax benefits and eqthe difference between the wholesaler and uity). As a wholesaler, our job is to find a the rehabber is that I didnt put any money great deal, bind it under contract and sell into the deal, I didnt have to close on the the contract to either an investor or end deal through escrow or title, I didnt have to user (home buyer). My job is to sell that suffer the rehab expense or incur the holdcontract and get paid in 21 days or less. ing cost, and I dont have to put my hands Typically, Sensei doesnt wait until the together as its sits on the market and hope end of escrow to get paid like most people and pray that it sells. So I made $8,000 in do. He adds: For the rehabber, he is going 21 days or less without the risks, whereas to get paid after he buys it, fixes it, goes the rehabber is willing to take on all the through escrow and flips it. Thatll take

3 Profit Centers to Create Cashflow in 2013

risk and will need to wait a few months to collect his check. Remember that Sensei gets paid in a few weeks while the rehabber is waiting until the property sells to cash in, a period during which Sensei could be moving on to other deals. I can put more deals into the pipeline than rehabbers can. Im a rehabber also, so I know that I can typically manage about three rehabs at any one time. Whereas, as a wholesaler which is not as labor intensive I can put many, many more deals into the pipeline. Ultimately, Im going to end up making more money than a rehabber. Remember the Costco reference... Its all about selling quality products at a discount to move the inventory in bulk. Sensei also believes that real estate wholesalers have another major advantage: the capability of accepting virtually every deal that comes along while the rehabber suffers certain constraints. Rehabbers have a certain criteria of what kinds of properties they want to buy. If the property doesnt fall within their guidelines, they tend to pass on the deal. I dont care if the property is turnkey, if its marginal or burned down to the foundation. Whats important to me is the price Im getting it for and what its worth on the after repair value side. So price cures all for the wholesaler and, once I get it under contract, I can sell it to another investor whose criteria it may fit or keep it for myself. This way Im able to create a dual income stream, one through wholesaling and one through rehabbing. In his seminars, Sensei will advise you that most investors only know two ways to invest in real estate: buying and holding a rental or buying and repairing the property. He takes considerable pride in the fact that Black Belt Investors offers its clients op-

PAGE 13 2012

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How to Become a Millionaire

(Starting with Only $100K)!
by Kathy Fettke
How could the difference in returns be so dramatic? Its simple the use of leverage can help us acquire much more than we could on our own. But theres more! Pat had purchased income property so he was able to apply the monthly rental income toward the debt. In fact, the rents more than covered the expenses so much so that Pat was able to receive a 10% annual return, which would net an additional $150,000 over the 15 year period. Add that net rental income to the $700,000 profit, and Pats total return is $850,000 in profit! However, what if Pat put all his rental income toward paying off the loan instead of pocketing it? Hed have all properties paid off in 15 years thanks to the accelerated pay-off. Pat would be a millionaire! Plus, those properties would be netting an annual rental income of approximately $100,000 per year. Remember, thats the same amount of money Pat started with. Lets summarize these numbers: $100,000 at 5% over 15 years became: $207,000 for gold $415,000 in stocks $1 Million plus $100,000 annual rental income for life. Enough said? Actually, no. Theres more: Taxes. Both Sandra and Joe will need to pay capital gains taxes if they decide to cash out. Today, long-term capital gains tax is normally 15%, however Congress is considering eliminating the capital gains tax. There is discussion of including it as ordinary income, which could bring it up to as much as 50% in tax. If Pat wanted to cash out, the capital gains tax would also apply, unless he decided to use the funds to buy another property through a 1031 exchange. Additionally, Pat would have enjoyed many deductions from owning real estate that would not be available with stock or gold
PAGE 14 2012

ne of the greatest benefits of real estate investing is the ability to leverage through creative financing. The use of OPM (Other Peoples Money) can increase our returns infinitely. Lets compare the ROI (Return on Investment) on three different investment vehicles: gold, stocks and real estate. Here are some sample case studies of three people with $100,000 to invest: Sandra buys $100,000 worth of gold using no leverage. Joe purchases $100,000 in stocks, but he buys them on margin so his stock value is $200,000. Pat uses $100,000 as a 20% down payment on $500,000 worth of income property. Lets look down the road 15 years to compare investment strategies, with the assumption that each investment increases 5% per year in value. (Please note that markets go up and down, so this example is only being presented for the sake of comparison.) In 15 years at a 5% return, Sandras gold would be worth $207,000. She has slept well at night knowing she owns real money and is thrilled that shes doubled her money. In 15 years at a 5% return, Joes stocks would be worth $415,000. He has to pay back the margin so he nets $315,000 and hes thrilled that hes tripled his money. In 15 years at a 5% return, Pats properties are now worth $1 million. The initial 30 year fixed loan of $400,000 is now payed down to $200,000 so the profit is $700,000! Not bad for an initial $100,000 investment.

investments. Real estate isnt always easy because it does require hands-on management. However, that manager doesnt have to be you. There are very good companies who specialize in property management. Real estate also requires that you buy right. There are many agents who specialize in finding high-yielding rental property. Be careful about working with agents who dont own rental property because they may not understand it. If you are new to real estate investing, consider working with someone who is highly experienced AND successful in what you are trying to achieve. You can download a free report, 7 Steps for New Real Estate Investors at: www.RealWealthNetwork.com/411 And, while youre there, join the network for free on-going real estate education, resources, market updates and referrals to leading agents, property managers and wholesalers nationwide. Kathy Fettke is the founder and CEO of Real Wealth Network The Real Estate Investors Resource. Members have access to free education, resources and referrals to turn-key rental properties around the United States. Real Wealth Network has over 8,000 members, so the shear power of numbers allows the group to acquire properties at huge discounts. Membership is free. Kathy is also host of The Real Wealth Show on KABC Los Angeles and on iTunes and is a regular guest expert on ABC, CNBC, CBS Market Watch and NPR.
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Whos On the Radio?

3 Profit Centers, pg. 13

Its the Real Estate Guys!

hey love real estate and have accepted the mission to share news, information, ideas, perspectives and strategies that will help their listeners become investing geniuses. Robert Helms and Russell Gray are hosts of The Real Estate Guys Radio Show, one of the most popular real estate podcasts of today. Their discussion topics, guests, events even their sponsors are all chosen with this mission in mind. Robert Kiyosaki, author of Rich Dad Poor Dad says, If youre serious about investing in real estate, listen to The Real Estate Guys they really know what theyre talking about.

Robert Helms and Russell Gray

education and expert perspectives in a fast-paced, entertaining style. The Guys talk investment strategy, economics, tax and asset protection planning, market and property due

Live where you want to live, but invest where the numbers make sense.
Robert Helms, The Real Estate Guys Radio Show The Real Estate Guys Radio Show has been broadcasting weekly on conventional radio since 1997 and is now heard worldwide on iTunes as the #1 downloaded real estate podcast. Plus, its free. When you tune-in to The Real Estate Guys Radio Show, youll hear from special guests including the likes of Robert Kiyosaki, The legend himself, author of Rich Dad Poor Dad Donald Trump, real estate mogul Steve Forbes, Forbes Magazine Peter Schiff, economist and author of CrashPoint 2.0 Rich Dad Advisors - Ken McElroy, Garrett Sutton and more Success Stories (and Failures) of Real-World Investors The Real Estate Guys Radio Show hosted by professional investor Robert Helms and financial strategist Russell Gray, the show delivers no-hype
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diligence, international diversification, and much, much more! Gain valuable insights from interviews with notable experts, industry leaders and real-life investors. Discover proven strategies for making money with real estate in any market, how to avoid common and costly mistakes and what is working in the real world right now. Relevant topics, credible guests, upbeat delivery and no sales hype have made The Real Estate Guys, (www. RealEstateGuysRadio.com), one of the most listened to real estate talk shows in the world. There is a new episode released every week, so be sure to subscribe today by visiting their online network. edited by Lori Peebles Bonus: SIGN-UP for their free e-mail newsletter at RealEstateGuysRadio. com. Be sure to also LIKE them on Facebook for the latest updates at Facebook.com/TheRealEstateGuys
PAGE 15 2012

portunities in a third area of investing that relatively few get involved in (primarily due to the lack of expertise available): creative financing aka purchase options. Both wholesaling and rehabbing involve equity positions in the property, not so with creative financing which is the flip side of wholesaling. Sensei explains: Say that a wholesaler is looking for a property with a minimum equity position of 20 percent. A property that doesnt meet his minimum will make him walk away from it. But someone like myself will come in and structure a deal with that same property. Say that a property is upside down, most people at this point would go the short sale route. But if you dont want that short sale to negatively reflect on your credit report, then youll want to use a different method like subject to. I can take this upside down property and package it up and sell the paperwork to another home buyer or investor while leaving the mortgage in place. What ends up happening is the seller releases his right to the deed with the original debt remaining in the sellers name and the new buyer starts making mortgage payments directly to the lender. This creative financing technique is called subject to (purchasing subject to the existing financing). While Sensei references the saving of his credit rating as the principal reason a seller would opt for subject to financing, he cites other benefits as well. Their biggest benefit is that they dont have to get a loan. The loan is already in place. A deal like this may not be obvious to a newcomer, Sensei points out that most real estate investment firms dont do deals of this type. Theyre not multifaceted. They are mostly salesman working the cookie cutter method of simple transactions, and they work off commission, which is typically capped. As an investor, we (BBI) dont just assist buyers and sellers; we present opportunities to homebuyers and investors and we dont work off commissions. We work off profits, which are not capped. So when it comes to creating cash flow in the coming year, Sensei and his colleagues at Black Belt Investing invite you to consider wholesaling, rehabbing, and creative financing.
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Inflation Isnt Coming ITS HERE!

Over the last five years, the growth rate between the two indexes is much closer, but the all items index is still growing approximately 17% faster than the Core index. Another point of comparison against the Consumer Price Index is the Prot the Financial Freedom Report, we have been warning about inflation for quite a while. For a long time, the Consumer Price Index has shown what appear to be very benign levels of price increases, leading some to believe that the monetary expansion required to finance profligate government spending can be done without consequence. However, analysis of both the methodology that is used to create the core consumer price index and a handful of other price indicators tells a significantly different story. The most commonly quoted price indicator is the Core CPI that excludes food and energy. The stated purpose of this methodology is to show a less volatile price indicator. However, food and energy costs are very real and their absence from the prevailing index does not make them any less of a necessity. One of the more common index comparisons is the Core CPI vs. All-Items CPI. The disconnect between these two indexes is very stark across the last four quarters, and since Q408. Most of this is due to recent spikes in the price of energy.
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from Jason Hartmans Financial Freedom Report

ducer Price Index or PPI. These two indexes differ in a very significant manner that makes their contrast even more telling. The Consumer Price index is based on a weighted basket of goods that is adjusted over time. The weightings of

different areas are steadily changed, and the weightings within categories are changed to reflect perceived changes
PAGE 16 2012

in consumer preference. In contrast to this, PPI tracks specific products and commodities over time. Thus, PPI is a much less subjective index, since it tracks specific products and specific commodities, tracking their aggregated price changes over time. By adjusting the weightings and allocation of the CPI Basket it is possible to suppress the reported rate of inflation very significantly. Comparing the core CPI, all-items CPI, PPI for finished goods, and PPI for all commodities tells a very stark story. This unmistakable story is that over the past few years, products and commodities have been exploding in price while the reported CPI index has remained benign. Even when compared across a five year time horizon, the growth rate of PPI finished-goods and all-commodities indexes have been nearly double that of core CPI. This trend indicates that the price of real products and real commodities are growing twice as fast as we are being led to believe. This observation merits further analysis into the component parts of the Consumer Price Index. In order to provide a basis of comparison, it is useful to compare the growth rates of the Core CPI, Food, Housing, Medical, and Energy. Since Q408, the two aspects that stand out the most significantly are energy and medical costs. Thus, it is quite interestreWEALTHmag.com

ing that Energy is completely ignored in the Core CPI, and medical is assumed to be a mere 6.6% of the all items consumer price index. This is where the subtle problems of reported CPI figures come into play. The index assumes that people spend less than seven percent of their income on medical care. However, it is interesting to note that health care represents approximately seventeen percent of the US economy. The dramatic growth rate of heal care costs is being hidden by suppressing the weighting of medical costs in the reported price index. One of the principal factors that is

and more places. The only place where inflation seems to be absent is in the government reported price indexes. The

reason for this is quite clear the political authorities do not wish to be held responsible for pursuing financial policies that escalate prices and rob people

class or wealthy people. In short, inflation has been engineered by the government to transfer wealth from you to them, and also carries the effect of transferring wealth from the poor to the rich as their asset values and rents inflate. None of us possess the ability to singularly impact inflation. However, we do have the ability to singularly change the effect that inflation will have on us. By following the Financial Freedom Report system of prudent investing, it will place you in an advantageous position for the inflationary environment that has already arrived and is not likely to end at any time in the near future. Action item: Shift your personal and financial decisions toward defending

As the Federal Reserve continues to print more money, it dilutes the supply of money available in the global marketplace, and pushes up nominal prices. The area where inflation lands first is in necessity items like food and energy.
holding the CPI index down is slow growth in the housing segment of the index, which represents approximately 41.5% of the total index weighting, and reflects the equivalent rent of a residence, instead of the market value. The obvious driver of the suppressed housing costs is financial crisis and ensuing recession that has softened the equivalent rent for primary residences. However, most people dont live in the world of an index. They purchase a home with a mortgage that has a fixed payment, which doesnt go down when the price of their home decreases. Other people sign a lease for a house or apartment that frequently lasts one year and doesnt go down if housing demand softens. The summation of all these factors clearly points to one inescapable conclusion. Inflation isnt coming, and it isnt on the horizon; its here! The signs of price inflation are showing up in more
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against inflation with high quality fixedof their purchasing power. rate debt that generates rental income The extended impact of inflation is a and is attached to real assets. The illusteady confiscation of peoples purchassion of stable prices cannot endure ining power by the government. As the Federal Reserve continJason Hartman has been involved in several thousand real ues to print estate transactions and has owned income properties in 11 more money, states and 17 cities. His company, Platinum Properties Investor it dilutes Network, Inc. helps people achieve The American Dream of the supply financial freedom by purchasing income property in prudent of money markets nationwide. available in Jasons Complete Solution for Real Estate Investors is the global a comprehensive system providing real estate investors with marketplace, education, research, resources and technology to deal with all and pushes areas of their income property investment needs. up nominal Contact him at www.JasonHartman.com or 714-820-4200. prices. The area where inflation definitely, and the faade will eventually lands first is in necessity items like food break. When it does, you do not want to and energy. Furthermore, it impacts be among the masses who are clamoring poor people the hardest since they for real assets you want to own the spend a much higher percentage of their real assets that people are clamoring for. income on food and energy that middle
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The Hollywood elite have been known to dabble in real estate, some amass even greater fortunes than in their acting careers.

Celebrity Real Estate Moguls

by Stephanie Mojica
ne of the perks of being a celebrity is the ability to buy mansions that even some doctors and lawyers can only dream about. Celebrities snagging prime real estate is definitely not new, but recently some savvy stars have caught on to the importance of developing multiple streams of income. Flipping houses is a growing trend among Hollywood stars, ranging from Miley Cyrus of Hannah Montana fame to iconic actress and singer Cher. Decades before the Flip This House trend became so popular in and out of Hollywood, acclaimed comedian and activist Bob Hope was an accomplished real estate investor. In the 1960s, he and his

wife Dolores donated 80 acres of land to be used for a future Palm Springs medical center. Most of their fortune, estimated at more than $500 million when Hope died in 2003, came from real estate holdings and sales rather than acting revenues. Miley Cyrus, an actress with her own accomplishments and also the daughter of Billy Ray Cyrus of Achy Breaky Heart infamy, started eyeing a second career as a real estate investor at the tender age of 17. She could not legally buy her first house until she was 18, but quickly caught up for lost time. One of her recent investments, a 5,173square-foot home on 1.15 acres of land in Studio City, quickly netted her about

$500,000. Now 19, Cyrus is earning a more than respectable second income from flipping similar properties throughout Studio City and Toluca Lake. Judging by her recent purchases and sales, she clearly prefers homes with unobstructed panoramic views of Los Angeles and spacious pools as well as hot tubs. Another famous real estate investor is Vanilla Ice, best known for his 1990s rap song Ice Ice Baby. Unlike many fellow celebrities who also invest in real estate, Vanilla Ice aka Rob Van Winkle has spoken publicly finding plenty of financial success flipping houses. Austin, Texas >
Continued on pg. 59

Miley Cyrus started eyeing a second career as a real estate investor at the tender age of 17. One of her recent investments, a 5,173-square-foot home on 1.15 acres of land in Studio City, quickly netted her about $500,000.
Right: Miley Cyrus Photographs: Dreamstime.com
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reWEALTHmag.com

rrive early or you may while worknot be able to find a ing regular seat at the popular jobs as real Investors Resource estate apCenter of America (IRCA-Los praisers, Angeles). The only free club in but through Southern California serves up their indelicious finger foods and showvestments cases some of the biggest names managed to in real estate (like Bruce Nor- Robyn Love, Peter Fortunato and Steve Love retire much ris, Dave Lindahl, Mike Cantu, earlier than Robyn Thompson, Bob Diamond, Vena anticipated. Now, they dedicate their lives Jones-Cox, Frank McKinney, Tony Alvato spreading their message of financial freerez, Jack Miller, Peter Fortunato and John dom through sound real estate investing.

LA Clubs Host TOP Leaders

So how did it all come about? The club was actually co-founded eight years ago jointly by Ron LeGrand and ourselves. He chose us to run the Los Angeles area group because we were his most successful students in this area, Steve Love recalls. But after starting ten groups nationwide, hed realized that hed bitten off a bit more than he wanted to chew, timewise, so he backed out to spend more time on his many other business endeavors. Love says the clubs mission was simple from the start: To introduce as many folks as

possible to this incredible business of real estate entrepreneurship and investment, to train and inspire them to do their best and reach their own goals and, of course, to have fun while doing it. He says its their way of giving back and helping others in this wonderful real estate business that does so much for so many. Although Love admits that the first few years were challenging, the club grew in size and influence, at times accommodating as many as 350 people. Its reputation for credible education and serious networking attracts many, including other local club leaders.

Schaub). Hosted by Steve Love and his wife, Robyn, the gracious couple extend a welcome so warm you feel as if you were invited into their home. Their hospitality and first-hand knowledge of real estate deal making rounds up hundreds of loyal followers into the Four Points Sheraton ballroom in Culver City on the first Tuesday of every month at 6:30 pm. The club recently changed its name to Prosperity Through Real Estate, which is a better reflection of the founders mission. The Loves began their career in real estate part-time

As a matter of fact, their good friend Phyllis Rockower, founder of The Real Estate Investors Club of LA (REIC of LA), asked them to join her to operate her monthly club too. After 17 years at the helm, Rockower wanted to scale back to devote more of her time to doing deals and one-on-one mentoring. As the longest-running club in Los Angeles, REIC also hosts hundreds of local followers every month as well. So now we run two club meetings every
Continued on pg. 29

INVEST WITH CONFIDENCE

I M M E D I AT E C A S H F LOW I M M E D I AT E C A S H F LOW D D
PROFILE OF YOUR FUTURE PORTFOLIO PROFILE OF YOUR FUTURE PORTFOLIO

iscover the lowest-risk, highest-quality residential investment properties in the iscover the lowest-risk, highest-quality residential investment properties in the country. Using sophisticated methodology, the best investment properties are country. Using an experienced investor and rehabbed beautifully to secure the carefully selected bysophisticated methodology, the best investment properties are carefully selected by an experienced investor and rehabbedinstant cash to secure the best tenants. With competent property management, and beautifully ow, your best tenants. With competent property management, and instant cash ow, your investment pays worry-free dividends from day one. investment pays worry-free dividends from day one.

Typical Property Price $139,000 Price: $110,000, fully renovated, built 2005 Rent $1,395 Currently Rented for renovated, built 2005 Price: $110,000, fully $1,195 Year Built 2001 Currently Rented for $1,195
Mention REI Voice Magazine and receive one-year of free Mention REI Voice Magazine andyour rst purchase. free Mention Realty411 or reWEALTH and receive 1 of property management with receive one-year year premium home warrantywith your rst purchase. property management with your first purchase.
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Contact me for a Contact me for a free cash flow analysis. free cash flow analysis.

TOM WILSON, President TOM WILSON, President 408-867-1867

TomKWilson@earthlink.net 408-867-1867 TomWilsonProperties.com TomKWilson@earthlink.net TomWilsonProperties.com

PAGE 19 2012

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by Bonnie Laslo & Linda Pliagas If any of these stumbling blocks sound familiar then its time to take action and access experts who can provide simple solutions to the most common real estate challenges. Over the years, Whiterock Capital, Inc. has been there to provide answers to novice investors just starting out as well as experienced investors who realize they are to busy in their demanding careers to take on real estate investing alone. We help individuals select the right investments and even assist them with the initial decision making as to what properties in which to invest, Edrosolan explains. We are there all the way through the investment cycle, from purchase, to rehab, and to the successful close, he adds. The Whiterock Capital Inc. niche has specialized in the rehabilitation of distressed properties. They turn toxic assets into performing properties in two states: California and Arizona. Their network of wholesalers, bird dogs, asset managers, agents, and brokers give them ample pickings of buys. Besides their formal professional network, they also rely on bandit signs and other creative marketing which puts them in direct contact with

Richard Edrosolan & Anthony Patrick of Whiterock Capital, Inc.; Photos by John DeCindis

A
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fter nearly 40 years of cumulative hands-on real estate experience, Richard Edrosolan and Anthony Patrick, owners of Whiterock Capital, Inc. know some of the obstacles that face novice investors. Many of the same questions are repeatedly asked: * How does one get access to discounted properties? * If stable monthly income is needed, which property should be purchased and where? * Is commercial real estate to risky for a newcomer? * Should I buy for cashflow our appreciation? In California or out of state?
PAGE 20 2012

Solid Foundation

Whiterock Capital Offers Clients a

distressed homeowners. Whiterock Capital, Inc. is interested in multifamily apartments complexes, bulk house packages, pre-scrubbed bank tapes, as well as individual single family deals. When a property is purchased, improvements are planned immediately. Just putting in granite counter tops, stainless steel appliances, and knocking out a wall or two can make or break an investors exit strategy, Edrosolan explains.
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For the buy-and-hold investor simple staging and curb appeal is important because it can equate to a lower vacancy by attracting a longterm tenant.

3 Ways to Find Funds for Deals

Finding money to invest in real estate is one of the most cited obstacles. The challenge of having to scrape money by saving can be a painstaking chore.While it can take years of discipline to accumulate funds, many investors may already have access to the resources they need without even knowing it. Whiterock Capital, Inc. shares three often bypassed ways investors can find the money they need to expand their portfolio. Are you a home owner with a fair amount of equity? Is so, you should consider obtaining a home equity line of credit (HELOC), as the rates have never been lower. Additionally, by establishing such a line of credit, you can use the equity in your home (or equity in an investment property) to invest as you choose. Once established, your line of credit is usually good for up to 10 years. Most HELOCs only require minimal monthly interest payments on your outstanding balance. You can repay the balance at any time without a prepayment penalty, and the interest paid is generally tax-deductible. If you are a participant in your companys 401(K) retirement plan, you may be able to borrow money (not withdraw as that might create tax penalties) from your 401(K) plan. Recently, a Whiterock Capital investor borrowed the maximum $50,000 from his 401(K) plan, citing financial hardship as his reasoning for the loan. Because of his reduced hours at the company, the hardship loan was granted. He then purchased a bank REO in Riverside County for $56,000. He spent $5,000 to rehab the home and subsequently sold it to an FHA first time buyer for $100,000. At the close of escrow he repaid his 401(K) loan in full, but he was over $25,000 wealthier than he was before the loan. If you have not heard about a self-directed IRA (Individual Retirement Account) as of yet, not to worry, most people havent, either! The vast majority of financial institutions want simplicity in their product lines and so they only offer the plain vanilla deposit accounts, certificates of deposit (CD), stocks and mutual funds. Those assets are much easier to manage, and more importantly, generate more revenues for those institutions. Fortunately, a handful of companies will set up self-directed IRAs, which enable you the investor to invest as you choose such as in real estate!

Edrosolan and Patrick know that the right education and training makes a difference. In fact, both of them met many years ago at a bootcamp seminar. While discussing their mutual interests and philosophies on real estate, they realized that they had much more in common than just investment strategies, and they soon began working as a team. Disillusioned with the grandiose promises offered by many of the educators at the time, they formulated their own techniques and a system model based on their past investing experiences. After purchasing hundreds of properties already, they are also on pace to double current holdings and volume during the next year. Whiterock Capital, Inc. is also expanding their client base to include others who are also interested in taking advantage of purchasing distressed assets in either the California or Arizona marketplace. Edrosolan and Patrick have simplified the investing process for their clients. Patrick explains: Clients receive wholesale buyer lists, in-house programs, financing (no credit is required),

Education is a Pillar for Success in Real Estate

HIDDEN HOMEOWNER EQUITY

HAVE YOUR BOSS CHIP IN

INVEST WITH A SELF-DIRECTED IRA

Richard Edrosolan
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secured trust deed investment programs, private lending opportunities, and professional administrative consulting. Their streamlined process has created successful and profitable results for many residential and commercial investors. We have systems and training modules both to develop your skills and enhance your knowledge, not only now but also throughout your future as a real estate investor, Edrosolan adds. Once an individual is a part of the Whiterock Capital investment team, they will also have the benefits of mentoring, but they will not be instructed by someone reading out of a manual from out of state. Instead, Patrick says they will be personally mentored by knowledgeable individuals who are all successful active real estate investors themselves. You will be supported in your education not only by your mentor, but by an assistant and a dedicated coaching director, all who are personally involved in your success, Patrick adds. A Whiterock Capital mentor is with the investor from the beginning of the program, >
PAGE 21 2012
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Richard Edrosolan and Anthony Patrick of Whiterock Capital, Inc.

Whiterock Capital, Inc. clients receive wholesale buyer lists, in-house programs, financing (no credit required), secured trust deed investment programs, private lending opportunities and professional administrative consulting.
Besides having a direct pulse on their investments Edrosolan has managed various ways of capital raising and arranging project funding over the years. His efforts maintain Whiterock Capital, Inc. with a stable and ready funding for expansion of its current assets and holdings. Currently, the principals invite submissions of houses and mortgage notes up to $200,000, as well as commercial apartment complexes up to $5 million. These professionals understand win-win structures, and the number of joint venture projects increase daily. While many investment firms spread their holdings among several cities and states, Whiterock Capital Inc. prefers to focus on limited markets and instead become experts in those areas. For the past few years, their attention has been captivated by Phoneix and an area in Southern California known as the Inland
PAGE 22 2012

first in helping them to select the best investment in their area of preference, all the way to a successful close of escrow. Your Whiterock Capital personal service continues with quick telephone and email responses to your questions and inquiries, seven days a week, 365 days a year. Patrick explains. Portfolio risk management is the utmost goal. The principals of Whiterock Capital, Inc. are experienced rehabbers and property managers who continuously focus on ways to improve quality and the bottom line. Patrick explains: We are actively on site at these properties looking over everything in an effort to save our clients money and increase cashflow. This type of attention to detail with a proactive team inclines investors to build a long-term relationship with the company, and some clients have been doing business with Whiterock Capital, Inc. since the formal inception of their company three years ago.
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Whiterock Capital is Focused

Empire. Price points are very attractive, but proceed with caution. With interest rates at a historical low, it is very tempting to acquire properties fast without thinking of the responsibilities that real estate brings. Without a team and mentors to guide overleveraged, overwhelmed investors, their exuberance can get them into trouble. Patrick is an experienced inspector and property manager who is continuously focusing on ways to improve quality and the bottom line. The companys inventory of properties is worth a private viewing for those looking for startto-finish customer service. Whiterock Capital, Inc.s mantra of You choose the opportunity we do the work gives investors simple answers and easy solutions. Its a refreshing concept to an industry once plagued with complexity and mistrust. Visit www.whiterockcapitalinc.com or contact them toll free at: 877-228-6060
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Realty411Guide.com

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Some providers call their offerings turnkey, et me tell you but are missing some or about two great all of the four essential real estate deals elements. If the compafor the busy prony selling you the propfessional. Both erty does not possess the are single family homes that deed, it is not a turnkey. have been renovated and are If the seller has yet to offered as turnkey rental inTom Wilson complete renovations, vestments. Investor Special the property is not turnkey. If the prop#1 is priced at $100,000 and rents for $1,200a 1.2% rent ratio. Investor Spe- erty does not have rent paying tenants, the cial #2 is priced at $100,000 and rents for property is not turnkey. If the seller offers $1,050a 1.05% rent ratio. Which prop- to look after the property until you find a property manager, the property is not erty do you choose? One really is a better deal than the oth- turnkey. Now that you understand the four eser and Ill let you know why later. However, if instead of choosing, you thought, sential elements that define a turnkey I cant make a decision based on such property, how do you evaluate the myriad limited information, then youre in the opportunities available to you and get to top 50% of real estate investors. In a mo- the top of the class? By analyzing how ment, Ill help you get to the top of the each deal rates in four major categories: class by understanding the crucial data Location, Property Condition, Provider, required to properly analyze a turnkey and Property Management. deal. Your test will be to use this informaAnalyze the Location tion going forward to make investment Location will make or break a deal, and decisions based on information gathered, not on the slickest presentation or the per- were not just talking about corner lot or cul-de-sac. Understand what is going on sonalities involved. First, why turnkey investments are in the region as well as the neighborhood. not created equal. To the top tier turnkey The best long-term holds have the followproperty providers, turnkey means that ing in common: all the elements of the investment are in Broad based economy with many differplace so that all the investor has to do is ent employers turn the key on their bank vault and Growing population watch the money flow in. Clearly there is High income, high education, young more to it than that, but not all that much families more. By our (and I mean the top pro- Low vacancies, lower than average foreviders) definition, a turnkey investment closures property has ALL of the following attri- Stable home prices year-to-year (no big butes: 1. The provider is in possession of swings) the deed, 2. The property has been care- Business friendly and landlord friendly fully selected and renovated with renters local government in mind, 3. The property has been leased, Understand the Property Condition 4. A property management company is acMake sure you are getting what you tively engaged in managing the property. After the investor purchases the property, pay for. Really nice properties attract rethe property manager simply redirects the ally stable renters. Pay close attention to the quality of the renovation. High quality rent checks to the investor.
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The Tale of Two Turnkeys

by Tom Wilson

equals less maintenance and more money in your pocket. Great properties share these common traits Built within the last ten years No structural problems High quality carpet, flooring, tile, fixtures, and appliances Nice landscape Good floor plan, usable back yard, 3 or 4 bedrooms, at least 2 baths, 2 car garage Architecture that fits into the neighborhood and appeals to tenants and future buyers Reference Check the Seller Do you really know who is providing this turnkey? Handshakes make me feel good, but a reference check makes me feel better. Do not hesitate to ask for references, to check the providers on-line reputation, and to screen for lawsuits and bankruptcies. A reputable provider will happily answer all your questions and has dozens of happy customers ready to sing their praises. If you come across any of the following, beware! The person you are dealing with is an agent or referral service Any part of the deal seems to-goodto-be-true You dont get a firm answer about how many of their investors get loans and how often they fail an appraisal. A reputable provider will seldom fail appraisal. You are asked to take over a contract for a raw property and cover all of the unknown expenses for conversion to a rental. The seller says that with a little carpet and paint the property will be rented in 3 weeks. The provider does not own properties in the same area that they are recommending to you The provider does not own clear title to the property (check the county records!) Interview the Property Manager Do you really want to question whether youre being overcharged to fix a leak? Do you want to worry about a lease not
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... how do you evaluate the myriad opportunities available to you and get to the top of the class?
being renewed because the property man- that needs replacing because the seller ager did not respond to your tenants? It painted over rotten wood, the hot water is maintenance costs and occupancy that heater needs replacing (and there is no will make or break positive cash-flow. warranty), and the HVAC needs repair. This is why competent property manage- His bill is greater than the net income that ment is essential. Just as when selecting a was predicted for the first year. The city provider, check the references of the prop- he purchased in has only one industry, and within a year, the one new UK manufacerty manager. Look for the following Endorsed by the turnkey provider and turing plant that was scheduled to come to town and employ 2,000 people gets postmanages the providers own properties Many years of experience and ample references Fees no greater than 10% for up to 4 properties with full service and half of one months rent for new leases Experience managing the same type of property you are purchasing (houses, not apartments or commercial) Many other rentals in the same area so they do not need to make a special trip to check up on your Sams Property: Mobile, Alabama property Built: 1962 Yes, theres a lot that goes into Purchase Price: $100,000 analyzing a turnkey property, but Down Payment: $20,000 it is YOUR money. Ask questions Closing Costs: $2450 until you are satisfied, and by all Prepaid Taxes & Expenses: means, visit the property before $2200 you buy. Additional Closing Funds: $5000 Back to the Beginning Rent Estimate: $1200 Back to the two investor specials Rent Actual: $1000 at the beginning of this article, Repairs Year#1: $3600 which are real case studies. (Names have been changed to protect the Cash out of pocket Yr#1: duped!) $32,850 ROI: Yr#1: -3% Investor Special #1 priced at $100,000 and rents for $1,200, purchased by Sam. During the loan poned indefinitely because of economic process the appraisal for the property uncertainty in Europe. Adding salt to the came in short and Sam shells out another wound, Sams tenant fails to renew his $5K to close the deal. After closing, Sam lease. Sam experiences another 3 month finds out that the rent was a market esti- vacancy and he has to drop the rent to mate and after waiting for 3 months and $900 because of the now weaker rental dropping the price twice, he finally gets it market. Sam is very sorry he didnt do his homework. rented for $1,000/mo. Investor Special #2 is purchased by Within 6 months Sam is notified that the 50 year old house has exterior trim Mary for $100,000 and rents for
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$1,050. The house is only 10 years old, comes with a premium home warranty, is already leased and the appraisal came in at value. The employment in the state is the highest in the country, the city has 25 Fortune 500 companies with diverse economies, the population is growing, rents and values are appreciating. Marys first tenant leased for three years. When it did turn over, the property required mini-

Marys Property: Dallas/Ft.Worth Built: 2002 Purchase Price: $100,000 Down Payment: $20,000 Closing Costs: $2500 Prepaid Taxes & Expenses: $3300 Additional Closing funds: $0 Rent Estimate: $1050 Rent Actual: $1050 Repairs Year#1: $0 Cash out of pocket Yr#1: $25,800 ROI: Yr#1: 9.5%

mal make-ready. It was leased again at $1,125 before the current tenant moved out. The cash flow exceeds Marys expectations. Mary earns an A+ because she purchased in a top, low-risk, metro and from a reputable provider. For more information about Tom Wilson, be sure to visit his website at: www.TomWilsonProperties.com
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t was fourteen years ago that Missy McCall Hammonds found herself tiring of Corporate America. As she considered new employment opportunities, she set down a number of criteria: 1) the replacement of her corporate income, something she could succeed at, no gender limitations, and no limit on the amount of money she could earn. It wasnt too long before the real estate industry piqued her interest. She looked at the various niches available and decided that the rehabilitation of properties was just the ticket for her. I liked taking up new things and making them pretty. She says and warns: However, I fully understood that rehabbing was a lot more than making things look pretty; its updating the electrical and plumbing [systems] and knowing how a toilet works. Its a full process of the mechanics and the carpentry. It meant learning a lot more than painting and making it look nice. Missys escape from the 9-to-5 grind was successful because she researched the industry for one year. She strongly suggests individuals starting a new business to begin with a plan and budget. Coming from corporate, we had it drilled into our heads that with every transition we wanted to make we had to find out all the possible obstacles and then found solutions for them. That business plan served Missy in good stead as she navigated the many challenges of her nascent business. Her real estate business began with sales to homeowners. When the financing completely evaporated, she was able to move seamlessly into the investor mode. Your willingness to change and adapt to your environmentis the key to your success. Who I was when I started my business was someone that sold retail to homeowners, she says. If that was the only busi-

Hello Financial Freedom!

by Isaac Newkirk III
ness I had in 2007, when all financing went away, I would not be in business today. Missy refers to the market in Butler County as linear, which means it doesnt have the highs and lows that are present in so many other areas. Property values in some areas have decreased, but in many areas theyre actually on the rise. We have a number of new businesses moving into our area and we have a growing population, which means an increased demand for properties. A professional person who understands that real estate is a good investment is the kind of individual who typically comes to her enterprise. My investors understand that real estate is an important part of their portfolio but, as busy professionals, they dont want to manage it; they just want it to act like stocks and have a return on their investment and for it to be hassle-free. My typical investor is 40 plus. At that point in their lives, theyre looking more towards their retirement and thinking long-term. Is America on sale? Missy believes that it is. She suggests that you come to Butler County, Ohio. I think we have another three years of foreclosure inventory. And thats because of government intervention in slowing down the flood of markets. It is readily apparent to those in the industry that the job market will play the principal role of success in the industry, and Missy is no exception. Without jobs, people cant make their house payments. And the job losses across America were staggering the last three years. Although total bleakness may exist elsewhere, Missy says that job market is not so glum in her home county. Our unemployment is typically one percent below the national average. Missy believes that the stability of the marketplace along with demand for properties would be the primary reason for investors to include Butler County properties in their portfolio. With an occupancy rate hovering at 98 percent, an investor would be hard-pressed to find a more stable investment. Visit Missys website: www.RetireWithRealEstate.biz

Goodby e Corpor ate America

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Why the Real Estate Industry has Seriously

Dropped the Ball!

by Marck B. de Lautour, BBA MBA Owner, SBD Housing Solutions

he Real Estate Industry has seriously dropped the ball! Africa and Hong Kong. Most have never And this is not a recent ocseen the assets that they own, and yet are currence. cashing the monthly rental checks every The big winner through the month like clockwork. past few decades has been the financial As an all-inclusive real estate investservices industry. People have to invest their money somewhere and when real estate agents, brokers, ...the fact that the RE industry has languished behind in and property managers made it allowing the average John Doe an avenue to invest his FAR TOO complicated to invest in houses, they turned to the hard earned money in Real Estate is a real shame. sophisticated and finely tuned model of the stock market. This ment firm, we specialize in building well-oiled machine has done a great job of a bad thing! Not at all..but by comparison, the fact that the real estate industry wealth for our clients. Taking a leaf from catering to those in their wealth accumuhas languished behind in allowing the the Financial Planners book, we actually lating phase of life. And it seemed that average John Doe an avenue to invest his take the time to sit and discuss a plan of only those real estate investors that were hard earned money in Real Estate is a real action with our clients; where do they hands on with their investments were shame. want to invest, what cash do they have Now dawns a new age of investing.. available, do they plan on leveraging their where geography and physical presence assets, when will they be looking to use mean nothing. In the same way the cash flow as an income source for that you dont need to drive to retirement, all of which are just pieces of a Atlanta and tour the Coca very personal and unique puzzle. Cola plant to feel comfortAt SBD Housing Solutions we handle able investing in Coca the entire operation for our clients. From Cola stock, SBD Houstargeting properties, the acquisition, utiliings detailed 9-page ties, construction estimates, project manInvestment Prospectus agement, remodel, bill payment, leasing, more than prepares and property management. Our clients an investor to make know that the value added is in the an informed buydetails. Being able to invest in Real Estate ing decision.SBD with the same ease as the stock market has Housing Solutions always been the goal. is a Kansas City Although I am not nave enough to based operation think I can change an industry single but has clients handedly, I believe that we in the Real from as far as Estate services industry can all do our part Brazil, the U.K., to bring some credibility back to the sound Australia, South investment option that is..housing.

the ones able to buy and properly manage rental property. The fact that Financial Advisors have ingrained themselves in American culture to the point that anyone wanting to put some money aside for retirement is naturally going to do it through mutual funds or stock investments says a lot about their customer service. Not that investing in the stock market is

LA Clubs Host Top Leaders pg. 19

month, Love explained. Its interesting to training seminars, personal real estate note that the clubs are less than a mile apart deals, two actives sons and even speaking and yet both of them draw large numbers of on up to five one or two-week cruises per investors consistently. year, the Loves are certainly busy, yet they REIC of LA is normally held on the sec- always manage to have time to encourage ond Tuesday of each month at 7:30 pm at the Double For more information about IRCA-LA Tree Hotel in Culver City, (now Prosperity Through Real Estate) but its always best to call or REIC of LA, contact: 818-217-4630 first as they sometimes have to move the location www.irca-losangeles.com due to large conventions. www.prosperitythroughrealestate.com REIC of LA, founded by www.realestateclubla.com Phyllis Rockower, has a modest fee of $197 per year, which covers the cost of a more ex- and motivate others to not give up on their pensive venue and other membership ben- goals and dreams of financial freedom by efits too. Between juggling two successful investing in real estate. clubs, a weekly radio program, monthly article by Linda Pliagas

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Short Sale Investors Receive an Edge

For 10 years Bill and Dwan Twyford have been leaders in the world of short sales. Their mission of helping distressed home owners who are under water have led them to a life of success and acclaim.
by Bonnie Laslo
learned the business the same way through a direct experience. They met at a REIA group, fell in love, got married, raised three amazing children together, and turned their personal struggles into their business. They joke, Our MESS became our MESSAGE! They believe their success is partly due to the fact that homeowners can relate to them because Bill and Dwan get it. Soon after they began helping homeowners they started teaching real estate investors how to do what they were doing. Next thing you know they wrote two-best sellers, were guest speakers on many TV shows like MSNBC and Fox & friends, as well as speaking on stages with Donald Trump, Robert Kiyosaki, SuzeOrman, and many others. Assisting as many people as possible in these economic times is a purposeful way of making money. Sharing short sale information to everyone who needs it will help families sleep better at night, Dwan says. Its a two-fold event, helping the homeowner also helps you and your family. Short sales give struggling families a fresh start, which resonates with the couple because they both know what its like to need a second chance, adds Bill. When I interviewed Dwan she shared a funny story with me, She was singlehandedly raising a child and struggling at a string of dead-end jobs. She knew real estate would create a sense of stability for her daughter. She often took her daughter along and Aylawould play while mom fixed-up the properties. Dwans daughter (who is now 23) became so fascinated with fixer-uppers that when she was a child she went exploring a boarded up home nearby with three of her nine-yearold friends. The neighbors called the
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eal Estate is cyclical; therefore, certain niches may work better than others during given markets. One thing that is NOT cyclical is Bill and Dwan Twyford, the Nations most sought after real estate investing experts! Bill and Dwan have devoted 20 years to helping people: Investors and homeowners alike. They help investors become wealthy and distressed homeowners get a fresh start. One strategy that has worked especially well the past few years has been negotiating short sales. A short sale is when a house is sold for a lower amount than the mortgage owed on it. Many properties currently have large loans that are valued for far less,resulting in negative equity. While short sales are nothing new (it has been prevalent since Dwan started the trend back in 1996 she actually wrote
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Bill and Dwan Twyford

the very FIRST short sale program all the other gurus use today), a sea of information and a ton of confusion exist on this topic. Due to the complex and sensitive nature of short sales, its important to learn from experienced educators who have been negotiating short sales for many years. Bill and Dwan use a THREE-STEP PROCESS that gives them and their students an average 75% closing ratio! That is unheard of in this crazy industry, yet they make it happen year after year! > Bill Twyford,a former paint contractor and single dad to two children, went through a divorce and a foreclosure and learned this business through his own personal experience. > Dwan Bent-Twyford,a single mom and former waitress at Dennys, also went through a divorce and a foreclosure and
PAGE 30 2012

authorities as they could see movement in the vacant property. Upon arriving, the police were shocked to find that the intruder was a child claiming to be an investor. My mom and I do this all the time, the 9-year-old said innocently. We look at the houses and buy them. Dwan giggles as she recalls this story as she was so proud of her daughter while the other mothers were horrified! Dwan says that in order to balance her limited time she made investing a family affair. While she worked in the homes rehabbing them, her daughter would be by her side playing and painting. One of the things Dwan loved about Bill is that he was doing the same thing: Allowing his kids to paint and play while he rehabbed his own fixer-uppers. The Twyfords went through the trials and struggles that many people in a short sale situation are currently in. It is for this reason that they both approach their investing and short sale education from the perspective of the homeowner.The homeowners know and can tell if a person cares for them or not, Bill says, adding: Always do what is right for the

as most have never closed a real estate deal and most of the ones who claim to have closed deals have closed less than five before they wrote a program. In fact one guru actually took Dwans original program and photo copied her testimonials (with the page numbers and all) and placed them in his own program. Another shows copies of his checks from speaking events and claims they are real estate deals! The Twyfords have closed over 2,000 documented deals and feel

Due to the complex and sensitive nature of short sales, its important to learn from experienced educators who have been negotiating short sales for many years.
homeowner. They have one chance to start over while investors have hundreds of opportunities to make profit. Bill advises investors to keep in mind that the banks loss mitigation departments could result in tight margins. Its important to look at the big picture and press forward with getting deals complete. This tenacity, he says, is the key to being successful. The Twyfords offer their #1 tips to new investors: Stop buying every program that comes down the pike that promises to do all the work for you, make you millions while you sleep, and allows you to never speak to a bank or distressed homeowner. They say to stick to ONE person who has a proven track record and let that person teach you to run the same multi-million dollar business that they themselves are running. They say to beware of many of these gurus
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to their website: www.InvestorsEdgeUniversity.com. They specialize in all areas of real estate investing: Wholesaling Short Sales Rehabbing Rentals Bulk Buying Subject Tos Rent to Owns Forensic Audits And so much more. These are just a small sample of the incredible programs they offer to make you the best investor possible. I have interviewed MANY investors over the years and I have to honestly say that Bill and Dwan are top-notch! Their love of the business, their ethics, their desire to truly help others is absolutely second to none! Although I am a writer, after speaking to the Twyfords Im going to give real estate investing a crack myself! Ill write a follow-up after Dwan helps me close my first deal! To speak to Bill or Dwan personally Bill has given me permission to give our readers his CELL phone number 303-870-8851. He said to tell him that Linda sent you and that he will give you a once-in-a-lifetime deal on his programs and some FREE coaching to ensure your success!
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with that kind of experience they are your absolute BEST BET for success because you will do exactly as they do every day MAKE MONEY! IN OTHER WORDS WORK WITH THE TWYFORDS! An investor should educate themselves as much as possible before even attempting to negotiate a short sale, wholesale a property, rehab, or invest for long-term wealth. In the spirit of sharing valuable information, the Twyfords have created hundreds of videos sharing their real estate investing knowledge which can be seen at www.youtube.com/ DwanBentTwyford. You can also get a FREE real estate investing program by heading
PAGE 31 2012

Its a Ladys World

San Diegos Newest Club Caters to Female Investors
by Linda Pliagas she feels this route is risky for new investors to take. She admits that she is not flip happy. Instead, the club founders want to emphasize the message that true wealth is built by holding assets long-term. Slow and steady wins the race every time, Willois says. She adds: The club has at its core the know-how to build foundations of adequate cash flow. Even though the clubs name has Lady in it, men are welcomed to the group. Currently, men make up about 40% of the attendees and 50% of their online community. As fate would have it, in January 2012, Jasons wife, Stacy, was scheduled to speak at the monthly event, but she was eight months pregnant at the time and realized she had over committed herself. So Jason eal estate investing is a diverse business. A savvy investor can make money in a variety of ways from flipping to land banking. Jasmine Willois and Jason Kennedys main strategy for success is buying and holding rental properties out of California, which is a niche that was rarely touched upon at the groups they frequented. So in February of 2010, Willois decided to start the Lady Landlords of San Diego with Stacy Kennedy, to educate others on how they could maximize their dollars and generate more cash flow outside of the Golden State. Willois says that many investment groups emphasize rehabbing for profit, however

Jasmine Willois and Jason Kennedy

Kennedy filled in for her and spoke about investing out of state, and at that very moment Willois knew she had to approach him with the opportunity to lead the club. Jason Kennedy joined in March of 2012. Willois describes Jason as a perfect fit because he is a true gentleman, one who is sensitive in fostering a non-competitive environment where ladies can reach their maximum potential. He too realized that the ladies of San Diego needed a gentler club where women could let down their hair without feeling intimidated. When one enters through the clubs doors, a sea of femininity awaits. The color pink is so boldly displayed in a variety of shades throughout the room: Pink balloons, pink table cloths and pink flyers. >
Continued on pg. 52

Justin Harrison - AL 205.616.3761 Julie Harrison - MS 601.291.0689

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