www.realty411guide.com | Vol. 3 • No.

2 • 2010 A Resource Guide for Investors
Tips for Long-Distance
Turn-Key Rentals
Around the Nation
Cash Flow from the
Comfort of Home
Mathew Owens, CPA, owner of
Buys & Rehabs
Rentals in Tennessee
from Redondo Beach
Get the Deals DONE
Learn Creative Real
Estate Techniques
from Dave Lindahl, Dolf de Roos,
Bruce Norris, Bill Gatten & more!
Celebrating the Largest
Issue with More Pages &
Opportunities than Ever!
photo by Sam Green
Print • Online • Network
<< Table of Contents >>
7 Secrets from the Master!
Dave Lindahl shares his latest
tips for Investing Success
9 No Drama in Dayton
Triple Net Houses Helps
Investors Proft without Issues
11 California Living with
Tennessee Cash Flow
Mathew Owens, CPA, owner of
OCG Properties, explains why
he loves to invest out of state
14 Beware of the Investment
Vampires by RBS Homes
16 Dolf & Carter: A Master-
mind with Arizona Investors
19 Enjoy a Tropical Paradise
with Phenomenal Returns
In search of their latest gem in
Nicaragua, Maverick Investor
Group traveled the world
22 Investor Nation Shares their
Blue-Chip Real Estate Strategy
25 Gi nger Maci a’s Thr ee
FREE Ways to fnd a Great
Wholesale Deal
27 Creative Real Es-
tate Techniques with
Educator Bill Gatten
28 Matt Malouf’s 10
Weeks to Massive,
Passive Cash Flow
30 A Visit with Sensei
at his 12 Rounds Club
35 Bruce Norris discusses the
“I Survived Real Estate 2010”
Charity Walk and Gala
37 Join the Ultimate Bus Tour
with MemphisInvest.com
39 Creative Financing Options
with MMG Capital, LLC
40 Philbin Capital Discovers
Deals in the Golden State
42 The Key to Success by Club
Founder Sam Sadat
45 Buy Bigger and Better Deals
by Kathy Fettke
46 Alternative Economics™
Club Debuts in California
51 Stop the Gambling!
Mike Woo, a “Rich Dad, Poor
Dad” protégé, advises clients
52 Is Your Mortgage Underwa-
ter? Perhaps a Short Pay Ref-
nance is the Answer
55 Pay Off Your Rental House
in Five Years with the Short
Term Retirement Program
57 Who’s On Your Team?
Insights by 360 Investments
photo: Sam Green
Bruce Norris
The Norris Group
Tommy Williams
2008 President
National Auctioneers
Sean O’Toole
Foreclosure Radar
Joseph Magdziarz
Vice President
Appraisal Institute
The Norris Group’s award-winning event returns September 17, 2010 to the Nixon Library in Yorba
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transition? Our Who’s Who Round Table Includes:
Last year, I Survived Real Estate 2009 focused on the dramatic shifts in regulation facing our industry. This year, our
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To nd out how you can participate as an individual or potential sponsor, see the back of this yer or visit ISurvived2010.
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Platinum Partners
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Beacon Economics
Sarah Letts
Director, Credit Loss Mgmt
Fannie Mae
Daniel Phelan
Mortgage Bankers
Peter Wayman
Sr. REO Director
Freddie Mac
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We can’t do this without your help! Businesses or individuals who are interested in
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2. JOIN the “I Survived Real Estate” Komen Walking Team and raise
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All donations are made directly to our Susan G. Komen Breast Cancer Walk Team so
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This formal dinner event includes visitation to the Nixon Museum, appetizers, 3 course
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for advertising. July 10
is the deadline for all money to be in place to ensure radio spots include the
selected sponsor. There may be more than 15 radio shows that are aired for the run of event.

Winner of seven communication, outreach, and fundraising awards.
Gold Sponsors
Benton Group
Delmae Properties
Elite Auctions
Inland Empire Investors Forum
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Las Brisas Escrow
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Investors Association (NSDREI)
Personal Real Estate Investor
Mike Cantu
Realty 411 Magazine
Rick & LeeAnne Rossiter
Starz Photography
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Westin South Coast Plaza
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What You Need to Succeed
First and foremost, to succeed as a real
estate investor you must be motivated. This
business isn’t for the undecided. You have
to want it bad enough to take action. Be-
cause where there’s a strong will, there’s
I was 100% determined to own real es-
tate. I didn’t let the fact that I had a less
than $800 in the bank stop me from buying
my frst property, a three-unit building in
my hometown.
Sure, I was nervous doing that frst deal.
I had no direct experience. No track record.
No personal wealth to use for collateral.
But I didn’t let any of that stop me.
This is why I tell beginners everywhere
that they can own real estate right now.
I don’t care if you’re broke like I was. If
you’re motivated to succeed, real estate —
and all the personal wealth it can generate
— can be yours once you know how to fnd
properties and structure the deal.

How I Found My First Building
I bought books and tapes on real estate,
even though I didn’t fnd much on apart-
ments. I went to local investment clubs,
networked with experienced investors, and
started “bird-dogging” for them (fnding
Don’t You have
better things
to do than deal
with tenants
and toilets?
Linda Pliagas
Lori Peebles
Matt Malouf
Carla Fischer
Ginger Macias
Lorie L. West
Sam Green
John DeCindis
Dave Lindahl
Charles Salisbury
Kelly Global Marketing
Lawrence Ruano
Lori and Mike Hampton
Emma Krull - The Dab Hand
Professional Distribution Solutions
KJ Banks: 805.377.6328
Manifest Media Partners
Nikolaos K. Pliagas - Chairman
Our Mission is to Educate & Inspire
INFO/FAX: 310.499.9545
Realty411Guide.com | reWEALTHmag.com
Main email: realty411guide@msn.com
Realty411 and Real Estate Wealth magazines are published in Los
Angeles by Manifest Media Partners (mailing address: 4221 Neo-
sho Ave., Los Angeles, CA 90066). Publishers are not responsible
for unsolicited manuscripts, photographs and/or other materials.
©Copyright 2010. All Rights Reserved. Reproduction without per-
mission is strictly prohibited. The opinions expressed by writers
are not endorsed by the publishers and/or editorial staff. Before
investing in real estate, seek the advisement of a trusted financial
adviser, attorney or tax consultant. Please invest responsibly.
Connect to our network @
s a successful real estate inves-
tor and top-selling author, I’m
on the road a lot presenting
workshops across the county.
I often start with a bit of personal history
because when you’re a multimillionaire
like I am, people assume you were either
born rich or had a wealthy mentor show
you the inside track to making money.
That’s not my story. Not by a long shot.
Fifteen years ago, I was running my own
small landscaping business in New Eng-
land. I was a guy with a pickup truck and
lawn mower. If you haven’t experienced a
New England winter, let me simply say it
means I was literally frozen out of work for
a good part of the year.
I spent winters doing odd jobs to scrape
by. A friend asked if I wanted to repair a
property that needed some TLC so it could
be resold fast.
The owner was looking for a quick fx
and fip, and thus I was indoctrinated in the
business of fipping properties before it be-
came a national pastime and the subject of
cable TV shows. But what attracted me to
real estate was not the quick turn. It was the
steady cash fow.
The idea of checks from renters flling
my mailbox month after month, regardless
of the weather, really appealed to me.
I wanted other people to pay my mort-
gages, creating huge equity in my build-
ings. I wanted to sit back and watch my
buildings appreciate, making me wealthier
and wealthier.
I wanted to live off the positive cash fow
that I received each month, so I wouldn’t
have to go to a job every day. No more dai-
ly grind. No more living paycheck to pay-
check. Best of all, I liked that “millionaire”
was the likely outcome if I did it right.
Back then there was nobody teaching
how to buy rental properties. The gurus fo-
cused on single family houses, just as they
do today. So I had a big learning curve.
by Dave Lindahl
Continued on pg. 60
Real Estate
published for Investors by Investors
Realty411Guide.com PAGE 7 • 2010 reWEALTHmag.com
Who Else Wants Up to
$5,000…$10,000 or More
Extra Monthly Cash Flow?
there. When we rehab a property we pretty
much do everything so we know it’s going
to be a maintenance-free property. When
we fnish, it’s almost like a new house.”
The company’s record is impressive. “In
the year 2009, we collected 97.4 percent of
our scheduled rent,” Julian proudly states.
“It even amazes me!”
In Dayton, market rents range from $595
to $950. The company rents with a one
year lease agreement. A typical scenario
is this: A tenant occupies a three bedroom,
one bath home, 1,100 square feet, with a
one car garage, for $700 a month. Many
homes are brick with full basements, some
are ranch houses built in the late ’50s.
Dayton is home to the largest single
site employer in the state of Ohio: Wright
Patterson Air Force Base with 26,000 em-
ployees. The city also has two universities:
Wright State University with an enroll-
ment of about 18,000, including a medical
school. Next is the University of Dayton,
which enrolls over 10,000 students and
also offers a law school program.
As far as the fnancials, a Triple Net in-
vestor can realize up to 17% return on each
“If the investor pays cash then they
will receive 9.1%.” Julian explains fur-
ther: “For example, if they have a $60,000
house the investor will be receiving $5,460
a year, which is 9.1% of the purchase price.
Do you have reservations about becoming a landlord?
Triple Net Houses created a program to help investors profit
from rental properties without ever having to deal with tenants!
invest drama
If an investor buys a Triple Net House, they know exactly what their
cash flow is going to be for the next 10 years. They never have to deal
with tenants and never have to deal with or pay for maintenance.
n 1903 The Wright
Brothers made history
in Dayton, Ohio, with
their frst power airplane
One hundred four
years later, Peter Julian, CEO of
Triple Net Houses, refects on
their short three-year revolution-
ary history that began in 2007 as
a premiere provider of real estate manage-
ment. “We’ve reinvented the way people
invest in residential rental real estate,” Ju-
lian says proudly. He then adds: “It’s kinda
overcast. We’re going to get some rain later
on, which doesn’t mean a thing for our in-
vestors who are from all over the country.
The weather rarely has anything to do with
our business, unlike the Wright Brothers.”
Julian shifts to business quickly explain-
ing how he created a NNN (triple net) in-
vesting model, which is traditionally only
found in commercial real estate transac-
“I’ve been a real estate broker for a little
over 30 years. I’ve worked with investors
my entire career. When I talk to them, most
like all the good things about real estate,
like the cash fow, the tax write-offs, build-
ing-up equity, and potential appreciation.
But when potential investors get to talking
about managing, they’ve all heard the hor-
ror stories about tenants, maintenance and
all those kinds of things.”
So Julian and his team came up with
a unique solution. It’s basic and simple,
even though it tackles a complicated con-
cept. The Triple Net Houses program
com) takes all the un-
knowns off the table.
By purchasing a Triple
Net rental, investors will
know exactly what their
cash fow is going to be
for the next ten years.
Julian explains: “When
we lease the house it’s a
triple net lease, which means we pay taxes,
insurance and maintenance. Basically we
pay all the operating expenses, so there’s
nothing our clients have to pay. We man-
age the property so there’s no management.
Investors will never have to deal with a ten-
ant and never have to deal with or pay for
maintenance,” Julian explains.
The company offers a 10-year NNN
(triple net) lease. If investors want to ter-
minate early, all they have to do is provide
a 60-day written notice. There is no penalty
and the investor still owns the property.
“It’s a turn-key investment. It pays a
high yield and we’re able to buy houses at
low cost and rehab them economically. We
then pass that deal on to an investor, as a
totally turn-key investment. Their total in-
volvement after the investment is to collect
a payment from us each month, which is
electronically deposited into their checking
account. It’s a perfect storm.”
When asked how Triple Net Houses can
provide guaranteed returns for investors,
regardless of what is going on with their
property, Julian replies: “We’re very care-
ful in selecting properties in neighborhoods
where we know the rents are going to be
by Carla Fischer
Continued on pg. 47
Peter Julian
Realty411Guide.com PAGE 9 • 2010 reWEALTHmag.com
Specializing in
the Memphis
California Life
Tennessee Rentals
ast year, while working as a pan-
elist at a local real estate invest-
ment club in Los Angeles, I had
the pleasure of meeting Mathew
Owens, a certifed public accountant and
owner of OCG Properties. I was so im-
pressed by his experience and work ethic
that I invited him to partner with me on
syndicating real estate projects.
Having worked closely with him for al-
most six months now, I can say that he’s the
real deal and you’ll be in for a treat if you
get the chance to work with him. Mathew
has many strengths that make him a great
partner: integrity, organizational skills,
and real estate and investment profciency.
Plus, he’s very likable.
I have met a lot of people in this business,
and I expect great things from him in the
coming years.
I recently sat down with him to ask about
his real estate investing strategies and the
current projects he’s working on out in Ten-
nessee. Mathew has purchased, renovated,
and sold or held more than 100 investment
properties in the last three years alone.
Below is a partial transcript of the inter-
view I had with him.
Ginger: Mathew, in your own words,
what exactly does OCG Properties do?
Mathew: In a nutshell, we help people in-
vest in real estate. At OCG, we sit down and
go over our client’s fnancial situation and
resources to help them fnd the best ways
to invest and meet their individual goals.
With good in-house management in place,
you can hold for long-term growth and re-
ally get a great return on your money. On
top of that, the price points are low enough
that you can buy with cash and not even
have to deal with fnancing. Talk about low
We help our clients achieve great returns
on their money while doing all of the due
diligence on every investment. We bring a
ton of real estate experience to the table and
help our investors every step of the way.
Ginger: What did you do before you
became a full-time real estate investor?
What is your background?
Mathew: Let’s see, I grew up in the tiny
town of Los Angeles and graduated from
the University of California, Santa Bar-
bara, with a degree in economics and an
emphasis in accounting. Afterwards, I was
able to achieve one of the accomplishments
I am most proud of, passing all four parts
of the CPA exam in one sitting, a feat only
10% of candidates have been able to do.
After passing the exam, I worked as a
CPA, auditor and business adviser, help-
ing my corporate and individual clients
increase their bottom line, helping them
fnd fraud risk factors inside their business
systems and auditing their accounting re-
I guess that is why I am so good at do-
ing due diligence on real estate transactions
now. The accounting and due diligence
skills are a perfect match for a real estate
investor, I just had to adjust my personality
to be more outgoing and personable, which
most CPAs are not known to be. Being in
the real estate industry as a full-time inves-
tor, I am fnding it is rare to fnd a CPA who
understands the tax and legal implications
of investing and the real estate investment
side in detail.
Ginger: So tell us, how did you get your
start in real estate?
Mathew: I started investing about fve
years before I decided to take some real
estate education courses and quit my cor-
porate job cold turkey. I found that the skill
sets I gained from working at CPA frms
were hugely valuable, and I still hold the
partners of those frms with the upmost
respect for what they taught me, the eth-
ics they instilled in me and the guidance
they gave me. However, the skills that I
have developed running my own company
are unparalleled to anything I would have
ever expected. While working for myself,
I started fipping and holding properties >
by Ginger Macias | photography by Sam Green
Realty411Guide.com PAGE 11 • 2010 reWEALTHmag.com
to go out and develop a team in every mar-
ket, which is exactly what we did out in
Memphis. We have in-house management
and a team on the ground there that helps
us get all of the
information we
need to be suc-
Ginger: What
team members
should one have
when investing
out of state?
Mathew: There
are a number of
team members
you need in order
to be a success-
ful real estate
investor. At the
top of the list
for any buy-and-
hold investor is a
great, and I mean
GREAT, pr op-
er t y manager.
Pr oper t y man-
agement is the number one reason an in-
vestment property will fail to produce posi-
tive cash fow, assuming you did your
numbers correctly and did not buy in a
ghetto. In addition, an investor needs lend-
, inspectors, appraisers,
attorneys, CPAs, IT consultants, marketing
agents and the whole nine yards to really
develop a good system. Each team member
is crucial to your success, and that is why
investing in real estate can be so diffcult
at times.
Your team can make or break you, and
you need to have reliable team members
that communicate well with you to be suc-
Ginger: What separates your company,
OCG Properties, from the rest?
Mathew: At OCG we have in-house prop-
erty management, which is the key to our
and your investment success. We also take
an ethical and conservative approach to in-
vesting and do all of the right due diligence
on every investment.
We really care for our clients and care
about their goals and what their interests
are. We have a guaranteed tenant and reno-
vation on every property, and put the proper
that the current reported unemployment
rate is 12.8%, there is a $19.9 billion dollar
gap in the California budget, the California
mortgage delinquency is up almost 100%
year on year, 90% of
the Alt-A and Option
ARM loans coming
due are underwater in
California, 1/3 of Op-
tion ARM loans are
delinquent already, the
California tax rate rose
from 9.3% in 2008 to
9.55% in 2009, and it
will rise again to cover
the gap in the budget.
On top of all that,
people who are under-
water in their homes
and not in fnancial
hardship are starting
to walk away because
it does not make fnan-
cial sense to hold them
and hope they go up
Ginger: I’m an out-
of-state investor too but other investors
may be skeptical about owning property
so far away.
Mathew: They are really missing out!
Ginger, we both know that with technolog-
ical advances you can invest anywhere in
the world now, and it’s as if you’re invest-
ing in your own backyard.
The reality is, everyone has the resources
in Memphis. I got through my initial learn-
ing curve and kept striving for more deals
with a magnifcent obsession for real estate
that only few can really understand. It was
tough, but after getting through the strug-
gles, you fnd yourself breaking through
and fnally achieving success. Working that
much taught me multiple things. But one
thing stuck more than anything else: Pas-
sive income is the goal!
Ginger: You live in Southern California
and invest in Memphis, Tennessee. Why
do you invest so far away from where
you live?
Mathew: That is right, I live in sunny
Redondo Beach and invest in Memphis.
Most of the investors I meet ask me this
exact question, and the simple answer is:
I invest with logic and statistics, not based
on what my emotions are telling me.
Look at the economics in the Memphis
market. It has one of the highest price-to-
rent ratios in the nation! It did not take a
huge dip like a lot of markets, it had an av-
erage annual appreciation of 4% per year
over the past 20 years. It’s a very stable
market. The population is also expected to
increase and you can pick up property that
not only cash fows but gives you apprecia-
tion potential in the next 10 years, which is
not something I can say about California.
California is a huge risk right now for buy-
and-hold investments.
If you take a look at some of the econom-
ic indicators in the California real estate
market, some of the things you will fnd are
Mathew Owens, his brother and little sister.
A sample OCG Property.
Realty411Guide.com PAGE 12 • 2010 reWEALTHmag.com
structuring and risk miti-
gation procedures in place
on every investment. We
also set up proper com-
munication procedures
for our management com-
pany to keep our investors
frequently updated on the
progress of their invest-
Ginger: What due dili-
gence is done on your
Mathew: Wow, where
do I begin? I will give
you the quick version. To
start off, we do a complete
neighborhood analysis on every property
along with a market value analysis, which
includes pulling comparable sales and get-
ting an appraisal done before we close es-
crow. We also do a rental analysis, cash
fow analysis, proft analysis, renovation
analysis and every kind of analysis a CPA
can think of to protect ourselves and our
In addition, we get an inspection by a
qualifed inspector and compare it to the
renovation bid. Each renovation bid comes
with an item-by-item, room-by-room
breakdown of the renovation costs, includ-
ing materials and labor. This is extremely
important so you know what your costs are
going to be on future renovations. When
leasing a property, it is important to get a
qualifed tenant. If you do not, you will be
sorry later when you have to evict them
because they cannot afford the rent. We
qualify them similar to a home loan pro-
cess. We look at their debt-to-income ratio
and credit. We do a background check and
really get a good assessment of their per-
sonality, which can tell you a lot.
Ginger: What tips can you give to people
who want to get started investing in real
Mathew: Do not give up, no matter what.
Any business, any new venture or opportu-
nity that you want to achieve, is 90% men-
tal and 10% skill. If you never give up, you
can never lose. It’s best said in the book
“Think and Grow Rich” by Napoleon Hill:
“Before success comes in anyone’s life,
one is sure to meet with much temporary
defeat, and, perhaps, some failure. When
defeat overtakes someone, the easiest and
most logical thing to do is to QUIT. That is
exactly what the majority of men do.”
If you never quit, you will succeed no
matter what adversity you face.
Ginger: What is the frst step someone
needs to take to invest with you?
Mathew: They need to call us and sched-
ule a consultation. We look at each inves-
tor’s resources, fnancial situation and in-
vestment goals to make sure we help them
invest the right way and surpass their indi-
vidual investment goals. Once an investor
schedules a consultation with us, we move
them from sitting on the sidelines to devel-
oping a passive income stream to retire on
— as fast and safely as possible.
Ginger: Do you have anything else you
would like to share with our readers?
Mathew: Yes, thank you. I would just like
to add that some people will make up ev-
ery excuse in the book for why they do not
or cannot do something. I am here to tell
you that you can do ANYTHING if you
focus and take ACTION steps towards its
Do not let your emotions tell you it can-
not be done, even if you were not initially
successful. Even if it is diffcult to see how
you are going to accomplish it, don’t give
up. There is always a way, but it comes
down to taking action. Most people give
up at the mere thought of diffculty, and
your success in real estate, and in life, are
going to be based on your ability to focus
and take action.
Also, a successful investor has to be
completely dedicated. They must ignore all
of the people who have an opinion but are
less- educated about the subject.
Ginger: Thanks, Mathew. I wish you
continued success in your investments.
Mathew: You’re welcome, Ginger.
For more information, please visit:
www.ocgproperties.com or email:
invest@owenscg.com | OCG Properties
can also be reached at: (424) 757-4680
“With technological advances you can
invest anywhere in the world now, and it’s as
if you’re investing in your own backyard.”
Photograph of Mathew Owens by Sam Green
Realty411Guide.com PAGE 13 • 2010 reWEALTHmag.com
Real Estate
Serving the Needs of Accredited Investors - INSIDE: Information to Grow and Maintain Your Wealth
A Special Edition from
the Publishers of Realty411
Vol. 1 • No. 1 • 2010
Words of Wisdom from
Masters of Real Estate 16 19
Maverick Investor Group
Reveals the Next BIG Thing 35
Bruce Norris Prepares for Annual
“I Survived Real Estate” Charity
he ten years ahead of us will be
extremely diffcult for investors.
Yield and growth will be scarce,
but much worse will be the four
vampires waiting to suck the life out of
almost every investment you consider. In
this article, we will meet each vampire in-
dividually, understand how they drain your
investments dry and learn about some “in-
vesting garlic” that can keep them away.
Inflation: the First Investment Vampire.
If you remember President Gerald Ford
then you may remember his “Whip Infa-
tion Now” campaign, created to fght infa-
tion climbing over 10%. Eventually
infation reached over 14%
annually in 1980, usher-
ing in years of stagfa-
tion—high infation
combined with high
unemployment. In
only fve years the
value of invest-
ments dropped by
50% and the dollar
lost almost 75% of
its purchasing power
during that decade.
This year, with unem-
ployment and underem-
ployment already approaching
25%, the nation is poised to see a replay of
those diffcult years.
To estimate the curve of infation in this
new decade, we need a basic understand-
ing of the causes of infation. Noble Prize
winning economist Milton Friedman said it
best, “Infation is always and everywhere
a monetary phenomenon.” In other words,
when the Federal Reserve prints more
money than the economy can absorb, the
economy catches a bad case of infation in
the next 12-24 months.
The money supply exploded in 2009. It
doubled in the space of a few months and
then grew another 50% in the next year.
Since the economy has not grown by
150% in the past two years, all this money
is waiting in bank vaults to drive signif-
cant infation soon. Experts argue that de-
fation is the bigger risk. While that may
be true, it does not make infation any less
destructive when it starts nibbling at your
Garlic to Protect Your investments from
the Inflation Vampire
To protect against the corrosive power of
infation, you need investing vehicles with
three specifc features:
•Asset value that tracks infation.
•Asset income that tracks infation.
•Asset that has considerable leverage.
It’s no surprise that investment real es-
tate has all three of these critical features.
In general real estate values track
infation. That is, their value
remains constant or appre-
ciates even as the value
of each dollar declines.
Likewise, the income—
rent—from investment
property tends to track
infation. And fnally,
you can leverage your
investment asset.
But Not Just Any Real
In truth, most real estate does
not deliver these three critical fea-
tures. The past few years, have seen crush-
ing drops in the price of condos in Miami,
almost any property in Detroit, suburban
tract homes in Phoenix, plus offce tow-
ers and shopping malls across the country.
Buying investment property takes effort,
considerable research and a team of ex-
perts working to assist you. With the right
guidance and team in place, an investor
will never have to worry about those evil
investment vampires.
Richard Barrett is CEO of RBS Homes
(www.RBSHomes.com). With offices
based in California and Texas, RBS Homes
provide investment properties with these
three critical factors in place.
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Tips for Long-Distance
Turn-Key Rentals
Around the Nation
Cash Flow from the
Comfort of Home
Mathew Owens, CPA, owner of
Buys & Rehabs
Rentals in Tennessee
from Redondo Beach
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Investment Vampires
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JERRY ELKIND, Investment Consultant
(310) 391-1153
Dolf de Roos Carter Froelich
Carter: Hello, Dolf. Tell us about what
you’ve been doing lately and give inves-
tors your perspective on the market.
Dolf: Well, Carter, although the media re-
peatedly states this is the worst real estate
market we have seen in decades, it is only
the worst market if you are in the unfortu-
nate position of being forced to sell. If you
are in the fortunate position of being able
to buy, then by defnition, this is the best
market we have seen in decades.
With that said, there are still many who
have trepidation about entering our current
real estate market. This has forced me to go
overseas. There are many countries right
now experiencing the peak we saw a few
years ago so they see the relative merits of
bringing their money to the United States
and investing here.
Carter: Why did you become interested
in The Property Ledger?
Dolf: I like being on the cutting edge of
what is available. I have always done well
with new technology. When fax machines
came out, it saved us thousands of dollars a
year in courier fees.
Now, we don’t fax; scanned attachments
are better quality, in full color and don’t
require an outdated phone system to get
through to a recipient.
When I come across people in the real es-
tate industry who do not use email, and in-
sist on using faxes exclusively, I think they
must miss out on deals because of their
aversion to new technology. I do not want
to fall into that trap. The Property Ledger
is cutting edge, extraordinarily useful and
easy to use. Why would you not use it?
Carter: What benefts are provided by
The Property Ledger, which other prod-
ucts do not provide?
Dolf: With the information stored in the
cloud, you can access your portfolio’s de-
tails from any computer connected to the
Web. Before long, most services will have
that feature, but by then The Property Led-
ger will have innovated yet another area.
Surfng is so much easier one foot ahead of
the wave than one foot behind.
Furthermore, having all the details of
a property, including title documents,
HUD1s, leases, management agreements,
and the like, stored in one central reposi-
tory is simply a great way to run your prop-
erty investment business. Once you have
experienced it, it is diffcult to revert back.
It would be like going back to using slide-
rules, or for those readers not old enough to
remember what they are, the curly-paged
and faded fax machine — if they even re-
member that!
Carter: Since you travel often, are the
features of Electronic Library useful?
Dolf: Absolutely. In fact, more and more
companies are trending towards cloud
computing. Clearly, it is convenient to
be able to access all the relevant data on
a property from anywhere and not have
to be concerned with taking up space on
your own computer, keeping data in sync,
having the data concerned fall into strange
hands in the event of a computer loss, in-
Dolf &Carter
Tips from AZ
give readers the latest
“... with the information stored in the cloud,
you can access your portfolio’s details from
any computer connected to the Web.”
he world of real estate investing is a small one.
Investors rub elbows at similar events, read in-
dustry publications and generally run in the same
circles. Carter Froelich, an author, investor and
CEO of The Property Ledger, recalls the time he met best-
selling author and renowned educator Dolf de Roos, Ph.D.
The two savvy Phoenix-based investors became friends
after an introduction by Andrew Waite, publisher of the Ari-
zona-based, Personal Real Estate Investor magazine.
At the time, Froelich was busy developing The Property
Ledger, his online software designed to analyze property
holdings, store documents and forecast future returns. Once
ready to launch, he asked de Roos to test out his creation.
That was three years ago, and de Roos still uses the software
to track his portfolio.
Recently, Froelich welcomed de Roos home from his ex-
tended visit to Australia. The famed author of eight books,
including the New York Times Best Seller “Real Estate
Riches,” was visiting Down Under to raise private money
for property investments in Arizona. It proved to be a won-
derful opportunity for one master investor to interview
another. Froelich enthusiastically took on our assignment
and provided an outstanding interview.
This indeed is a rare treat; prepare to learn from two of
Arizona’s top real estate investing giants. —The Editor
Interview by Carter Froelich, CEO of The Property Ledger
Realty411Guide.com PAGE 16 • 2010 reWEALTHmag.com
stalling upgrades, etc. It is all done for the
end user.
Carter: Why is it important for investors
to monitor the fnancial performance of
their real estate portfolio?
Dolf: Interestingly, it is important for inves-
tors in stocks and commodities to maintain
a vigilant eye on their volatile investments
so that they can jump ship if the ship starts
to sink. With real estate being a much more
stable investment, much of the interest in
monitoring your portfolio is just that: inter-
est. However, if you want to know when
you can invest in yet another property,
based on cash-reserve build-up, equity po-
sition, available collateral, etc.), then you
want to have the up-to-date information
available instantly. The Property Ledger
provides just that when you need it.
Carter: How often should an investor
track the fnancial performance of their
real estate portfolio?
Dolf: As often as they feel comfortable.
One of the advantages of real estate invest-
ing that I often tout is that unlike the stock
market, where you have to monitor your
investments regularly, with real estate, you
can buy a property and put the title in a bot-
tom drawer, take a six-month cruise, and
not worry if you should sell the property
again. However, it is comforting to be able
to put your fnger on the pulse of how your
investments are performing.
Carter: What is your favorite fnancial
calculation when analyzing your proper-
ties? And why? Here are the choices:
•Gross Rent Multiplier
•Cash-on-Cash Return on Investment
•After Tax Cash-on-Cash Return
•Internal Rate of Return
•Return on Equity
Dolf: I like to analyze based on cash-on-
cash return. This calculation shows you
how the cash you are putting up is perform-
ing. It is the prime indicator of how you
can truly leverage your money. What other
investment allows you to get a $100,000
asset for only $10,000 or $20,000 in cash?
For most investors, you can’t buy
$100,000 worth of stock or gold or oil
without coming up with the entire pur-
chase price in full. When you put up all the
money to buy an investment, the return is
simply the income divided by the invest-
ment. With real estate, since you only need
to come up with a small portion of the pur-
chase price in cash, the cash-on-cash return
becomes very important and, dare I say
it, interesting. It is an advantage inherent
in real estate investing that is often over-
looked by fnancial advisors.
Carter: What type of investment do
you favor right now and why?
Dolf: When it comes to residential property,
I prefer the single-family home. However,
for the last two decades, I have personally
focused on commercial real estate. That
doesn’t mean I haven’t invested in other
sectors but the benefts of commercial real
estate for the property owner are incred-
ible. Here are just a few of the benefts:
1. The leases tend to be much longer —
anything from three to twenty years. They
are generally secured by the business, with
the owners offering a personal guarantee.
2. Commercial tenants tend to maintain the
property better as the look and condition of
the property is important to their business.
Continued on next page
Maverick Investor Group
Scours the Globe for the
Best Investment Properties
Dolf & Carter, pg. 17
Tenants often improve and up-
grade the space with their own
3. With residential property, the
landlord tends to pay the outgo-
ings such as property taxes, in-
surance and maintenance. With
commercial real estate, the ten-
ants who are leasing the prop-
erty, pay for those expenses.
Carter: We’re both located in
Arizona; let’s discuss the local
market. Where is it heading?
Dolf: I’m optimistic. There was
an article in the paper just three
days ago stating Taylor Morri-
son Homes will begin construc-
tion in July of a master-planned
community in Gilbert. There
will be 17 phases developed
over the next 12 years accord-
ing to the report submitted to
the Gilbert Planning Commis-
sion. This is indicative of the
long term. In the short term,
things look pretty grim, again,
if you are forced to sell. There
is word on the street that there
will not be a u-turn for years.
Things go in cycles. When
you get old enough to have
experienced a few cycles, you
learn to embrace them rather
than fear them. There will be a
turnaround. If you can buy real
estate that cash fows now and
have a great chance that long
term the capital value will go
up immensely, why would you
not acquire some real estate?
Learn more online about
The Property Ledger, visit:
To reach Dr. Dolf de Roos, visit:
Los Angeles county
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Avg. Rental per unit $2300
Net cash fow $1,397
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Avg. Rental $ 1000
Net cash fow $1500
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Purchase Price $350,000
Avg. Rental per unit $1800
Net cash fow $1,126
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Purchase Price $400,000
Avg. Rental per unit $1,300
Net cash fow $2,081
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Maverick Investor Group
Scours the Globe for the
Best Investment Properties
Next Destination: The Hidden Tropical Paradise of...Nicaragua
Interview by Linda Pliagas
ith a name like Maverick, one
immediately expects the unex-
pected. Real estate with a hip
and a bit of a rebellious twist.
Maverick Investor Group delivers all that
and more. It is a real estate brokerage that
caters to a community of sophisticated real
estate investors and agents, all of whom are
committed to using real estate as a vehicle
for designing their lifestyles. The broker-
age is licensed with its primary offce in
Las Vegas, but the Maverick principals all
live in different states, work from laptops
on rooftop pool decks, and travel the globe
in search of premium buying opportunities
for their exclusive clientele.
Maverick negotiates directly with devel-
opers and owners for prices and terms that
are not available to the public. The buying
power of the Maverick community enables
developers to move more properties in less
time and save money on advertising, mar-
keting and other normal overhead. This al-
lows them to offer special prices and terms
to buyers in the Maverick community that
they could not offer to the general public.
Indeed, the traditional brick-and-mor-
tar neighborhood brokerage dedicated to
farming a fve-mile radius, driving buyers
around and sitting at open houses seems
like an archaic business model next to
Even more avant-garde than their busi-
ness model is their corporate vision: “To
radically improve people’s lives through
real estate.”
And their radical approach to real estate
is working. Even during 2009, in a single
90-day period, the company was able to
close as many as 34 transactions and pay
out nearly a quarter of a million dollars in
buyer referral fees to real estate brokers in
the Maverick Referral Network.
Maverick’s business model, including
the international component, is just a con-
tinuation of the global lifestyle enjoyed by
its principals. The company was founded
by Mark Solak, Valerie Schrock and Mat-
thew Bowles — real estate investors >
Mark Solak Valerie Schrock Matt Bowles
Realty411Guide.com PAGE 19 • 2010 reWEALTHmag.com
and licensed real estate professionals with
formal, advanced degrees. Prior to joining
forces, they led cosmopolitan lives, trav-
eled the world and lived in foreign coun-
tries for extended periods of time.
Recently, I caught up with the Maverick
power trio to discuss their latest turn-key
buying opportunity—the Seaside Mariana
Spa & Golf Resort on the Pacifc coast of
Q: How did the three of you become busi-
ness partners? Tell us a bit about how
Maverick Investor Group formed?
MB: Well, Valerie and I met in graduate
school in 1999. We both got master’s de-
grees in International Peace and Confict
Resolution and then worked in human
rights advocacy in Washington, D.C., for
several years. We started investing in real
estate on the side, reading books about it
and learning by experience. Soon we had
millions of dollars in real estate holdings in
states all over the country.
I met Mark in 2005 when he sold me over
$2 million worth of investment properties
in Las Vegas. I was blown away by his
customer service; it was the best I had ever
seen in any industry. These were two of the
most talented, ambitious, honest and trust-
worthy people I had ever met, all essential
qualities for business partners. The three of
us began pooling our skills, resources and
creative energies to develop a cutting edge
business model that could provide unparal-
leled advantages to real estate investors and
real estate agents. In 2007, it was ready to
be launched so we all quit our jobs, few to
Las Vegas and, while overlooking the Strip
from a rooftop lounge, raised our glasses
and announced to the world that Maverick
Investor Group was born!
Q: The Maverick partners live in differ-
ent states — Matt is in Los Angeles, Valer-
ie is in Washington D.C., and Mark lives
between Chicago and Las Vegas. That is
pretty incredible! How did you decide to
structure your company like that and how
does it affect your business?
VS: We were intentional about structuring
the company that way from day one, and
the primary reason is “freedom of mobili-
ty” for the Maverick partners. It’s all about
lifestyle. We can live wherever we want
and travel whenever we want for as long
as we want, and no business falls through
the cracks because of the systems and pro-
cesses we have set up and the technology
we use. It was crucial for everyone to start
with the vision of their own ideal lifestyle.
Matt likes to work from his rooftop pool
deck in LA, Mark likes to spend extended
time in Europe each year, and I like to go
skiing in Canada and spend part of the year
in Phoenix with my parents. So we struc-
tured our real estate business to facilitate
our dream lifestyles. But, more than that,
Maverick has built an entire community
of real estate investors and agents who are
focused on using real estate as a vehicle
for designing their dream lifestyles. We
show our clients how to do what we do.
You will notice that we have a section on
our website that discusses “real estate life-
style design” in great detail, down to the
specifc technology products we use. Real
estate investing is only a means to an end…
it’s always important to keep your eyes on
the larger prize. Money isn’t very useful
if you have lost touch with your dreams.
How can real estate enable you to recapture
your time, design your dream lifestyle and
make enough money to fnance it? That’s
the big picture.
Q: Maverick has always encouraged
out-of-state investing, why are you now
Seaside Mariana Spa & Golf Resort features the frst Jack Nicklaus Signature Golf Course in Nicaragua.
Realty411Guide.com PAGE 20 • 2010 reWEALTHmag.com
up the coast is Nicaragua. It borders Costa
Rica and has the same weather, the same
beaches, the same sunsets, but a much
lower cost of living and, at the moment,
much lower property prices. Seaside Mari-
ana will be Nicaragua’s frst luxury resort
with a fve-star international brand hotel
and a Jack Nicklaus signature golf course.
We are talking about a 923-acre resort on
2 kilometers of pristine beach front. Noth-
ing like it currently exists in Nicaragua.
This project will single-handedly take the
country to the next level as a tourist desti-
nation. When the number one golf course
designer in the world chooses to go into a
market for the frst time, real estate inves-
tors should perk up their ears. It is exactly
these types of seismic events that I look for
when I choose where and when to invest
my own money.
Q: What is the political
and economic climate in
Nicaragua right now?
MS: Nicaragua has had
a democratic government
for the past 20 years and
has had fve transfers of
power during that time.
Recently, the government
has been passing laws to
encourage foreign invest-
moving to international real
MS: For the same reasons,
we’re just expanding the play-
ground. The reason why I
would never limit myself to
buying in my own city or state
is because there might be a bet-
ter market than the one I live
in. The failure to consider in-
ternational real estate markets
produces the same restriction.
I want my money in the best
market in the world no matter
where I live, period. Maverick
is opening up a private chan-
nel for real estate investors to
access unlisted properties in
premium global markets, with
property management options
in place and a variety of exit
strategies. Buying through
Maverick has always meant
getting exclusive prices and
terms that are not available to
the public. That has simply expanded to
the international arena.
Q: Why did Maverick choose Nicaragua?
And why the Seaside Mariana Spa & Golf
Resort project in particular?
MB: Over the last two years, the Maverick
partners have traveled throughout Europe,
the Middle East, the Caribbean and Central
America to review real estate projects. In
our opinion, Nicaragua is one of the pre-
miere emerging markets on the world stage
today. When you look at a map of Central
America starting from the south, you be-
gin with Panama, then Costa Rica — both
of which have already exploded as tour-
ist destinations over the last 15 years and
have seen corresponding appreciation in
property values — and the next country
ment in Nicaragua, making
it particularly friendly to for-
eign real estate investors.
For example, as an inter-
national investor who lives
in the US, I can own freehold
property in Nicaragua with
title insurance from a North-
American-based title com-
pany, and when I sell it for
a proft I will owe no capital
gains tax in Nicaragua. Pres-
ident Ortega has personally
endorsed the Seaside Mari-
ana resort because it is an-
ticipated that it will result in
an explosion of tourism and
be a huge economic boon for
the country. So the govern-
ment is very supportive of
foreign investors coming in
to buy real estate.
Q: What kind of deal terms
was Maverick able to nego-
tiate at Seaside Mariana and how can our
readers get in on the action?
VS: As you know, our prices and terms
are not available to the public, so I cannot
unveil any details here. I will tell you that
this is one of the most extraordinary deals
I have ever seen and that we have a global
exclusive on the entire resort—the only
way to buy a property at Seaside Mariana
is through Maverick.
For detailed information and private ac-
cess to our special prices and terms, your
readers will need to become part of the
Maverick community. Real Estate Inves-
tors can apply to join our community of
VIP Buyers and get access to unlisted deals
like Seaside Mariana. Real Estate Agents
can apply to join the Maverick Referral
Network and make 3% every time their cli-
ents close on a Maverick Deal.
We invite smart real estate investors and
savvy real estate agents to contact us today.
We don’t care if someone has a lot of ex-
perience, we care if they are serious about
using real estate to build their wealth and
design their lifestyle.
For information, contact Maverick Investor
Group: www.maverickinvestorgroup.com or
email: info@maverickinvestorgroup.com.
Seaside Mariana Spa & Golf Resort sits on 2 kilometers of pristine beach front.
Realty411Guide.com PAGE 21 • 2010 reWEALTHmag.com
a lot of investors get
in trouble. The lower
priced homes usually
have households with
limited to no savings
or emergency fund. So
when a tenant loses a
job, the property owner
feels that impact pretty
quickly. Also lower-
priced homes tend to
be in older areas giv-
ing the owner a much
higher rate of maintenance.
The Numbers
This is where investors usually make mis-
takes. The surface numbers can be very
deceiving in real estate. When analyzing
a real estate transaction
many investors aren’t
using vacancy and main-
tenance, or applying the
same vacancy and mainte-
nance numbers to homes
that vary widely in price,
age, neighborhood, size
and city. This can cause a
pretty big disappointment
when the cheap property you purchase is
affected by socio-economic issues leading
to high tenant turnover, criminal element,
slow-paying tenants and maintenance is-
I’ve seen many people advertise profor-
mas with high cash fow on smaller, older
homes in areas with high crime, poverty,
poor schools, and with low rates of home
ownership. One can argue that these can be
good investments structured correctly and
by applying the right metrics to ensure a
more accurate projection of cash fows is
achieved. These lower-end properties have
become the penny stocks of the real estate
investment business. If you get the perfect
tenant who doesn’t feel the pains of the
recession, maintains the home themselves
and stays in the property for a long time,
you could hit pay dirt. Similarly if you’re
well-versed in Section 8 you can proft
greatly in the lower-end homes.
The median-priced home becomes the
blue-chip property. The blue-chip home
has lower levels of vacancy and rents that
have been buoyed by average people be-
ing displaced from their primary residence
via foreclosure. In the market where my
company is located, average-priced homes
are selling for around $115,000. Obviously
with distressed inventory out there, one can
purchase properties at lower prices than
this, improve them and probably have eq-
uity that is more tangible than lower-priced
homes. How can one possibly model a
$115,000 home the same way as a $30,000
home? The $30,000 home (in most cases)
will have signifcantly higher rates of va-
cancy and maintenance.
If you go up a step to
the higher-than-average
priced homes, you’ll no-
tice those homes might
offer stable tenants, usu-
ally high-end profession-
als who will reliably pay
the rents. The cash fows
may look lower on the
surface than other types of
homes but these blue-chip homes perform
more reliably on maintenance, vacancy,
and valuations.
Financing on blue-chip homes tends to be
much easier than most any other price point
for a number of reasons. First because the
prices are low enough you don’t worry
about jumbo loan pricing, rates, and re-
strictions. On the lower end not all lenders
are lending on homes priced under $50,000
and at times have a different rate table. In
and around the median price nearly every
lender offers investor loan products. I’ve
also found the appraisal issues are fewer
because normal sales activity exists at this
Blue-Chip Real Estate Strategy
Fits Economic Climate
he housing recovery is
limping along slowly
leaving many real es-
tate investors wonder-
ing where to invest their dollars.
Some speculation is even re-
turning to the market with new
investors looking to purchase,
renovate, and resale distressed
properties for short term profts.
Owning a real estate investment
brokerage allows me to see a va-
riety of transactions, including retail fips
from speculators, investors buying $8,000
homes, renovating and placing tenants in
them, and a higher quality purchase and
hold homes closer to median home prices.
The latter is a strategy that I believe right
now is being overlooked by many inves-

The Product
There are many markets where you can
purchase and hold homes at the median
or even average home price and receive a
positive cash fow with a traditional 20%
down strategy. These homes, are out-per-
forming many lower-priced homes from
rental prices and home values perspective.
Median-priced homes in most markets are
three bedrooms, two bathroom homes,
which offer good car storage. Usually this
is the type of home most Americans desire
to live in ensuring you always have both an
available rental pool and an available buyer
pool. This product offers real estate inves-
tors multiple exit strategies with the ability
to sell it retail versus lower-end properties,
which usually need to be sold to other in-
In addition, median-priced homes are
usually in areas low in crime, close to
schools, shopping, houses of worship, and
with easy access to employment. The in-
verse of this is, of course, also true. I per-
sonally own properties at much lower price
points as well. They took the hardest hit
on rents and value. This is where I’ve seen
by Ryan Hinricher, co-founder of InvestorNation.com
This article originally appeared on BiggerPockets.com
Ryan Hinricher
Realty411Guide.com PAGE 22 • 2010 reWEALTHmag.com
Continued on page 24
Blue-Chip Real Estate Strategy
Fits Economic Climate
price point. When you have a
lot of normal sales, valuation
tends to be (somewhat) stabi-

Exit Strategy
Having an exit strategy is an es-
sential part of your real estate
plan. Some investors plan on
never selling and while that
can make sense to receive all
the benefts of real estate, lives
change. If you think back fve
years ago and how different
things in your life were at the
time, you might agree that hav-
ing an exit strategy is impor-
With these blue-chip invest-
ment homes, you’ll fnd mul-
tiple exit strategies. Median-
priced homes have the widest
available buyer pool. Think
about that for a minute: Lower-
end homes typically are resold
to investors. So imagine buying
a home on the lower-end at 60
cents on the dollar and thinking
you have a lot of equity. In fact
if your future end buyer is an
investor, do you think they’ll
pay 100 cents on the dollar?
Time on the market is also
another factor. At the median-
home price, time on the market
is usually shorter than any other
price point. So in planning your
long-term strategy it seems to
make sense to invest in homes
that could be sold quickly, f-
nanced easily, and sold at or
near market value?
Where to Find
There are many markets you
can fnd these types of proper-
ties in today. Without going
into much detail in this article,
there are plenty of cities which
lie in states outside of Califor-
nia, Nevada, Arizona and Flor-
ida, which were impacted very
little by the housing boom and
bust. Many of these cities have
a good economic future, afford-
able tax rates, net population
growth, and high enough rents
to achieve positive cash fow at
the median home price.
In Summary
With distressed properties mak-
ing up a large percentage of
total sales, then it only makes
sense to focus on buying blue-
chip homes at a discount today.
In doing so, one can realize
equity through quality reno-
vation, placing a tenant and
holding. These homes should
provide you relative peace of
mind when compared to lower
price points due to the lower
socio-economic risk discussed
These types of rentals are a
good ft for people looking to
diversify out of equities and
accumulate a few properties.
While they may offer stronger
fundamentals than most prop-
erties they obviously aren’t
bullet-proof. These are compa-
rable to owning GE stock (GE
registered no U.S. proft last
year). While you can depend
upon these homes most of the
time, the downside risk is usu-
ally minor price depression
during an economic recession.
Lastly, in many markets this
type of product and strategy
simply wasn’t an option when
prices were higher. I doubt that
very far into the future this
opportunity will be as widely
available again in as many mar-
kets as it is today.
Ryan Hinricher is co-founder
of Investor Nation, visit online:
Having an exit strategy
is an essential part of
your real estate plan.
Realty411Guide.com PAGE 24 • 2010 reWEALTHmag.com
Blue Chip Real Estate Strategy, pg. 22
just had a great call with one
of my coaching students on
how to get a deal signed up by
the end of today. Times are tough,
and although sending direct mail
pieces is a great way to get leads,
sometimes it’s just not possible
to send them out — especially if
you’re just starting out. So over the years,
I’ve learned some “cheapskate” ways of
fnding leads.
1. Online RSS: If you’ve been in real es-
tate any amount of time, you probably al-
ready know that online sites such as Craig-
slist, Redfn, Backpage, Oodle, etc., can
have some pretty amazing leads on For
Sale By Owner (FSBO) properties. The
only problem is that it takes tons of time to
sort through all those sites to fnd a decent
Rhett Halsey, one of my good friends and
an internet marketing guru for real estate
investors, told me of a free feature offered
by most websites: RSS or Real Simple
Syndication. Instead of multiple searches
for leads, the leads come to you in one
spot. You can set up a Google Reader ac-
count and have all these leads sent directly
to you, the minute they are posted on one of
these sites. It’s simply amazing how much
time this saves.
We have just implemented this in my of-
fce and within a few days got three proper-
ties under contract and sold them within a
few hours. My new assistant was foored
at how quickly an investor can get a deal
under contract and sold!
To set up your own RSS feed, go to your
favorite FSBO site, Craigslist (www.Craig-
slist.com) for example. Do a search using
motivated seller keywords like “fxer,”
“investor,” etc., one word at a time. Once
the search is complete, you can scroll to the
bottom of the page and click on RSS or the
little orange RSS icon. Set it up to point to
your Google Reader, and you’re done!
2. Multiple Listing Service: Your local
MLS (Multiple Listing Service) offers a
great way to fnd leads for free. You can
narrow down your search
to REOs, probates, fxers
or other criteria. You don’t
even need access to the
MLS, just fnd an investor-
friendly agent and let them
know your criteria. They
will set you up to receive
free emails.
It’s important to work with an agent who
knows you want a smokin’ deal, and who
will make lots of lowball offers on your be-
half without finching.
For most listings, other than REOs, you
can also try and make seller-fnancing
deals. The point is to get your foot in the
door and start negotiating with the seller.
Another lead system you can set up on
the MLS is expired listings. These list-
ings have expired without anyone buying
the property. This can mean you’d be deal-
ing with very motivated people!
Set up a win-win situation with your
agent where they can present your offer,
and if the sellers don’t like it, the agent may
be able to pick up a new listing.
3. Other Wholesalers: One of my absolute
favorite ways to fnd deals is to ask other
wholesalers what they currently have un-
der contract and to market that property
to my buyers’ list. Or, if you’re a rehab-
ber or landlord, you can pick up amazing
deals without having to do all the leg work.
Where do you fnd these wholesalers? If
you see a “We Buy Houses” sign, call them.
You’ll likely be dealing with a wholesaler.
Also visit your local REI meetings, Google
“wholesalers” in your area, ask rehabbers
who they recommend, and ... don’t forget,
ME! I’m an active wholesaler in Southern
California who loves working with other
investors. (Shameless plug? Of course.) If
you get a deal done and need to sell your
property really quickly, let me know.
Well, now there is no excuse for you not
to fnd a deal today! Good luck and send
me a brief email letting me know if you
found this helpful.
To contact Ginger Macias or learn about
her speaking engagements and wholesale
deals, visit: www.OCWholesalers.com
3 FREE Ways to Find a
Great Wholesale Deal Today!
Realty411Guide.com PAGE 25 • 2010 reWEALTHmag.com
by Ginger Macias
et’s face it …
the country,
t h e e c o n -
omy and the real
estate market is
just terrible. There
are no more good
deals. Let’s all get
out of the business.
People are not building, buying or selling
homes any more. There are so many over-
encumbered and foreclosed-upon cheap
properties available for pennies on the
dollar that nobody wants them anymore.
After all, who can make a living in this ri-
diculous business these days?
Oh yeah?
And Michael Jackson faked his death,
Elvis eats at Burger King, and the world
ends in three years!
Not that they’re needed anymore, but
here are a couple solutions to these hor-
rible problems facing real estate investors
in this disastrous economy:
1. Stay in bed with a tinfoil hat on your
2. Go live with your parents and let them
feed you until you win the lottery.
3. Go back to school on the government,
and get a law degree so you can force peo-
ple to pay you to stop suing them.
4. You can capitalize on singularly the
greatest money-making opportunity ever!
And you don’t even need a dollar or a dime
to do it.
The short sale industry is burgeoning
now and will probably continue to do so
for three more years. New short sale mil-
lionaires are being made every day. There
are billions upon billions of dollars (Re-
member when a billion dollars was a lot
of money?) to be made in the “transac-
tional funding” of compromised mortgage
defaults — loans that would otherwise be
forced into expensive and time-consuming
foreclosures, and sold by lenders at public
Def: Short Sale: The acquisition of real
estate at a compromised (wholesale) pay-
off amount that is less than the balance of
the mortgage obligation.
Def: Transactional Funding: The two-
stage practice of using another person’s
A Brave New
World in
money for a day
or two at a high
interest rate (but at
a reasonable cost),
with which to pur-
chase a foreclosed-
upon property by
means of an all-
cash offer prior to
its scheduled pub-
lic sale date. And then selling it on the day
of closing, or soon thereafter, in a separate
escrow settlement to an end-buyer who ob-
tains his own loan and lives in and loves
the property forever.
This process is known as the “A to B/B
to C transaction.” In other words, you, the
investor are the “B” component; the cur-
rent owner is “A,” and the end-buyer is
“C”. In other words, “B” buys from “A”
in one escrow closing process (taking full
ownership of the property), and then sells
the property to “C” at a reasonable proft in
a wholly separate escrow process.
It all sounds simple and it is! However,
a thorough knowledge of all the rules and
regulations concerning short sales, equity-
purchasing, equity-stripping, foreclosure
consulting, credit repair and mortgage
lending is absolutely mandatory before
becoming too far vested in the business
of short sales. To date, hundreds of other-
wise nice-guy and gal would-be investors
have been severally sanctioned, shut down,
heavily fned and/or sent to prison for vio-
lating the very stringent laws regulating
short sales and foreclosure consulting in
various states.
In my own case, I’ve spent my busi-
ness as a fearless bull rider: but in this last
Rodeo, I’m sticking to riding milk cows.
I won’t set any records or win any prizes;
but I’m a lot less likely to get thrown of and
have a horn poked up my rear end (… this,
is, by the way, an analogy … not a good one,
I agree, but an analogy none-the-less).
One of the most often violated of the
many regulations being put on the books
as of late has been that of taking money
for, or in advance of, services to be ren-
dered, whether such services are actually
performed or not. Another common viola-
tion has to do with “sand bagging” by attor-
neys, and many non-attorneys, who bill on
a monthly basis for services (mostly loan
modifcation schemes) while a short sale
or loan modifcation process is presumably
taking place. Instead, either there never was
any such attempt or the attempt failed, and
the client wasn’t informed and was told,
“We’re working on it…be patient,” while
the monthly payments continue.
Another big one, and one that is proba-
bly most tempting but also most deadly for
REALTORS®, is the situation wherein the
investor/REALTOR® has already lined-
up a retail buyer who is ready to take the
property at its true market value following
the short sale acquisition by the investor.
When the scheme comes to light, the con-
tention by the lender in these cases is that
if the property were worth more than they
were told in the transaction, there would
have been no need for a short sale and their
resultant loss. They see such schemes as
blatant bank fraud and have no sense of
humor in such cases. As a matter of fact,
in Massachusetts were
recently sentenced to fve years in prison
each for having used this scheme several
So the long and short of it is…kind’a
like Henny Youngman was one to say: “If
it’s gonna hurt when you go like that … for
cryin’ out loud, don’t go like that!”
Today’s short sale market is burgeoning.
“...two REALTORS

in Massachusetts were recently
sentenced to five years in prison each for
having used this scheme several times.”
by Bill Gatten
Continued on pg. 29
oday’s real estate environ-
ment can seem a little
tricky to navigate. So many
possible ways to make
money exist in this indus-
try, it can be overwhelm-
ing, especially for those who are just get-
ting started in real estate investing. There
are many late-night television shows that
claim to teach you how to be a multi-gazil-
lionaire by next week, but is there any truth
to what they’re saying?
Take a look around. You’ll notice that
there are a lot of successful real estate en-
trepreneurs, people who are making a kill-
ing today, in this down market. The ques-
tion is did they just start making lots of
money by pure luck, or did they have men-
tors, courses and systems to help them
achieve their success? Those of you who
are living the real estate dream, you know
that luck had little to do with where you are
today. It takes concrete actions, goals and
guidance to get to your dreams.
Well, for those of you starting out in real
estate who are anxious to get going, there
are wonderful ways to get into all this ac-
Recently, I spoke with Matt Malouf
about his new program, which helps inves-
tors bridge the gap from real estate dream
to reality. And by reality, I’m talking about
actually owning your very own investment
property at the end of the course! (More on
that later.)
Malouf is an investor-friendly real estate
agent in California and has been investing
since 2001. Over the years, he has special-
ized in wholesaling, owner fnancing and
foreclosures. Malouf has developed a busi-
ness model that he describes as T.E.R.M.
“It is a model designed to effciently
minimize the investor’s time, energy, re-
sources and money – in that order,” he ex-
To that end, his program is a 10-week
course that walks investors through the ex-
act steps needed to fnd, analyze and buy an
investment property that cash fows from
day one. Some topics include learning how
to set up your property management team,
screen tenants, how to hold title and fnanc-
ing options.
The motivation to create this course
came from Malouf’s desire to meet the
needs of investors who want to get educat-
by Ginger Macias
Weeks to
with Matt Malouf
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ed and match them with the
best available product in the
real estate marketplace.
This “hybridization” will en-
able beginning investors to buy
a property that meets their cri-
teria, after learning all the basic
steps needed to acquire and
manage that property.
“This is not just a course,”
Malouf explains. “At the end of
10 weeks, they’re going to have
a cash-fowing house, an asset
to put in their portfolio. It is
all- inclusive in the program.”
Malouf’s T.E.R.M model is
ideal for someone who has a
full-time job and wants to start
building a real estate portfolio
as part of their retirement plan.
Over the course of 10 weeks,
students receive the entire
course through the internet,
which includes 30 to 60 minute
lessons by audio, video and text
articles. Each student also re-
ceives the “Million Dollar
Rolodex,” which gives the con-
tact information of all the key
with Matt Malouf
It takes concrete actions, goals and
guidance to get to your dreams.
There really is no limit to the
number of homes in foreclo-
sure that lenders would like to
get off their books in order to
reduce their matching fund re-
quirements and free up more
cash to lend out.
Millions of dollars are ready
to be made by integrally in-
volved entrepreneurs over the
next few years.
To miss out on any of it
would be an out-and-out shame
… if not a crime.
There are two sets of adages
to live by that one must ponder
and decide upon before jump-
ing into the business:
Set A - “Strike while the iron
is hot”; “He who hesitates is
lost”; “The early bird gets the
people on the team. Malouf and
his team then go out and fnd a
property that meets the stu-
dent’s needs. They send per-
sonalized updates, letting them
know what’s being done to fnd
them a property.
This program lays the foun-
dation to successful real estate
investing. Malouf gives this
analogy: “It’s like building a
skyscraper. You have to spend
the time to set up a foundation
and set it nice and deep, nice
and strong. That way, it will
stand through the good and the
Malouf’s T.E.R.M program
launched this summer and is
available year-round to a limit-
ed number of people. Be sure to
reserve your place today.
Readers can contact Matt
Malouf directly at (562) 443-
7042; mention the “out-of-
state magazine special.” Or
visit: www.buysellwithmatt.com
Enter the promo code “Real-
ty411” in the note section.
worm,” and “If everybody is
doing it, it’s time to do some-
thing else.”
Set B - “Haste makes waste”;
“Look before you leap”; and
“Wait until all the bugs are
worked out before you jump
in,” or “Wait until you see ev-
eryone else doing it, then jump
in … why take chances?”
My own: “Successful people
make quick decisions and are
slow to change their minds, the
unsuccessful are slow to com-
mit and quick to change their
So, what’s my advice regard-
ing the current short sale mar-
ket? OK, guess!
A Brave New World, pg. 27
Realty411Guide.com PAGE 29 • 2010 reWEALTHmag.com
ness cards in hand. Dressed in casual cloth-
ing, they chatted while munching on choc-
olate chip cookies. They discussed their
latest deals, needs and goals.
When the master approached the front,
the students took their seats and settled
down quickly, ready to start their lesson.
Sensei’s cash and wealth system is pure
and simple. He trains his students on how
to create cash quickly through fipping real
estate so that resources can be funneled to
purchase income-producing property.
And what areas are being focused on?
Right now, he has two major target zones.
Phoenix, Ariz., is his target zone for rehab-
bing fips and rentals; Southern California
is his bulls-eye for wholesaling properties.
He and his members target Phoenix as
their area of operation for fxing and fip-
ping properties for immediate paydays
Hitting the Club with
Sensei at 12 Rounds
elf-reliance, balance, integrity:
these are just some important
mantras in the martial arts world.
Step into a monthly meeting at
Black Belt Investors and you’ll soon dis-
cover these disciplines are in full force.
With two locations in Southern California
(Downey and Norco), Black Belt Inves-
tors provide a social network for both
the novice and seasoned. It is a club
where education is emphasized, deals
are analyzed, and action is taken to
reach goals.
Ricardo Valencia, a national investor
with holdings in four states (CA, TX,
IN and MO), stressed the importance
of attending monthly club meetings,
as we were walking into a community
center in Downey.
“We have a responsibility to teach
those who are newcomers,” he says
with a smile, “And, at the same time,
you learn from those who are more
Valencia, who travels throughout
Los Angeles County to attend numer-
ous real estate events, admits that
the members of Black Belt Investors
“keep bringing me back ... it’s always
nice to mix and mingle with them.”
What began as a casual meeting at
a coffee house in 2000, by investor,
martial arts expert and entrepreneur,
“Sensei” Sean Gilliland has become
an organized offcial club boasting
two locations and flling the room
with a strong following each month.
Sensei chose to stake his claim in Downey,
the city where he was raised. Next, he chose
Norco, the city where he now lives with his
wife, Annamaria, a licensed REALTOR
and their three children.
The club meeting room, located inside a
community center, was full and bustling in
May. The sweet aroma of freshly brewed
coffee and abundant smiles were inviting.
The group, mostly in their 40s and 50s,
was diverse in experience and background.
They were master networkers, with busi-
and building wealth through cash-fowing
rentals, all using Sensei’s Remote Rehab-
bing program. “The Phoenix market is pro-
viding incredible wholesale deals on newer
homes starting at $48,000,” he says. “Flip-
pers are turning their properties and cashing
out about every 90 days. The buy and hold
strategists are capitalizing on great cash
fow averaging $900 per month.”
Although he started his career as a
remote rehabber (his frst deal was in
Florida), he now prefers to wholesale
and calls it: “The Ultimate Real Es-
tate Cash Machine.” His investing
formula, “Find it, Bind it and As-
sign It™,” is used in California, but
the strategy can be duplicated in any
area, in any market.
Wholesaling “does not require cash,
credit or a license, which equals NO
RISK.” He further explains, “The
intention is to sell the contract to in-
vestors who can’t fnd a deeply dis-
counted deal on their own.”
While many people, including Bro-
kers and REALTORS
who do not
understand creative real estate, frown
upon any deal that is not a traditional
transaction, wholesaling retains an
important role in the community.
As a matter of fact, wholesalers are
often the frst to spot and service a
homeowner or property in distress.
In wholesaling, success depends on
recognizing circumstances and offer-
ing solutions.
Sensei recalls one recent transac-
tion in which he assisted a family made
up of siblings scattered around the country
who were feuding over an inherited home
in need of many repairs. Because of the
stress it was bringing upon the family, they
wanted to dispose of the property quickly.
Sensei packaged the deal and sold it to a lo-
cal rehabber willing to put in a lot of sweat
equity and cash. The investor was willing
to take a risk for a chance to proft.
Continued on pg. 59
by Linda Pliagas
Can’t seem to locate
a distressed home-
owner or unwanted
property? Believe it
or not, many people
have real estate that
they no longer need
or want. (Yes, we
frst found this con-
cept hard to believe
too!) Follow these
fve secrets from a master wholesaler,
and you’ll soon have more deals than
time to work them.
#5: Code Enforcement: Many local gov-
ernment websites, such as Los Angeles
County, offer online lists of distressed
properties. This is an often overlooked
treasure flled with potential gems.
Sensei Spills His Top 5
Secrets to Land a Deal
Continued on pg. 59
Sensei Gilliland
Realty411Guide.com PAGE 30 • 2010 reWEALTHmag.com
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951. 780. 5856
Cal i f or ni a Depar tment of Real Est ate, Real Est ate Broker
Br uce Nor r i s Fi nanci al Group I nc.
DBA The Nor r i s Group
DRE Li cense 01219911
California Trust Deed Investing
Navi gati ng the
prof i tabl e worl d of
trust deed i nvesti ng
wi th the hel p of one of
Cal i f orni a’s l eadi ng
hard money l endi ng
compani es.
Cal l or vi si t our websi te
today f or your
Free Book and DVD.
Savings accounts, CDs, and stocks have
offered dismal returns over the past
several years. The Norris Group’s trust
deed investments earn 9% return backed
by olscounteo, casb-Nowlng, Calltornla
real estate.
Since 1997, our experienced team of
experts has originated California trust
deed investments to private individuals,
corporatlons, nonproñts, ano retlrement
accounts (including IRAs).
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real estate lnvestors borrow mllllons
of dollars every month and demand
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event honors her courageous effort to fght
this disease and hopefully adds to the like-
lihood of someday fnding a cure.”
In addition to raising breast cancer
awareness and funds for research, as well
as providing investors of all levels access
to information, “I Survived Real Estate”
has been instrumental in spotlighting the
crucial role investors have in our nation’s
economic infrastructure.
Norris explains: “This event gives a
chance for investors to be seen in a different
light. We all know investors are often seen
as the “sharks”
of the real estate
i ndus t r y. We
take this night
to show other
sectors that we,
as i nves t or s ,
play a signif-
cant role in the
solution side of
the market.”
Norris knows frsthand that real estate
investors take great risks in a volatile mar-
ketplace. “With greater acceptance, their
ideas have a better chance at being heard
and being implemented,” he says.
The charity event was designed to give
everyone, regardless of personal income,
an opportunity to participate.
“By joining our walk team and raising
the money in their networks, attendees
and sponsors can technically come free of
charge,” Norris explains.
Sponsorship opportunities are also
available. Benefts for advertisers include
inclusion in all mailers to local, state and
national government offcials, SEO op-
timized website advertising, inclusion in
mailers and fyers, plus event program
and screen exposure. Each sponsor is also
mentioned in video and radio segments that
air before and after the event.
For more information, please visit online:
by Lori Peebles
oes “Shadow Inventory” really ex-
ist? What is the state of the REO
market? These are just some of
the crucial questions to be
tackled by real estate in-
dustry experts on the eve-
ning of September 17.
The Norris Group,
headed by Bruce Norris,
a 30-year veteran known
among investors as the
“Nostradamus” of Cali-
fornia real estate, is once
again organizing their an-
nual philanthropic event in
Orange County.
This black-tie affair
is one of the most fash-
ionable tickets in town,
mixing charity, important
trend updates, education,
entertainment and industry networking. It
is always a sold-out gala, one that attracts
the Who’s Who of real estate.
When we attended last year, it was fasci-
nating to note that besides all the tuxedos,
satin dresses and crème brulées on fne chi-
na, some serious industry trends and alter-
native solutions were pre-
sented in just a few hours.
It was an evening of edu-
cation with a sophisticated,
entertaining twist, much like
the man behind the event.
“The theme for ‘I Sur-
vived Real Estate 2010’
will again focus on trends,
solutions and have an added
focus on the state of REOs,” Norris says.
“With constantly changing government
regulations, it’s been diffcult for anyone in
the real estate business to build a sustain-
able business model.”
Norris, a 30-year veteran investor (from
rehabber to private lender) is a champion
Investors & Industry Leaders Share
an Evening of Glamour & Giving
The 3rd Annual “I Survived Real Estate 2010” will Raise Money for
Breast Cancer Research & Unite the Nation’s VIPs to Discuss Investing
for investor rights. For the past two years,
he has united real estate giants to discuss
the issues that matter, and most important-
ly, to exchange ideas that can help investors
do what they do best: rebuild communities
and rejuvenate econo-
“The panel we’re
putting together can
speak about these issues
from several differ-
ent point of views and
hopefully provide us
with some new
i nsi ght s mov-
i ng f or war d, ”
Norris explains.
Some returning
guests, include:
Joseph Magdz-
iarz, 2011 presi-
dent for the Ap-
praisal Institute;
Tommy Williams, 2008 president of
the National Auctioneers Association; and
Christopher Thornberg, principal of Bea-
con Economics.
New guests are also being added. “We
are very excited to have Sean O’Toole
from Foreclosure Radar joining the panel
this year to add his
data-driven and in-
vestor-minded per-
For Norris, the “I
Survived Real Es-
tate” series is per-
sonal. This night is a
way of honoring his
wife, his family, his
community and profession.
In the last two years, the fundraiser has
raised over $100,000 for the Susan G.
Komen Foundation; these funds are used
for breast cancer research.
“My wife, Marsha, was diagnosed with
breast cancer more than 15 years ago. This
Bruce Norris with his wife & son.
Guests at the last year’s event.
Tommy Williams
Realty411Guide.com PAGE 35 • 2010 reWEALTHmag.com
ainstream reporters who
present real estate as
doom and gloom surely
haven’t been to Mem-
phis. The city, known as
the birthplace of rock ’n’ roll and the blues,
is bustling with industry activity — and
visitors aren’t just touring Graceland and
Beale Street, they’re leaving as bona fde
Our editorial team was invited to attend
The Ultimate Cash Flowing Buying Tour
by MemphisInvest.com, a boutique, Mem-
phis-based brokerage catering to out-of-
state investors.
The company, which serves more than
200 clients and manages more than 650 in-
vestment properties for them, joined forces
with the San Diego-based FortuneBuild-
ers, Inc., (owned by Than Merrill and the
“Flip This House” team) and
together they organize one of
the largest property buying
events in the nation.
“You’ll never see anything
quite like this,” promised
Kent Clothier Sr. during our
telephone conversation a few
months ago. Kent Sr. is found-
er of MemphisInvest.com. He
takes the helm of the 18-team-
member operation, which is
managed by his three sons,
Kent, Chris and Brett.
In my six years as an out-of-state inves-
tor, I had never attended a property buy-
ing tour. Plus, I repeatedly heard about
the benefts of the Memphis market from
many sources. I thought, ‘What a perfect
time to put on my reporter’s cap and go get
the scoop.’
The Ultimate Cash Flow Buying Tour def-
initely stood up to its name. Just being in a
room flled with investors from around the
nation was electrifying. On the frst day, the
event was held at a ballroom in the Hilton
Hotel, a circular 27-story glass beauty with
outstanding views and plump pillows. In-
vestors traveled from 18 states to attend,
one couple arrived from Canada.
Most of the attendees were investors
wanting to learn how to be-
come MemphisInvest.com
clients. Many were referrals
from their existing client
base, and some were repeat
“Our average client buys
four homes and refers us to
all of their friends and fam-
ily,” says Chris Clothier,
director of sales and market-
MemphisInvest.com pro-
vides clients with an option of either buy-
ing a turn-key rental home or one that needs
rehab. The company oversees the work for
the investors. Each property has a separate
quote for the renovation included in its pro-
forma profle. If the rehab goes over bud-
get, it comes out of the company’s pocket.
MemphisInvest.com caters to investors
who are looking to buy in typical middle-
class areas. The company says they stay
away from crime-ridden pockets of the
city, regardless of how the numbers may
appear on paper.
“We only offer houses in the same areas
where we have our own personal invest-
ments,” Chris says. The Clothiers person-
ally own more than 100 rental homes in a
handful of quality, long-term buy-and-hold
areas of Memphis.
Typical home prices range from $34,000
to $85,000, rents average out be $850 per
month. The city boasts high rents and low
prices. But surprisingly, 48% of Memphis
residents rent.
The Clothier family, who were formerly
in the grocery business, moved to Tennes-
see because they saw such an opportunity
for long-term real estate investing and
monthly cash fow.
At the time, Kent Sr., Kent and Chris
were scattered about, working in different
real estate markets (Texas, Colorado and
Florida). Memphis real estate brought the
family together. It’s an additional perk for
proud papa Clothier. “I’m the luckiest man
in the world to have my sons working next
to me,” Kent Sr. told the crowd that day.
On the frst day of the tour, the investors
gathered to get educated on the local mar-
ket, meet the Clothier family, and mingle
with JD Esajian from FortuneBuilders.
(The “Flip This House” team owns numer-
ous rentals in the area.)
for The Ultimate Cash Flow Buying Tour
Continued on pg. 58
The Clothier family, from left to right:
Chris, Brett, Kent and Kent Sr.
MemphisInvest.com & FortuneBuilders
Unite Investors from 18 States & 2 Countries
and Sell 29 Rental Homes in 2 Days!
by Linda Pliagas
Realty411Guide.com PAGE 37 • 2010 reWEALTHmag.com
MMG June2010 Ad PRINT.pdf 1 6/16/10 12:49 PM
We’re looking for current
value as opposed to future
value. Loans that need to be
based on an ARV or higher
appraisal value won’t typi-
cally work for an asset-based
lender. However, we do have
clients who are rehabbers
who own other free-and-clear
property, they then secure a
line of credit with us for the
purpose of purchase and re-
habbing more property.
The allure of their program
is that underwriting guidelines are not
based on the borrower’s credit, income or
seasoning, which truly opens up the play-
ing feld for many more investors. In real
estate transactions, time is truly of the es-
sence, and Gleason explains how their pro-
gram can help investors move confdently
on offers and close quickly on deals.
We take a very common sense approach
to lending. Asset-based lending has been
around for decades, but it was largely
abandoned by most firms during the boom
years because anybody who could fog a
mirror could get credit. Now we’ve ar-
rived back to an old school standard where
we’re lending realistic amounts against
realistic values and realistically taking
into account the kind of trouble that our
marketplace is in. It’s really a plus and a
minus for investors – only those who have
solid assets are able to obtain financing
and “nothing down” scenarios don’t ex-
ist anymore. But, for those who have the
net worth to support an asset-based loan,
there’s very little competition for them and
they can align themselves with a private
lender like us who will provide them quick
capital based on their current equity.
Seeking Financing
for Your Next Deal?
This California-based private
lending company offers creative
financing solutions in all 50 states
MMG Capital Funds Creative
Investors Across the Country
Interview and article
by Lori Peebles
MG Capital, LLC,
an asset-based lend-
ing company, be-
lieves successful in-
vestors need to have
skin in the game.
For that reason, they still invest company
funds alongside those of their investors
who supply the private money used in their
Both company and client assets have
grown signifcantly since their formation in
2007. In fact, the compa-
ny’s principals have been
responsible for the man-
agement of assets valued
at more than $6 billion.
Although MMG Capi-
tal is only three years old,
the principals have over
50 years of combined industry experience;
their expertise includes banking, private
equity transactions, development, secured
lending, land acquisitions and sales.
From an investor’s point of view, one of
the most impressive features of the com-
pany is that they lend on a national scale
— most “hard money” frms keep close to
home and rarely venture off into faraway
“We’ll go to all 50 states,” says Chris
Gleason, managing director of MMG Capi-
tal, LLC. He explains further, “There are
a number of markets across the country
where we’ve found the types of deals that
we look for, and they tend to be in higher
value areas with greater demand.”
Currently, the states where MMG is the
most active are California, Florida, New
York and Tennessee.
The frm’s success stems from their rig-
orous lending practices, Gleason admits
that only one deal out of 75 makes sense for
them to lend on. However, since they are
an asset-based lender most investors have
an easier time qualifying for an MMG loan
compared to a bank.
With MMG Capital,
no income verifca-
tion is needed nor is
credit score or sea-
soning taken much
into consideration.
Recently, our editorial team spent time
reviewing some of the company’s pro-
grams, which include private lending, trust
deed investing and unique investing vehi-
cles, which offer short-term liquidity and
safety backed by real estate.
We then asked Gleason to give us and
our readers a better understanding of how
their services can help leverage the as-
sets of their clients so they can grow their
wealth more quickly.
First, Gleason gives us a glimpse as to
who their typical “hard money” lending
client might be and shares some of the cri-
teria they look for when funding deals.
We see a very wide range of real prop-
erty investors who are looking for capital,
all the way from the most sophisticated
investor down to the beginner. The inves-
tor who makes the best candidate for an
MMG Capital Loan is the investor with
at least moderate real estate investing ex-
perience and a substantial balance sheet.
MMG Capital is an asset-based lender, so
we’re really looking for two things: hard
equity and net worth. We can be a great
financing partner for a real estate inves-
tor who is doing significant business and
already has some substance to their bal-
ance sheet.
Continued on pg. 61
Chris Gleason
Realty411Guide.com PAGE 39 • 2010 reWEALTHmag.com
oodson “Chip” Philbin be-
gan his career as a securi-
ties broker, but he soon
left Wall Street
to sell “tangible” investments.
Fast forward 23 years later,
the Sacramento-based lender
and mortgage broker now has
a successful career as a real es-
tate syndicator.
Many professionals are lured
into the real estate industry
with a hope of one day purchas-
ing the very object they sell. At
frst, Philbin, CEO of Philbin
Capital, wasn’t focused on his
own portfolio as much as those
of his clients. He was initially attracted to
the business as a commercial real estate
lender and mortgage broker because it
made fnancial sense in contrast to the high
volatility of the securities market.
“At one of my previous employers, the
management started a real estate investment
trust, got it listed on the American Stock
Exchange, and raised about $100,000,000
to do mortgage loans. They went through
the hundred million in about fve years,“ he
recalls. “Here I learned that one of the main
objectives of those that manage REITS is
to generate management fees and not nec-
essarily safeguard their investors’ money.”
That experience, along with his experi-
ence as a stock broker and other stories
similar to ENRON, made Philbin wary of
paper assets. He explains: “Stocks have
limited true inherent asset value contrary to
real estate, which is tangible.”
Philbin, who was busy arranging funding
for multimillion dollar deals his investors
were securing, did not stay on the sidelines
for long. “I formed a partnership with ten
people I knew, and we made a hard money
loan to a small grocery store north of Sac-
ramento,” Chip says. He adds, “We loaned
the owner/operator about $1,000,000 at
11% for two years. I had $100,000 in this
deal and my investors provided the rest.”
One of the benefts of working in real
estate is the networking opportunities that
come about in everyday affairs. Routine
business connections can turn into friend-
ships, which can then evolve into joint ven-
tures. That was exactly the
case for Philbin. His career
as a commercial mortgage
broker opened the way for
joint ventures with his as-
sociates and clients.
“I was referred to a well-
heeled investor by Comer-
ica Bank, who owned
a high tech company in
Santa Clara and needed
to refnance his plant. I ar-
ranged the loan and didn’t
hear from him for about
four years,” he recalls. But then one day,
opportunity knocked.
“He called me in to discuss another ref-
nance, this time a cash-out refnance. We
did some analysis on how much he should
borrow and I arranged another loan for
him. At that point we decided to become
partners and to purchase cash-fowing
commercial and multifamily property.”
The new partners joined forces and
funds, which led to the purchase of a 72-
unit apartment complex in Chico, Calif., a
property they still own today.
When questioned about his transition
from adviser to partner in his dealings with
clients, Philbin replies: “People have a real
need for trusted advisers who are experts
in their given industry. If you have a high
degree of integrity and put your clients and
investors ahead of your own interests, then
opportunities will present themselves.”
Although rehabbing tends to attract the
spotlight in real estate, Philbin shuns those
quick-turn deals and prefers to invest with
a fve to seven year minimum holding pe-
riod. Because of his mortgage background,
when possible, Philbin prefers to refnance
the asset after an initial holding period so
that investors can retrieve their initial down
payment, leaving little or no cash in the deal
and magnifying returns. Philbin is partial to
owning retail centers, single tenant NNNs,
multifamily and industrial properties.
His angel investor continued to be in-
volved in projects with Philbin and togeth-
er they built a solid portfolio.
“With him as my partner, I developed
three single-tenant NNN leased commer-
cial buildings, all leased with terms of 15
to 20 years, in which I placed fxed-rate
permanent fnancing right after completion
and occupancy by the tenants.”
Long-term buys may be his strategy of
choice, but make no mistake, cash fow to-
day is the goal when Philbin and his inves-
tors acquire a property.
His success record is impressive. “The
cash fow from this small portfolio is
nearly $400,000 annually, plus I was able
to fnance out almost all of our entire cash
investment, so we have very little cash left
in these deals.”
The massive passive cash fow has been
a blessing, but Philbin admits it made him
a bit complacent. For the past several years
he’s been working primarily on his handi-
cap at the Northridge Golf Club in Fair
Oaks instead of pounding the pavement to
procure new investors.
But now that his primary angel investor
is retiring, Philbin is actively recruiting
new investor partners who are interested
in commercial investment opportunities in
the Northern and Central California mar-
The company prides itself in investing
funds into every deal alongside the partner.
He believes in full disclosure, low manage-
ment overhead, and welcomes partners who
are relationship-oriented and are seeking
long-term, tax-sheltered passive income.
While profts and returns are what inves-
tors strive for, Philbin stresses that build-
ing long-term business relationships is the
most gratifying aspect of the real estate
“I really enjoy people and enjoy the real
estate business,” says the 29-year industry

For questions regarding commercial real
estate, contact Chip at (916) 961-6832 or
visit: www.PhilbinCapital.com
Chip Philbin
Realty411Guide.com PAGE 40 • 2010 reWEALTHmag.com
Veteran Syndicator Discovers
Golden Opportunities in California
by Lori Peebles
Real Estate Investments/Partnerships
Visit our website at www.philbincapital.com
“[Chip] is unique in that he has true professional understanding of all key
cspects of commercìcl recl estcte ccqµìsìtìon, constrµctìon cnd ñncncìn¤.
He has been very open in his communications and honest to a fault in
hìs declìn¤s wìth me...l ccn't recommend hìm hì¤hly enoµ¤h for other
ìndìvìdµcls wcntìn¤ to do recl estcte ìnvestìn¤."
Gerald McIntyre - Partner
- PhIlbIn CapItal CorporatIon Is acceptIng lImIted
partner Investors to purchase and hold IndustrIal,
retaIl and multIfamIly propertIes In Central and
Northern CalIfornIa.
- Targeted Investors are hIgh net worth CalIfornIa
resIdents who lack the tIme, expertIse or capacIty
to Invest IndIvIdually.
- PropertIes wIll generate tax sheltered cash ßow
and buIld equIty through value apprecIatIon and
loan prIncIpal reductIon.
- Ìnvestors rIsk Is lImIted to theIr Investment;
Ceneral Partner provIdes any and all loan
- Ceneral Partner has 29 years commercIal real
estate experIence and Invests In each deal.
- For further InformatIon, please contact:
Chip Philbin 916-961-6832 wlphilbin@yahoo.com
Realty411Guide.com PAGE 41 • 2010 reWEALTHmag.com
later when he worked for the
Atari Corporation. Thanks
to his modern dance classes,
he was able to calculate how
much resolution of movement
was needed in their video
The real estate entrepreneur
Frank Morrow explains that
he got his entrepreneurial
education while attending the
graduate school of business at
Stanford. Although he took
all the required courses in marketing, f-
nance and accounting, he said. “I learned
more about business from a drawing course
than anything else. My teacher taught us:
‘All art is a series of recoveries from the
frst line. The hardest thing to do is to put
down the frst line. But you must.’ The
same is true in business. You must act. A
lot of business school-types analyze things
to death and never get around to acting.
Perhaps more of them should take drawing
I believe your mindset is more important
than nuts and bolts. We have plenty of real
estate knowledge at our monthly meetings
and seminars to arm you with helpful tools
to succeed in this market. But I challenge
your beliefs relative to success. Remem-
ber that unless you break with the old,
you won’t let in the new. In other words,
Light (education, abundance and love)
won’t come into your life until you show
the courage to literally kick out Darkness
(ignorance, scarcity and fear.)
So expand your horizons, step outside
of what’s considered normal, break the
boundaries of what seems reasonable, and
act upon your knowledge. There’s never
been a more important time in our coun-
try’s history (or the world for that matter),
than the present. What we do today will af-
fect humanity and shape our future destiny.
So, let’s make it a good one.
Kindest regards,
Sam Sadat — sam@samsadat.com
Be sure to visit online: www.LAREIC.org
re you a creative person? When
was the last time you came up
with a creative idea? But why
be creative? Why challenge the rules and
perhaps even appear stupid to others? Be-
cause creativity is the stuff of life. That is a
big reason, but there are other more reasons
to consider. Another reason is change. We
all know the only constant in life is change,
albeit we tend to resist change. (In fact, the
only person I know who likes “change” is
a wet baby.)
When things change, new information
emerges, which leads to a brand new set of
problems. It’s proven time and time again
that it’s no longer possible to solve today’s
problems with yesterday’s answers. So you
have a decision to make: You can either
complain about how diffcult things have
become or employ your creative juices to
come up with new ideas, new solutions,
and new paradigms.
This economic turndown has vastly infu-
enced our lives in recent years. It has forced
us to stop and examine our lives. Socrates
once said “an unexamined life is not worth
living.” So, I think this recession may ulti-
mately prove to be a good thing because we
are learning valuable lessons. What would
make it even better is if we further examine
our spending habits and reasons why we
tend to live beyond our means. This kind
of introspection is needed if we are to attain
fnancial freedom ourselves and to save our
great country from becoming another great
civilization that was.
To affect positive change we needed an
impetus and we got one, the Subprime
Meltdown, the biggest economic downturn
since the Great Depression (or as I call it,
the 9/11 of the business world). It is here
for a few more years,
but to beneft from it
maximally requires
new knowledge and
applications. Remem-
ber how our lives have
changed since the 9/11?
Well, the business rules
of engagement have
also changed drasti-
cally. Real estate has
taken the biggest blow,
and as usual, our gov-
ernment’s answer to every problem is more
regulation. In contrast, I advocate educa-
tion over regulation. But you can’t fnd
that kind of knowledge in any accessible
or even comprehensible fashion in our bu-
reaucratic system.
To obtain this kind of knowledge required
for prosperity, you need to attend and net-
work in real estate meetings
and seminars. Venues such as
our real estate club, Los Ange-
les Real Estate Investors Club
(LAREIC), will provide you
with the new knowledge on
how the game is being played
now. Once you know what’s
working in today’s market,
you’d be able to further develop your cre-
ativity and capitalize on it more effectively.
Without this new information, you’re lim-
ited to old solutions, which are ineffectual
in our fast-changing world.
I believe there are ways to enhance your
creative powers. Here are a couple of sug-
gestions from two highly successful peo-
Steven Jobs was asked why some people
are more creative than others. He replied,
“Innovation is usually the result of con-
nections of past experience, but if you
have the same experiences as everybody
else, you’re unlikely to look in a different
direction.” For example, in college, Jobs
took modern dance classes to meet women.
What he didn’t realize was how much he
learned about movement and perception
in those classes, which came handy years
by Sam Sadat, founder of Los Angeles Real Estate Investors Club
Socrates once said:
“An unexamined life
is not worth living.”
Realty411Guide.com PAGE 42 • 2010 reWEALTHmag.com
DPW helps investors create wealth through Real Estate Investments. We will show you how to become
a successful investor. We take away all the guess work because real estate investing should be effortless. We
will do everything we can to make sure our investors are taken care of and are educated on the entire process.
Our goal is to make real estate investment easy for the average investor through our various investment programs.
How to Get the
by Kathy Fettke
rying to get
a good deal
in today’s market
can be frustrat-
ing. It might mean
making a hundred
offers before you
get the one that
makes sense. And even if you
have cash and will close “as
is,” you still might lose out.
Or you might end up with the
property and fnd out later you
paid too much or got stuck with
a lemon.
So how are the experienced
investors getting deals with
less effort? At Real Wealth Net-
work, we have found the power
of numbers. Our teams buy in
bulk directly from the bank.
The banks love this because
they can move more property
at once, even if it means slash-
ing prices. In most cases, the
properties never make it to
the open market before we’ve
hand-picked our favorites. It’s
tough for an individual to com-
pete with a bulk purchase.
We also pool funds to pick
up almost-complete subdivi-
sions or multi-family proper-
ties. Again, this is tough for the
Bigger Better
individual investor
because the price tags
are much higher, but
the deals are sweeter.
For example, we just
wrote down a $12.9
million FDIC loan to
$3 million on 27 al-
most-fnished water-front con-
dos in Portland. Investors will
make over 40% in one year.
This is truly the greatest
wealth transfer in history. Op-
portunities abound, and to-
gether we can make it happen.
Mistakes happen when inexpe-
rienced people jump into some-
thing they don’t understand.
That’s why so much wealth has
been lost over the past decade.
You don’t have to go it alone,
learn from the experts.
Real Wealth Network brings
new and experienced investors
together to share information
and learn from each other.
Our site has articles, videos,
blogs, podcasts and downloads
to help educate our members to
make smart investing decisions
during this once-in-a-lifetime
For information, visit:
Owned by Linda Pliagas
Her credentials include:
Landlord since 1994
Licensed Real Estate
Sales Agent since 2000
Out-of-State Landlord
since 2004 - 5 States
Founder & Publisher of
Realty411 since 2007
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alifornia is
one of the
most active
states for
investors. Even during
this current economic
downturn, the state is
still a powerful economy
in the global market. To
meet the demand for in-
vestor education, a new
investment club system
was recently launched
in California by Roger
Ritchie, a Los Angeles-based real estate
investor and frequent club-circuit guest.
The Cerritos Investor Education Club,
founded by Ritchie, however, goes way
beyond the typical real estate club. The
fnancial education training is based on
Alternative Economics™, a personal
system of fnancial growth education. It is
designed to reveal hidden assets and apply
them to alternative investment strategies
using personal money rules that engage
four asset-acceleration principles, through
three fnancial growth stages.
Ritchie, who has regularly attended real
estate clubs for years, chose to align him-
self with the National Strategic Investment
Corporation (NSIC). His new club, the
Cerritos Investor Education Club (CIEC),
is the frst California chapter. Ritchie’s
goal is to form a club with diversifed
investment strategies to provide his mem-
bers with “alternative investment strate-
gies, not just real estate,” he says.
Ritchie has spent a lot of time and
resources in developing his investment
game plan. He is a David Lindahl graduate
and also learns through the Joel Block’s
syndication system. It is at Block’s event
where he met NSIC founder, Steve Het-
tema. Ritchie is also a member of All
Cities Network, a collection of networking
groups. Currently, Ritchie is managing
partner of an investment syndication group
Alternative Economics

Club Launches in CA
Roger Ritchie Leads New Group
that owns a 112-unit apartment
complex in Florida.
Ritchie wholeheartedly
believes in the importance of
diversifcation and says others
feel the same way. “This breadth
of investment strategies attracts a
much larger segment of my com-
munity,” he says. “Being built
around Alternative Economics™,
I am providing applicable eco-
nomic alternatives to help mem-
bers develop their own personal
system of fnancial growth.”
Through monthly meetings, Ritchie says
CIEC will provide educational products
to educate investors about a broad range
of investment vehicles, both locally and
CIEC is now part of what makes up a
growing investor community known as the
National Strategic Investor Group (NSIG),
whose clubs are based on the NSIC club
The NSIC is a company teaching invest-
ment and economic alternatives.
In addition to its readily applicable
fnancial education, NSIC provides
resources, products, services and oppor-
tunities through local and virtual investor
Ritchie is excited about CIEC’s launch
and he credits Hettema’s offce with
providing him with the tools needed for an
association to succeed.
“ Not only does NSIC provide me with
all the resources to start and manage
my club, but the NSIC model shows me
exactly how to successfully establish my
club step by step.”
To learn more about NSIC, visit online
www.ciec.nsicgroup.com and download
the free Alternative Economics™ e-book.
For information about CIEC, contact:
Roger Ritchie, Club Leader of the Cerritos
Investor Education Club, (714) 793-3167,
by Linda Pliagas
Sales and Referrals since 2006
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Realty411Guide.com PAGE 46 • 2010 reWEALTHmag.com
Alternative Economics

Club Launches in CA
They pay no expenses. If they
fnance the house for example
at 5.5% or 6%, you’re going to
get that spread using the bank’s
money. If you buy a house for
$60,000 and you put down
20%, $12,000 on the $48,000
you’re borrowing, you’re going
to make 3.5% but that’s not us-
ing any of your money. You’re
not making 3.5%; you’re mak-
ing an infnite return. It’s the
bank’s money. Now you’re go-
ing to get 9.1% on the balance,
for a total return of 17%.”
Obviously, a lot of planning
went into Julian’s investing
modes. His personal experi-
ence as an investor started in
1975, and he’s been a real es-
tate broker since 1979. Born in
New York City, he moved to
Dayton with his parents while
he was in high school. He later
attended Wright State Univer-
sity. Julian has been married
for 36 years. His wife is a re-
tired public librarian who still
substitutes when needed. They
have one son, Paul, who is 26
and is trained as a chemical en-
“But guess what?” Julian
asks, and proudly replies: “He’s
working for us now as an op-
eration’s manager. It’s a family
News about Julian’s NNN
model has spread quickly large-
ly through referrals and online
connections. “We have a blog,
we do webinars, we do confer-
ences just like your magazine.”
Now that Julian has estab-
lished his NNN presence in
the investment market, his new
goal is to expand conserva-
tively. He explains: “We want
to grow fscally responsibly.
This year we’d like to do about
120 houses, about 10 a month.
We’re not quite at that target
but we’re real close. It’s grow-
ing in the right direction. Next
year we’d like to do 150 to 160
As they continue to grow
and prosper, Julian expressed
his thoughts about expand-
ing to other locations or cities.
“In another year or so we plan
to move to Cincinnati, which
would be the logical city. It is
about 50 miles south of us with
similar demographics.”
In real estate investing, slow
and steady wins the race, and
Triple Net Houses would win
the Innovative Risk Reduction
Award if they were to establish
one in our industry.
For more information, please
visit ww.TripleNetHouses.com
“This year we’d like to do about
120 houses, about 10 a month.”
Triple Net Houses, pg. 9
Realty411Guide.com PAGE 47 • 2010 reWEALTHmag.com
any Investors gamble
their fnancial future
and retirement dreams
on capital appreciation.
Michael Woo, chairman
of Longfn Investment Solutions, thinks
that is unwise. “It’s time to get paid month-
ly instead of gambling on a 20-year pay
out,” he says.
As chairman of Longfn Investment Solu-
tions (LFI), Woo created a turn-key invest-
ment system for investors who seek cash
fow in emerging markets. “Our properties
are totally rehabbed, with existing property
management, and often
already have renters in
place,” Woo says. “Our
average NOI (Net Op-
erating Income) rate of
return is between 25%
to 36% ROI (Return
on Investment) with
10% to 12% cap rates.
Why wait for tomor-
row when you can cash
fow today?”
An avid fsherman,
Woo, who is a native
of Southern California
and graduated from Torrance High School
and San Diego State University, named the
company Longfn to commemorate a fsh-
erman’s special name for the albacore.
“Albacores are renowned by sportsmen all
over. They are a much sought-after game
fsh with attributes of being fast-moving
hunters that operate together to achieve
goals,” he explains.
Woo’s individualism also positively im-
pacts his investment philosophy.
For example, while many investment bro-
kerages only deal with one specifc type
of property, such as single-family homes,
Woo’s investment strategy is to fnd deals
across the entire market spectrum.
Instead of letting headlines predict where
to invest, Woo says he bases his compa-
ny’s approach on solid, factual data. “Our
team constantly seeks out markets that
can weather the storm based on strong job
growth and economic or population expan-
Woo began his career as a real estate
investor in 1995. Before eBay was ever in
the picture, Woo sold and marketed collect-
ible toys as a way to raise capital for his
frst investment. In two years, Woo raised
$50,000, a down payment for his very frst
property. Since then, Woo has been in-
volved in hundreds of transactions.
His skills in
the industry did
not go unnoticed.
In February, Woo
was honored as
the recipient of
Rich Dad edu-
cation’s Hall of
Fa me Awa r d,
p r e s e n t e d b y
“Rich Dad Poor
Da d ” a u t h o r
Robert Kiyosaki.
Woo was hon-
ored for his role
in increasing fnancial intelligence. In ad-
dition, he was acknowledged for dedicat-
ing his time to helping others improve their
own lives.
“We teach real estate investing funda-
mentals, including having the right mind-
set and goals,” Woo explains. “We want to
make each investor a better person and ex-
tend their investment dreams further than
they could have ever imagined.”
In addition, Woo says they teach inves-
tors to understand demographics, locations,
cash fow and ROI.
Recently, Woo expanded LFI and added
a dynamic partner: Erica Reynolds. She
has been appointed as vice president and
marketing partner. Additionally, she is also
the CEO of ER Real Estate Investments.
Reynolds purchased her frst rental at age
24 for $10,000 cash. Since then, she has
been involved in numerous transactions
and she is also currently an out-of-state in-
vestor. Reynolds enjoys assisting others in
also maximizing their potential through the
purchase of passive income real estate.
“My core belief is that real estate creates
wealth, and wealth is effectively amassed
through real estate acquisitions,” she says.
Both Woo and Reynolds have great na-
tional resources accumulated from years of
personal relationships, which they pass on
to their clients. They also have established
relationships with private equity lenders
for fnancing. “Lending is not a problem
for LFI and we do not want fnancing to be
the reason you do not take action toward
investing,” says Woo.
LFI also created an affliate marketing
partner program, which offers proft shar-
R e y n o l d s e x -
pl ai ns , “Bei ng a
marketing partner is
a great way to join
the team and partici-
pate on many great
deals. As a market-
ing partner, we offer
great referral fees,
equity partnerships
and other benefts.”
Lately, Woo and Reynolds have been
busier than ever attending many network-
ing events and also hosting their “Stop
the Gambling” seminars for the public in
Southern and Northern California. LFI is
also organizing investment road trips to In-
dianapolis, one of their target markets.

To learn about the “Stop the Gambling”
educational seminars, contact Longfin
Investment Solutions at: (949) 388-0678.
Visit LFI at: www.longfninvestments.com
Stop The Gambling!
Mike Woo with “Rich Dad, Poor Dad”
founders, Robert and Kim Kiyosaki
Erica Reynolds
by Lori Peebles
Why Bet on Future Appreciaton When You Can CASH FLOW Today?
Realty411Guide.com PAGE 51 • 2010 reWEALTHmag.com
omeowner s al l
across the U.S. are
feeling stressed
out due to a decline in the
value of their homes and
the fact that they now owe
the bank more than their
property is worth. However,
there is hope through an option
known as short pay refnance,
which is a great solution for
them, if they qualify.
According to a report pub-
lished in May 2010 by First
American CoreLogic, a real es-
tate information company based
in Santa Ana, Calif., “more than
11.2 million, or 24% of all resi-
dential properties with mort-
gages were in negative equity
at the end of the frst quarter
of 2010.” Out of that number,
in California alone, more than
2.4 million homes, or one third
of all mortgages, have negative
The underwater mortgages
and negative equity pose a
roadblock to a housing recov-
ery because the underwater
mortgages are more likely to
fall into default leading to a po-
tential foreclosure by the bank.
Most banks have already been
taking big losses on foreclosure
and short sale properties and
are considering other options
as well.
Short Pay Access, a company
based in San Ramon, Calif.,
is able to help homeowners
anywhere in the U.S. through
the best short pay refnance
program available today. The
company does not charge any
up-front fees to homeowners. It
offers a solution for both banks
as well as for the homeowners.
The homeowners get to keep
their home with a lower princi-
pal balance and lower monthly
mortgage payments more in
line with the current value of
their home, and the banks get a
chance to “clean-up” their bal-
ance sheet by getting a property
completely off their books.
Banks are becoming more
willing to accept a short pay
refnance especially if the bor-
rower is current on their mort-
gage but is experiencing some
type of short-term fnancial
diffculty or the interest rate on
the borrower’s current loan is
about to increase.
A short pay refnance also
provides the bank with an infu-
sion of “cash,” which increases
their ability to invest in other
opportunities or to lend out.
Banks are in the “lending”
business and not the real estate
Unlike a loan modifcation or
a short sale, which sometimes
requires a borrower to be delin-
quent on their mortgage pay-
ments, the short pay refnance
program follows standard lend-
ing guidelines and only works if
the borrower has a clean recent
mortgage payment history.
by Shahid Habib and Ketan Naran
Short Pay
The Solution for Homeowners who
have Underwater Mortgages
Shahid Ketan
Let us help you
'Short Pay Refinance'
a new option with
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(This is not a loan modification or a short sale)
It could help you to
Keep your home
Lower your principal balance
Lower your monthly payment
Eliminate Negative Equity
Short Pay Access www. .com
Do You Feel
Trapped by Your
Current Mortgage
and the Loss of
Your Home's Value?
Contact us today to
find out if you qualify
1. The mortgage needs to be
more than the current market
value of the home.
2. Borrowers need to be current
on their mortgage – no late pay-
3. The borrower’s credit score
must be 620 or better.
4. They must have verifable
5. The prop-
erty must be
the borrower’s
primary resi-
Short Pay
Access works
with the lender
in order to complete the short
pay refnance and gets the lend-
er to write off a portion of the
loan amount. A short pay ref-
nance gives homeowners the
ability to refnance their homes
at the fair market value. The
process involves paying off the
current lenders loan at fair mar-
ket value and then refnancing
their home with a new lender at
the current market value.
The Short Pay Access team
consists of experienced nego-
tiators who have carefully built
working relationships with
lenders. The negotiating team
is well versed in the lender’s
requirements and preferences
and uses this experience to help
the homeowner without wast-
ing any time dealing with un-
For more information, contact
Short Pay Access online at
www.ShortPayAccess.com or
call (925) 309-6109 for a no
obligation free consultation.

ket to lawyers who specialize
in family law, estate planning
and probate. Also, don’t over-
look paralegals who can be a
wonderful source of leads.
#3: Your Target Zone: For
maximum success, farm your
area just as a REALTOR
would. Posting signs around
your farm area, as well as
displaying a clever advertise-
ment on your vehicle can lead
to success.
#2: Make Many, Many Offers!
An aggressive investor should
be making at least 10 offers a
day or 200 offers per month.
How do you compare? Well,
then please don’t complain
that you can’t land a deal!
Realty411Guide.com PAGE 53 • 2010 reWEALTHmag.com
by Linda Pliagas & Lori Peebles
Before you purchase
that shiny, new luxury
vehicle — the one that’s going to plum-
met in value as soon as it’s driven off the
lot — think about buying a rental income
property instead.
That’s right, for about the same price tag
as a 2010 Mercedes-Benz M-Class (MSRP:
$45,700), an investor can purchase a rental
property in Memphis, Tenn, instead. Plus,
they can pay it off completely in fve years
— the same time as the car.
This turbocharged investing structure,
coined the Short Term Retirement pro-
gram, is marketed by Jim Reedy, CEO of
Memphis Investment Properties, LLC, a
full service real estate investment broker-
age and management company.
Memphis Investment Properties (www.
memphisinvestmentproperties.net), found-
ed in 1985 by Reedy and his wife, Debi,
is an exclusive provider for the Short Term
Retirement (STR) program in the Memphis
metro area.
Th e mo s t
ent i ci ng as-
pect of STR
is the speed
in which an
investor can
h a v e t h e i r
r ent al com-
pletely paid
o f f , wh i c h
t he n ma xi -
mi z e s c a s h
f l ow. Thei r
program also offers tremendous fexibility,
enabling people who normally would not
be able to qualify for a property a chance
to build wealth by owning rentals. Tradi-
tional roadblocks, such
as the number of existing
mortgages one has, or a
lack of seasoned funds
or less-than-stellar credit
scores are simply non-
issues with their private
fnancing program.
So what’s the catch? A larger-than-normal
downpayment for a residential purchase is
required (30% to
50%), which is ac-
tually a percentage
that is common these
days in commercial
real estate transac-
tions. The property
is then paid off in 60
months (amortized
in seven years). In
the meantime, in-
vestors can expect a
bit of monthly cash
fow to help them maintain the property.
It’s a bullish investing program offering
easy terms and, best of all, no restrictions.
When Reedy found out about the pro-
gram, which was developed by Robert
Feol, a local real estate fnance expert, he
knew he wanted his company to have ex-
clusivity. Reedy says the program was so
good, he wanted to keep it all to himself.
Real estate has been Reedy’s passion and
focus for 34 years. He majored
in real estate at the University
of Memphis and has been sell-
ing homes since his senior
“I fell in love with real estate
during college,” he admits.
“The sky was the limit.”
Reedy says that from per-
sonal experience he knows
investing in real estate is more
lucrative than working as a
. His family cur-
rently own and manage an
impressive personal portfolio of more than
300 single family rentals.
Because Reedy and his team are active
real estate investors, servicing hundreds of
investors annually, he says they can deliver
properties at deep discounts.
Additionally, since Reedy knows that
cash fow and built-in equity at purchase are
primary components of a great investment,
he says they “are willing to leave enough
proft in the deal for the client to have great
cash fow and success, which leads to re-
turning clients and more business.”
To handle the management of his own
rentals, as well as
t he bur geoni ng
empire of his cli-
ents, which now
number close to
1,000 properties,
Reedy relies on his
staff of 15, which
includes four full-
time leasing agents
a n d n u me r o u s
independent con-
In 2008, Craig Jennings was recruited
to handle investor relations. Jennings es-
tablished himself with Reedy as a talented
wholesaler, often providing Reedy with
outstanding deals for his clients.
Shortly after, the team was joined by Curt
Davis, who is now a leading sales execu-
tive for the company. Together they feld
requests and answer questions from in-
vestors around the nation, and even from
around the globe.
When asked where the majority of Mem-
phis Investment Properties’ clients come
from, Reedy quickly replies that most of
their investors come from the West Coast,
California in particular. The East Coast also
brings in a lot of activity. Tennessee is also
gaining popularity with investors living
outside of the United States, as well as with
recent U.S. immigrants. Reedy says lately
he is seeing “lots of foreign activity.”
For Reedy and his team, real estate in-
vesting is not just a business, it’s a lifestyle.
In fact, his wife, Debi, is chief operation
offcer, and one of Reedy’s fve children
is also a top producer in her market in the
Continued on pg. 62
The team relaxes after a meeting.
Craig Jennings and Jim Reedy.
Realty411Guide.com PAGE 55 • 2010 reWEALTHmag.com
hese days with the current economic
and credit crisis, it’s not what you
know, it’s who you know. 360 In-
vestments™ realizes that investing in real
estate is a team sport. That’s why we have
built local power teams in major cities
across the country. Having the right indus-
try professionals on your team will make
all the difference in your investing success.
Here is a list of important team members to
have on board:
•Get a mentor, with a proven track record,
who has successfully acquired the type of
real estate investments you want to have.
Your local real estate investment associa-
tion, abbreviated as REIA, may be a good
place to fnd a mentor. Make sure you con-
tribute to your mentor if you are not pay-
ing for their time to teach you and take you
under their wing.
who can give you in-
formation about the local market.
can provide you with
comparable sales (COMPS), current mar-
ket values, average days on market (DOM),
appreciation/depreciation rates, and other
valuable information. Provide leads to your
by sending potential clients
their way and make sure they receive their
well-earned commission.
•A mortgage professional is essential. They
can be a direct lender, bank or mortgage
broker. Shop around until you fnd one who
can tackle creative ways to fnance a deal.
Ask about their loan fees and programs.
It’s critical to fnd out about their qualif-
cations, seasoning and percentage-down
These professionals can also lead you to
private and hard money sources. Always
ask for a Good Faith Estimate (GFE) and
compare statements. Find out their average
time to fund and close a deal since time is
•The right title, escrow or
closing attorney, depending
on the state, is your best
friend. Interview several
until you fnd one that un-
derstands unconventional
ways to transact real estate
deals. Ask them if they are
familiar with assignments,
double or simultaneous
closings. You want some-
one who can draft up notes,
deeds of trust or mortgages.
Title representatives can
also provide you with ac-
cess to title reports, foreclo-
sure listings, and farming
packages made up of mail-
ing lists and labels for mar-
keting purposes.
•You will need several at-
torneys on board, who specialize in differ-
ent areas. Engage an asset protection at-
torney who understands entity formation, a
local real estate transactional attorney who
can review your contracts, and an estate
planning attorney to pass your inheritance
on to your heirs without costly and time-
consuming probate proceedings.
•Real estate investments offer huge tax
benefts. It is important to get a highly
qualifed tax professional, a certifed pub-
lic accountant (CPA), or a tax attorney who
understands the tax codes. Choose a pro-
fessional who also invests in real estate.
They will know the maximum deductions
available to your type of business.
•Get an insurance agent who will issue your
policies for the best protective coverage in
the state where you own real estate at the
best prices. Always compare rates.
•A reliable general contractor will give
you work estimates and project bids. These
quotes are tools with great negotiating
power. Request a copy of their license and
check with the state board to make sure the
contractor is in good standing. Get plenty
of references and do not pay in advance.
•Locate a certifed property inspector who
will inspect your properties and provide a
detailed inspection report and photographs
of their fndings. The report can be used for
negotiating the purchase price. It can also
be used as a walk-away clause.
•Appraisers are priceless in this current
market. They provide market values, com-
parable sales, and draft up appraisal reports
on their fndings. Please note, with the new
HVCC guidelines, lenders choose their
own appraisers when determining value for
lending purposes.
•Property managers and management com-
panies are the key to long-term investing
success. Make sure to get lots of referenc-
es from other property owners. Review the
property management agreement carefully
and make sure you understand everything
clearly. Find out the management fee, ad-
vertising costs, service call fees, average
turn-over costs, vacancy rates, eviction
rates, total number of units managed, num-
ber of years in business, term of agreement,
monthly statement schedule, online system
accessibility, and direct deposit options.
Always retain copies of lease agreements
with tenants. It’s your job to manage the
property manager!
•Last, but certainly not least, get an ac-
countability partner and a local network of
investors who will provide you with ongo-
ing support and updated information on
other industry professionals, the markets,
and other investment opportunities.
Building a proftable real estate invest-
ment portfolio takes a strong team, and
more importantly, a great team leader who
selects the right team members!
by Crystal Han of 360 Investments™ | edited by Scott C. Seckel
Who’s On Your Team?
Realty411Guide.com PAGE 57 • 2010 reWEALTHmag.com
August 4, 2010
6:30 to 8:30 pm
Pasadena Library
285 E. Walnut St.
Pasadena, CA 91101
August 5, 2010
6:00 to 8:00 pm
Torrance Library
3301 Torrance Blvd.
Torrance, CA 90503
August 10, 2010
5:30 to 7:30 pm
Angela Iacobini
4900 Clark Ave.
CA 90712
August 24, 2010
6:00 to 8:00 pm
Valencia Library
23743 West
Valencia Blvd.
Valencia, CA 91355
August 25, 2010
6:30 to 9:00 pm
LA Real Estate
Investors Club
Beverly Hills
Country Club
3084 Motor Ave.
Los Angeles,
CA 90064
The Ultimate Cash Flow Buying Tour, pg. 37
Don’t Miss the Next Tour

September 24 & 25
Space is Limited, Reserve Early
1-877-773-9998 or 1-901-751-7191
or http://www.MemphisInvest.com
Realty411Guide.com PAGE 58 • 2010 reWEALTHmag.com
The Clothiers discussed their own per-
sonal story of their quest for passive income
and presented their research on the market.
Then they introduced the members of their
team. After a brief networking break, they
passed out a large, white sealed envelope
with the information everyone was waiting
for: The Deals.
Guests were more than
eager and ready to buy a
cash fow property based
on an address, a photo-
graph and numbers. Most
rental homes cash fowed
about $350 monthly.
The elegant banquet room where the
education took place was flled with many
Californians like me, including a young
couple from Burbank who rented a rec-
reational vehicle and drove nearly 2,000
miles to buy a property in Memphis.
“We left on the Fourth of
July and plan on touring dif-
ferent cities for two weeks
after this,” Declan and Shaun
Hoare said. The new investors
purchased a three-bedroom,
two-bath brick home on the
Guests listen to Kent Sr.
very frst day of the tour.
Kent Sr.’s luring promise that I would
never see anything quite like this proved to
be true. The action that was taken on that
day was mind-blowing. A total of 29 homes
were sold, all sight unseen. I was captivated
by the volume of deals done as well as the
strategies they spoke about, such as their
guerilla-marketing leasing system.
Here is the creative way they fll vacan-
cies: MemphisInvest.com hires multiple
leasing agents on commission to show and
rent out their client’s property. A total of
four signs are placed on the lawn, each with
a different number, each reaching a distinct
agent. Competition is created. Each leasing
agent is on high alert: If they want to get
paid, they have to be the frst to answer the
phone and show the property.
Another management technique that re-
ally stood out is the system they have of
calling their clients just to touch base. Once
a month, investors receive a status report,
even if there is nothing wrong with the
“If a client has to call us to check on their
property, then we are not doing our job,”
Chris explained to the audience.
Our group saw their four-sign leasing
system on the second day of the tour. On
that day, we hit the road on two buses and
saw numerous sample properties.
We saw houses in all states of renovation,
from the stinky and messy to the shiny and
fresh. The rehabbed homes featured hard-
wood foors, soothing earth-tone colors,
new tile and new countertops. The quality
of their remodel is a testament to Kent Sr.’s
perfectionism and attention to detail.
After attending the tour, it became clear
that I was in the middle of one of the best
investing markets in the country, and in the
presence of industry leaders. If your goal is
to purchase a quality rental in a burgeoning
market and have it managed by a proactive
and creative team, then be sure to pencil in
the next The Ultimate Cash Flow Buying
Tour on your calendar.
6601 Owens Drive, Suite 245
Pleasanton, CA 94588
Tel: 925-460-8255
Short Sales
Agreement for Deeds
Lease Options
“Obstacles are the things we
see when we take our eyes o
our goals.” -Zig Ziglar
More recently, an out-of-town owner of
a vacant home began to receive citations
from the city due to the blighted condition
of a property she owned. The woman no
longer had a need for the home, which had
been broken into and vandalized. Instead
of having to pay additional fnes or incur
a large expense to fx the abandoned prop-
erty, she opted to sell “as-is” to Sensei at a
45% discount, and Sensei fipped the prop-
erty using a double-close technique to a
rehabber. Sensei used no money, no credit
and no loans, just pure wholesaling.
Yes, a proft (typically larger than most
real estate transactions) will be made for
wholesaling a property as it should be. An
investor is providing a creative solution to
the owner of a distressed property and/or
the owner may be distressed. Having a dis-
tressed situation creates an opportunity for
the investor to help and proft as well.
Sensei reminds his devotees that in to-
day’s fooded foreclosure market, whole-
saling is a service that is needed more than
ever. Sensei’s mindset of placing people
before proft is the philosophy he carries
with him when he approaches any deal and
in his own dealings with people.
“Help frst,” he stresses, adding, “You
will be blessed with rewards later.”
“does not require
cash, credit or a
license, which
equals NO RISK.”
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Serving Companies Since 2007
A Visit to 12 Rounds, pg. 30 Secrets from Sensei, pg. 30
#4: Attorneys and Paralegals: Be
sure to market to lawyers who spe-
cialize in family law, estate planning
and probate. Also, don’t overlook
paralegals who can be a wonderful
source of leads.
#3: Your Target Zone: For maximum
success, farm your area just as a
would. Posting signs
around your farm area, as well as
displaying a clever advertisement on
your vehicle, can lead to success.
#2: Make Many, Many Offers! An ag-
gressive investor should be making
at least 10 offers a day or 200 offers
per month. How do you compare?
#1: Piggyback Your Deals: Don’t be
afraid to partner up and share your
deals with other wholesalers. The
more wholesalers in your database,
the easier it is to share buyers and
sellers. Don’t be greedy and dishon-
est. Remember: Your reputation is
more important than money. Once
tarnished, it seldom can be restored.
Realty411Guide.com PAGE 59 • 2010 reWEALTHmag.com
Keep the Flame Burning!
Log On to Realty411’s VIP Network
FREE to Join * LIVE Chat Available
Find Events, Deals, Friends & MORE
Questions? Call: 310.499.9545
them deals). I learned what they were look-
ing for in a property. And whenever I found
something in common among investors, I
knew I was on my way to developing a sys-
tem for creating wealth with real estate.
My frst building was small three-unit
fat. But it was a “proft snowball” that put
everything in motion and would lead to an
avalanche of income.
Within six months I had nine proper-
ties. At the end of my frst year, I owned
11 small apartment buildings, giving me a
positive cash fow of $9,700 per month. I
was motivated!
Millionaires Are Not Landlords
It surprises some people when I say that
my key to moving into the major leagues of
real estate investing — what skyrocketed
me from owning just a handful of small
buildings to controlling more than 300
properties — was my decision not to be a
landlord. I would do no “hands-on” work.
Knowing how to invest in apartments
without personally dealing with tenants is
essential to becoming a multimillionaire
I never deal with tenants personally. I
never personally fx leaky faucets. I don’t
mow lawns. I turn all the landlord duties
over to management companies. A good
management company makes you money
and should be viewed as an income genera-
tor, not as an expense.
Today I control over 7,400 units. That’s
7,400 checks from tenants. My monthly
cash fow is greater than what many people
make in a lifetime.
But I almost never got started because
of a few misconceptions that most newbie
investors face.
4 Misconceptions That Can
Cost You Millions
Some notions about investing in apart-
ments are as outdated and fat-out wrong as
thinking the world is fat. Yet they continue
to hang on and stop thousands of investors
from taking advantage of the huge money-
making potential that apartments hold.
Misconception #1: Small investors
should start with single family homes be-
cause there’s less risk.
Apartments can be the safer way to get
started. If your tenant moves out of a single
family house, your property sits empty. The
mortgage isn’t going to stop until you fnd
another tenant. However, if a tenant moves
out of an apartment complex, the income
continues to fow from other units.
Misconception #2: Apartments are more
diffcult and time-consuming than single-
family houses.
Think of it this way… does buying a
Porsche take exceedingly longer than buy-
ing a Kia? No. It’s the same basic process.
With apartments, you use largely the same
methods as with single-family homes. And
where there are differences, I’ve developed
systems that clearly spell out what needs to
be done and when.
Misconception #3: You need stellar per-
sonal credit and high income to buy apart-
David Lindahl, pg. 7
ment houses.
When you buy apartment
houses, lenders focus on the
cash fow of the building, not
your personal income stream.
If you fnd a building with a
strong positive cash fow, a
building that pays off the loan
without relying on you, then
you have a the foundation of vi-
able deal. The math is not com-
plicated. I’ve created a work-
sheet that lets me know within
seven minutes if a property is a
viable investment — so simple
a ffth grader can do it.
Misconception #4: Investing
in apartments means dealing
with tenants.
It has been years since I
spoke with any tenant. But
you don’t want to replace one
headache (dealing with tenants)
with another headache (dealing
with ineffective management
companies). So I created a pro-
cess that allows me to “manage
the manager” effectively and
Strong Systems Make
Strong Investors
Only take advice on invest-
ing in apartments from some-
one who is making millions
of dollars practicing what they
preach. I buy apartments al-
most every month. My systems
are proven to build, protect,
and ensure wealth — and I’ve
grouped them in a one-stop
program called Apartment
House Riches.
I’ve made it simple for al-
most anyone to use my strat-
egies to fnd properties and
structure wildly lucrative deals.
You have a roadmap for mak-
ing buckets of money in today’s
market just as I do.
Apartment House Riches
In your community right now
there are apartment buildings
rich in income potential. My
Apartment House Riches pro-
gram shows you how to fnd
them. It gives you proven strat-
egies for making money hand
over fst.
To preview this exclusive
program visit www.rementor.
Dave Lindahl is the author of
several top-selling books in-
cluding “Commercial Real
Estate Investing 101,” written
with Donald Trump. For more
information on his authorita-
tive master course, Apartment
House Riches, please visit:
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•Takes the guess
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•Supports up to 20 financial optons
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•Projects the Afer Repair Value of a property
based on size, locaton, and rehab work
Whereas the majority of
banking institutions sell their
notes, the company typically
holds all of their notes until
MMG Capital prides itself
on doing business differently.
However, Gleason says the cost
of their private money is com-
parable to that of most other
private money lenders.
Nowadays, investors can
expect a total cost for a loan
to be in the neighborhood of
anywhere from 15% to 20%
per annum, that includes the
cost of interest and fees. Most
of our terms are between 12
and 36 months.
With their fexible lending
practices, based on the under-
writing decisions of real people
not computers, MMG Capital
is weathering the storm that has
slammed America’s real estate
sector, unleashing a tsunami of
bad debt. In fact, the California
company has grown stronger
during this turbulent season.
For more information about
MMG Capital, LLC, visit their
two websites: For borrowers:
www.mmgcap.com; Investors:
Realty411Guide.com PAGE 61 • 2010 reWEALTHmag.com
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state of Georgia. Reedy and his wife have
been married for more than 30 years and
are both native Memphians.
They say they’re fortunate to live and in-
vest in Memphis for several reasons: “We
have low price points and high rents per
square feet. We are a slow-growth city, we
don’t have major swings in the local econ-
Historically a trading center for cotton
and hardwood, Memphis is now headquar-
ters for major manufacturing, services and
other business sectors. The city is home to
three Fortune 500 company headquarters:
FedEx, AutoZone and International Paper.
Memphis’s economy is diverse. The area
services include: banking and fnance (First
Tennessee, National Commerce Bancorp,
Union Planters); real estate (Belz Enter-
prises, Boyle Investment Co., and Weston
Co.); nonprofts, including the world’s
largest waterfowl and wetlands conserva-
tion organization (Ducks Unlimited); and
a restaurant chain (Backyard Burgers).
Science and technology are strong local
industries too. Memphis is also considered
a Mid-South retail center and an attractive
tourist destination.
With so many positive attributes, Mem-
phis is defnitely commanding the attention
of investors around the world.
So now that the word is out about the Short
Term Retirement (STR) program, don’t be
surprised if you see more investors hold-
ing on to their older used car a little while
longer so they can buy a rental property in
Memphis instead.
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