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Print • Online • Network | 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!
Look Inside

FREE Celebrating the Largest

Wealth Issue with More Pages &
Reports! Opportunities than Ever!

photo by Sam Green

<< Table of Contents >>
7 Secrets from the Master! Charity Walk and Gala
Dave Lindahl shares his latest 37 Join the Ultimate Bus Tour
tips for Investing Success with
9 No Drama in Dayton 39  Creative Financing Options
Triple Net Houses Helps with MMG Capital, LLC
Investors Profit without Issues 40 Philbin Capital Discovers
11 California Living with Deals in the Golden State
Tennessee Cash Flow 42 The Key to Success by Club
Mathew Owens, CPA, owner of Founder Sam Sadat
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

photo: Sam Green

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
In search of their latest gem in Dad” protégé, advises clients
Nicaragua, Maverick Investor 52 Is Your Mortgage Underwa-
Group traveled the world ter? Perhaps a Short Pay Refi-
22 Investor Nation Shares their nance is the Answer
Blue-Chip Real Estate Strategy 55 Pay Off Your Rental House
2 5   G i n g e r   M a c i a ’s   T h r e e in Five Years with the Short
FREE Ways to find a Great Term Retirement Program
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 57 Who’s On Your Team?
“I Survived Real Estate 2010” Insights by 360 Investments
Platinum Partners
A Powerhouse Lineup of Top Industry Experts Presents
the Insider’s Edge on The State of REO 2010
The Norris Group’s award-winning event returns September 17, 2010 to the Nixon Library in Yorba
Linda, California. We’re assembling an incredible line up of accomplished industry specialists to
discuss the state of the REO market, on-going industry regulations, and the opportunities emerging
for real estate professionals.

New guidelines affect every sector of our industry. In a climate ripe for both miscalculation and
profitable advances, how are our colleagues and partners navigating an industry in continued
transition? Our Who’s Who Round Table Includes:

Bruce Norris Joseph Magdziarz Tommy Williams Christopher Thornberg

President Vice President 2008 President Principal
The Norris Group Appraisal Institute National Auctioneers Beacon Economics

Sean O’Toole Sarah Letts Daniel Phelan Peter Wayman

President Director, Credit Loss Mgmt Mortgage Bankers Sr. REO Director
Foreclosure Radar Fannie Mae Association Freddie Mac

Last year, I Survived Real Estate 2009 focused on the dramatic shifts in regulation facing our industry. This year, our
panel separates fact from fiction as we delve into the health and sustainability of the current real estate market and the
opportunities that lie ahead for hungry real estate professionals.

To find out how you can participate as an individual or potential sponsor, see the back of this flyer or visit ISurvived2010.
com for more information. Seating to this formal dinner event is limited, so go to the website or call our office today.

Thanks you to all our Platinum and Gold Sponsors and friends for making this unique event a possibility. or 951-780-5856
Gold Sponsors
Benton Group Investors Association (NSDREI)
Delmae Properties Personal Real Estate Investor
Elite Auctions Magazine
Entrust Mike Cantu
Inland Empire Investors Forum Realty 411 Magazine
Keystone CPA Rick & LeeAnne Rossiter
Las Brisas Escrow Starz Photography
Leivas Financial Services Tony Alvarez –
North San Diego Real Estate Westin South Coast Plaza
Winner of seven communication, outreach, and fundraising awards.

We can’t do this without your help! Businesses or individuals who are interested in
participating have two options:

1. SPONSOR the “I Survived Real Estate” Komen Breast Cancer Walking

Team in exchange for a seat (or table) at the event
2. JOIN the “I Survived Real Estate” Komen Walking Team and raise
money in your network for the walk in Newport Beach September
26th. Every $200 gets you one seat to the event (while seats remain).

All donations are made directly to our Susan G. Komen Breast Cancer Walk Team so
100% of the proceeds go to the Orange County Affiliate of Susan G. Komen for the

This formal dinner event includes visitation to the Nixon Museum, appetizers, 3 course
meal, and the live event. Additional benefits are listed below for those that become
platinum and gold sponsors (Please note all funds must be in place July 10th for gold
and platinum sponsors to take advantage of initial radio spots).

Single Gold Platinum

Cost $200 $2,000 $5,000+
Tables (Seats) Received (1) Seat 1 (10) 2 (20)
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Call Diana Barlet at 951-780-5856 or visit for more information and preferred seating.
Note: All donations must be made through the “I Survived Real Estate 2010” walk team to be eligible
for advertising. July 10th 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.
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published for Investors by Investors

by Dave Lindahl

Realty411 s a successful real estate inves-

tor and top-selling author, I’m
Real Estate 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
Linda Pliagas
born rich or had a wealthy mentor show you the inside track to making money.
EDITORIAL STAFF That’s not my story. Not by a long shot.
Lori Peebles Fifteen years ago, I was running my own
Matt Malouf small landscaping business in New Eng-
Carla Fischer
Ginger Macias
land. I was a guy with a pickup truck and
COPY EDITOR lawn mower. If you haven’t experienced a
Lorie L. West New England winter, let me simply say it

Who Else Wants Up to

Sam Green
John DeCindis

$5,000…$10,000 or More
Dave Lindahl
Charles Salisbury

Extra Monthly Cash Flow?

Kelly Global Marketing
Lawrence Ruano means I was literally frozen out of work for What You Need to Succeed
ruanoinvestments@gmail a good part of the year. First and foremost, to succeed as a real
I spent winters doing odd jobs to scrape estate investor you must be motivated. This
Lori and Mike Hampton by. A friend asked if I wanted to repair a business isn’t for the undecided. You have
Emma Krull - The Dab Hand property that needed some TLC so it could to want it bad enough to take action. Be-
CALIFORNIA DISTRIBUTION be resold fast. cause where there’s a strong will, there’s
Professional Distribution Solutions The owner was looking for a quick fix wealth.
and flip, and thus I was indoctrinated in the I was 100% determined to own real es-
KJ Banks: 805.377.6328 business of flipping properties before it be- tate. I didn’t let the fact that I had a less
PUBLISHED BY came a national pastime and the subject of than $800 in the bank stop me from buying
Manifest Media Partners cable TV shows. But what attracted me to my first property, a three-unit building in
Nikolaos K. Pliagas - Chairman real estate was not the quick turn. It was the my hometown.
Our Mission is to Educate & Inspire
steady cash flow. Sure, I was nervous doing that first deal.
INFO/FAX: 310.499.9545 | The idea of checks from renters filling I had no direct experience. No track record.
Main email: my mailbox month after month, regardless No personal wealth to use for collateral.
Realty411 and Real Estate Wealth magazines are published in Los of the weather, really appealed to me. But I didn’t let any of that stop me.
Angeles by Manifest Media Partners (mailing address: 4221 Neo-
sho Ave., Los Angeles, CA 90066). Publishers are not responsible I wanted other people to pay my mort- This is why I tell beginners everywhere
for unsolicited manuscripts, photographs and/or other materials. gages, creating huge equity in my build- that they can own real estate right now.
©Copyright 2010. All Rights Reserved. Reproduction without per-
mission is strictly prohibited. The opinions expressed by writers ings. I wanted to sit back and watch my I don’t care if you’re broke like I was. If
are not endorsed by the publishers and/or editorial staff. Before buildings appreciate, making me wealthier you’re motivated to succeed, real estate —
investing in real estate, seek the advisement of a trusted financial
adviser, attorney or tax consultant. Please invest responsibly. and wealthier. and all the personal wealth it can generate
PRINTED IN THE USA. GOD BLESS AMERICA I wanted to live off the positive cash flow — can be yours once you know how to find
Connect to our network @ that I received each month, so I wouldn’t properties and structure the deal.
have to go to a job every day. No more dai-
ly grind. No more living paycheck to pay- How I Found My First Building
check. Best of all, I liked that “millionaire” I bought books and tapes on real estate,
was the likely outcome if I did it right. even though I didn’t find much on apart-
Back then there was nobody teaching ments. I went to local investment clubs,
how to buy rental properties. The gurus fo- networked with experienced investors, and
cused on single family houses, just as they started “bird-dogging” for them (finding
do today. So I had a big learning curve. Continued on pg. 60 PAGE 7 • 2010

invest without drama
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!

by Carla Fischer

n 1903 The Wright (www.triplenethouses.

Brothers made history com) takes all the un-
in Dayton, Ohio, with knowns off the table.
their first power airplane By purchasing a Triple there. When we rehab a property we pretty
flight. Net rental, investors will much do everything so we know it’s going
One hundred four know exactly what their to be a maintenance-free property. When
years later, Peter Julian, CEO of cash flow is going to be we finish, it’s almost like a new house.”
Triple Net Houses, reflects on for the next ten years. The company’s record is impressive. “In
their short three-year revolution- Julian explains: “When the year 2009, we collected 97.4 percent of
ary history that began in 2007 as Peter Julian we lease the house it’s a our scheduled rent,” Julian proudly states.
a premiere provider of real estate manage- triple net lease, which means we pay taxes, “It even amazes me!”
ment. “We’ve reinvented the way people insurance and maintenance. Basically we In Dayton, market rents range from $595
invest in residential rental real estate,” Ju- pay all the operating expenses, so there’s to $950. The company rents with a one
lian says proudly. He then adds: “It’s kinda nothing our clients have to pay. We man- year lease agreement. A typical scenario

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.
overcast. We’re going to get some rain later age the property so there’s no management. is this: A tenant occupies a three bedroom,
on, which doesn’t mean a thing for our in- Investors will never have to deal with a ten- one bath home, 1,100 square feet, with a
vestors who are from all over the country. ant and never have to deal with or pay for one car garage, for $700 a month. Many
The weather rarely has anything to do with maintenance,” Julian explains. homes are brick with full basements, some
our business, unlike the Wright Brothers.” The company offers a 10-year NNN are ranch houses built in the late ’50s.
Julian shifts to business quickly explain- (triple net) lease. If investors want to ter- Dayton is home to the largest single
ing how he created a NNN (triple net) in- minate early, all they have to do is provide site employer in the state of Ohio: Wright
vesting model, which is traditionally only a 60-day written notice. There is no penalty Patterson Air Force Base with 26,000 em-
found in commercial real estate transac- and the investor still owns the property. ployees. The city also has two universities:
tions. “It’s a turn-key investment. It pays a Wright State University with an enroll-
“I’ve been a real estate broker for a little high yield and we’re able to buy houses at ment of about 18,000, including a medical
over 30 years. I’ve worked with investors low cost and rehab them economically. We school. Next is the University of Dayton,
my entire career. When I talk to them, most then pass that deal on to an investor, as a which enrolls over 10,000 students and
like all the good things about real estate, totally turn-key investment. Their total in- also offers a law school program.
like the cash flow, the tax write-offs, build- volvement after the investment is to collect As far as the financials, a Triple Net in-
ing-up equity, and potential appreciation. a payment from us each month, which is vestor can realize up to 17% return on each
But when potential investors get to talking electronically deposited into their checking house.
about managing, they’ve all heard the hor- account. It’s a perfect storm.” “If the investor pays cash then they
ror stories about tenants, maintenance and When asked how Triple Net Houses can will receive 9.1%.” Julian explains fur-
all those kinds of things.” provide guaranteed returns for investors, ther: “For example, if they have a $60,000
So Julian and his team came up with regardless of what is going on with their house the investor will be receiving $5,460
a unique solution. It’s basic and simple, property, Julian replies: “We’re very care- a year, which is 9.1% of the purchase price.
even though it tackles a complicated con- ful in selecting properties in neighborhoods Continued on pg. 47
cept. The Triple Net Houses program where we know the rents are going to be PAGE 9 • 2010

Specializing in
the Memphis
California Life
Tennessee Rentals
by Ginger Macias | photography by Sam Green

ast year, while working as a pan- Ginger: What did you do before you
elist at a local real estate invest- became a full-time real estate investor?
ment club in Los Angeles, I had What is your background?
the pleasure of meeting Mathew Mathew: Let’s see, I grew up in the tiny
Owens, a certified public accountant and town of Los Angeles and graduated from
owner of OCG Properties. I was so im- the University of California, Santa Bar-
pressed by his experience and work ethic bara, with a degree in economics and an
that I invited him to partner with me on emphasis in accounting. Afterwards, I was
syndicating real estate projects. able to achieve one of the accomplishments
Having worked closely with him for al- I am most proud of, passing all four parts
most six months now, I can say that he’s the of the CPA exam in one sitting, a feat only
real deal and you’ll be in for a treat if you 10% of candidates have been able to do.
get the chance to work with him. Mathew After passing the exam, I worked as a
has many strengths that make him a great CPA, auditor and business adviser, help-
partner: integrity, organizational skills, ing my corporate and individual clients
and real estate and investment proficiency. increase their bottom line, helping them
Plus, he’s very likable. find fraud risk factors inside their business
I have met a lot of people in this business, systems and auditing their accounting re-
and I expect great things from him in the cords.
coming years. I guess that is why I am so good at do-
I recently sat down with him to ask about ing due diligence on real estate transactions
his real estate investing strategies and the now. The accounting and due diligence
current projects he’s working on out in Ten- skills are a perfect match for a real estate
nessee. Mathew has purchased, renovated, investor, I just had to adjust my personality
and sold or held more than 100 investment to be more outgoing and personable, which
properties in the last three years alone. most CPAs are not known to be. Being in
Below is a partial transcript of the inter- the real estate industry as a full-time inves-
view I had with him. tor, I am finding it is rare to find a CPA who
understands the tax and legal implications
Ginger: Mathew, in your own words, of investing and the real estate investment
what exactly does OCG Properties do? side in detail.
Mathew: In a nutshell, we help people in-
vest in real estate. At OCG, we sit down and Ginger: So tell us, how did you get your
go over our client’s financial situation and start in real estate?
resources to help them find the best ways Mathew: I started investing about five
to invest and meet their individual goals. years before I decided to take some real
With good in-house management in place, estate education courses and quit my cor-
you can hold for long-term growth and re- porate job cold turkey. I found that the skill
ally get a great return on your money. On sets I gained from working at CPA firms
top of that, the price points are low enough were hugely valuable, and I still hold the
that you can buy with cash and not even partners of those firms with the upmost
have to deal with financing. Talk about low respect for what they taught me, the eth-
risk! ics they instilled in me and the guidance
We help our clients achieve great returns they gave me. However, the skills that I
on their money while doing all of the due have developed running my own company
diligence on every investment. We bring a are unparalleled to anything I would have
ton of real estate experience to the table and ever expected. While working for myself,
help our investors every step of the way. I started flipping and holding properties > PAGE 11 • 2010

in Memphis. I got through my initial learn- that the current reported unemployment to go out and develop a team in every mar-
ing curve and kept striving for more deals rate is 12.8%, there is a $19.9 billion dollar ket, which is exactly what we did out in
with a magnificent obsession for real estate gap in the California budget, the California Memphis. We have in-house management
that only few can really understand. It was mortgage delinquency is up almost 100% and a team on the ground there that helps
tough, but after getting through the strug- year on year, 90% of us get all of the
gles, you find yourself breaking through the Alt-A and Option Mathew Owens, his brother and little sister. information we
and finally achieving success. Working that ARM loans coming need to be suc-
much taught me multiple things. But one due are underwater in cessful.
thing stuck more than anything else: Pas- California, 1/3 of Op-
sive income is the goal! tion ARM loans are Ginger: What
delinquent already, the team members
Ginger: You live in Southern California California tax rate rose should one have
and invest in Memphis, Tennessee. Why from 9.3% in 2008 to when investing
do you invest so far away from where 9.55% in 2009, and it out of state?
you live? will rise again to cover Mathew: There
Mathew: That is right, I live in sunny the gap in the budget. are a number of
Redondo Beach and invest in Memphis. On top of all that, team members
Most of the investors I meet ask me this people who are under- you need in order
exact question, and the simple answer is: water in their homes to be a success-
I invest with logic and statistics, not based and not in financial ful real estate
on what my emotions are telling me. hardship are starting investor. At the
Look at the economics in the Memphis to walk away because top of the list
market. It has one of the highest price-to- it does not make finan- for any buy-and-
rent ratios in the nation! It did not take a cial sense to hold them hold investor is a
huge dip like a lot of markets, it had an av- and hope they go up great, and I mean
erage annual appreciation of 4% per year $200,000! G R E AT, p r o p -
over the past 20 years. It’s a very stable e r t y m a n a g e r.
market. The population is also expected to Ginger: I’m an out- Property man-
increase and you can pick up property that of-state investor too but other investors agement is the number one reason an in-
not only cash flows but gives you apprecia- may be skeptical about owning property vestment property will fail to produce posi-
tion potential in the next 10 years, which is so far away. tive cash flow, assuming you did your
numbers correctly and did not buy in a
ghetto. In addition, an investor needs lend-
ers, REALTORS®, 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 difficult
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
A sample OCG Property.
and your investment success. We also take
an ethical and conservative approach to in-
not something I can say about California. Mathew: They are really missing out! vesting and do all of the right due diligence
California is a huge risk right now for buy- Ginger, we both know that with technolog- on every investment.
and-hold investments. ical advances you can invest anywhere in We really care for our clients and care
If you take a look at some of the econom- the world now, and it’s as if you’re invest- about their goals and what their interests
ic indicators in the California real estate ing in your own backyard. are. We have a guaranteed tenant and reno-
market, some of the things you will find are The reality is, everyone has the resources vation on every property, and put the proper PAGE 12 • 2010

structuring and risk miti- exactly what the majority of men do.”
gation procedures in place If you never quit, you will succeed no
on every investment. We matter what adversity you face.
also set up proper com- Ginger: What is the first step someone
munication procedures needs to take to invest with you?
for our management com- Mathew: They need to call us and sched-
pany to keep our investors ule a consultation. We look at each inves-
frequently updated on the tor’s resources, financial situation and in-
progress of their invest- vestment goals to make sure we help them
ment. invest the right way and surpass their indi-
vidual investment goals. Once an investor
Ginger: What due dili- schedules a consultation with us, we move
gence is done on your them from sitting on the sidelines to devel-
investments? oping a passive income stream to retire on
Mathew: Wow, where — as fast and safely as possible.
do I begin? I will give
you the quick version. To Ginger: Do you have anything else you
start off, we do a complete Mathew: Do not give up, no matter what. would like to share with our readers?
neighborhood analysis on every property Any business, any new venture or opportu- Mathew: Yes, thank you. I would just like
along with a market value analysis, which nity that you want to achieve, is 90% men- to add that some people will make up ev-
includes pulling comparable sales and get- tal and 10% skill. If you never give up, you ery excuse in the book for why they do not
ting an appraisal done before we close es- can never lose. It’s best said in the book or cannot do something. I am here to tell

“With technological advances you can

invest anywhere in the world now, and it’s as
if you’re investing in your own backyard.”
crow. We also do a rental analysis, cash “Think and Grow Rich” by Napoleon Hill: you that you can do ANYTHING if you
flow analysis, profit analysis, renovation “Before success comes in anyone’s life, focus and take ACTION steps towards its
analysis and every kind of analysis a CPA one is sure to meet with much temporary achievement.
can think of to protect ourselves and our defeat, and, perhaps, some failure. When Do not let your emotions tell you it can-
investors. defeat overtakes someone, the easiest and not be done, even if you were not initially
In addition, we get an inspection by a most logical thing to do is to QUIT. That is successful. Even if it is difficult to see how
qualified inspector and compare it to the you are going to accomplish it, don’t give
renovation bid. Each renovation bid comes up. There is always a way, but it comes
with an item-by-item, room-by-room down to taking action. Most people give
breakdown of the renovation costs, includ- up at the mere thought of difficulty, and
ing materials and labor. This is extremely your success in real estate, and in life, are
important so you know what your costs are going to be based on your ability to focus
going to be on future renovations. When and take action.
leasing a property, it is important to get a Also, a successful investor has to be
qualified tenant. If you do not, you will be completely dedicated. They must ignore all
sorry later when you have to evict them of the people who have an opinion but are
because they cannot afford the rent. We less- educated about the subject.
qualify them similar to a home loan pro-
cess. We look at their debt-to-income ratio Ginger: Thanks, Mathew. I wish you
and credit. We do a background check and continued success in your investments.
really get a good assessment of their per- Mathew: You’re welcome, Ginger.
sonality, which can tell you a lot.
For more information, please visit:
Ginger: What tips can you give to people or email:
who want to get started investing in real | OCG Properties
estate? Photograph of Mathew Owens by Sam Green can also be reached at: (424) 757-4680 PAGE 13 • 2010

Invest Investment Vampires
in YOU for the Next Decade by Richard Barrett

Never Miss an Issue!
he ten years ahead of us will be cant inflation soon. Experts argue that de-
Realty411 Wealth Real Estate
extremely difficult for investors. flation is the bigger risk. While that may

e Pu
Sp blish
l Ed s of
iti Real
on ty
fro 41
m 1
Yield and growth will be scarce, be true, it does not make inflation any less | Vol. 3 • No. 2 • 2010 A Resource Guide for Investors

Tips for Long-Distance Vol. 1 • No. 1 • 2010

LANDLORDING Maverick Investor Group

Turn-Key Rentals
but much worse will be the four destructive when it starts nibbling at your
Around the Nation
Cash Flow from the
Comfort of Home vampires waiting to suck the life out of investments.
almost every investment you consider. In
Mathew Owens, CPA, owner of
Buys & Rehabs
Rentals in Tennessee
from Redondo Beach

Look Inside
Get the Deals DONE
Learn Creative Real
Estate Techniques
from Dave Lindahl, Dolf de Roos,
this article, we will meet each vampire in- Garlic to Protect Your investments from
dividually, understand how they drain your the Inflation Vampire
Bruce Norris, Bill Gatten and more!
Wealth Celebrating the Largest
Report! Issue with More Pages &
Opportunities than Ever!

photo by Sam Green

Serving the Needs of Accredited Investors - INSIDE: Information to Grow and Maintain Your Wealth

16 Words of Wisdom from

Masters of Real Estate 19 Maverick Investor Group
Reveals the Next BIG Thing 35 Bruce Norris Prepares for Annual
“I Survived Real Estate” Charity
investments dry and learn about some “in- To protect against the corrosive power of
vesting garlic” that can keep them away. inflation, you need investing vehicles with
2 Magazines, 1 Mission: three specific features:
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inflation reached over 14% In general real estate values track
2 Years for Only $49 annually in 1980, usher- inflation. That is, their value
Circle magazine of choice:
ing in years of stagfla- remains constant or appre-
tion—high inflation ciates even as the value
Realty411 RE WEALTH combined with high of each dollar declines.
unemployment. In Likewise, the income—
only five years the rent—from investment
_____________________________________ value of invest- property tends to track
Name as it appears on credit card
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lost almost 75% of investment asset.
_____________________________________ its purchasing power
Credit Card # (visa, mc, amex) during that decade. But Not Just Any Real
This year, with unem- Estate!
_____________________________________ ployment and underem- In truth, most real estate does
Expiration Date CVC code
ployment already approaching not deliver these three critical fea-
25%, the nation is poised to see a replay of tures. The past few years, have seen crush-
those difficult years. ing drops in the price of condos in Miami,
_____________________________________ To estimate the curve of inflation in this almost any property in Detroit, suburban
Signature Required new decade, we need a basic understand- tract homes in Phoenix, plus office tow-
ing of the causes of inflation. Noble Prize ers and shopping malls across the country.
_____________________________________ winning economist Milton Friedman said it Buying investment property takes effort,
Mailing Address
best, “Inflation is always and everywhere considerable research and a team of ex-
a monetary phenomenon.” In other words, perts working to assist you. With the right
when the Federal Reserve prints more guidance and team in place, an investor
_____________________________________ money than the economy can absorb, the will never have to worry about those evil
City State Zip economy catches a bad case of inflation in investment vampires.
the next 12-24 months.
_____________________________________ The money supply exploded in 2009. It
Email Address or Phone (to join our network)
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then grew another 50% in the next year. ( With offices
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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-
Dolf & Carter
give readers the latest
Tips from AZ
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 Interview by Carter Froelich, CEO of The Property Ledger
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 Dolf de Roos Carter Froelich
Arizona’s top real estate investing giants. —The Editor

Carter: Hello, Dolf. Tell us about what Dolf: I like being on the cutting edge of cloud, you can access your portfolio’s de-
you’ve been doing lately and give inves- what is available. I have always done well tails from any computer connected to the
tors your perspective on the market. with new technology. When fax machines Web. Before long, most services will have
Dolf: Well, Carter, although the media re- came out, it saved us thousands of dollars a that feature, but by then The Property Led-
peatedly states this is the worst real estate year in courier fees. ger will have innovated yet another area.
market we have seen in decades, it is only Now, we don’t fax; scanned attachments Surfing is so much easier one foot ahead of
the wave than one foot behind.
Furthermore, having all the details of
“... with the information stored in the cloud, a property, including title documents,
HUD1s, leases, management agreements,
you can access your portfolio’s details from and the like, stored in one central reposi-
tory is simply a great way to run your prop-
any computer connected to the Web.” erty investment business. Once you have
experienced it, it is difficult to revert back.
It would be like going back to using slide-
the worst market if you are in the unfortu- are better quality, in full color and don’t rules, or for those readers not old enough to
nate position of being forced to sell. If you require an outdated phone system to get remember what they are, the curly-paged
are in the fortunate position of being able through to a recipient. and faded fax machine — if they even re-
to buy, then by definition, this is the best When I come across people in the real es- member that!
market we have seen in decades. tate industry who do not use email, and in-
With that said, there are still many who sist on using faxes exclusively, I think they Carter: Since you travel often, are the
have trepidation about entering our current must miss out on deals because of their features of Electronic Library useful?
real estate market. This has forced me to go aversion to new technology. I do not want Dolf: Absolutely. In fact, more and more
overseas. There are many countries right to fall into that trap. The Property Ledger companies are trending towards cloud
now experiencing the peak we saw a few is cutting edge, extraordinarily useful and computing. Clearly, it is convenient to
years ago so they see the relative merits of easy to use. Why would you not use it? be able to access all the relevant data on
bringing their money to the United States a property from anywhere and not have
and investing here. Carter: What benefits are provided by to be concerned with taking up space on
The Property Ledger, which other prod- your own computer, keeping data in sync,
Carter: Why did you become interested ucts do not provide? having the data concerned fall into strange
in The Property Ledger? Dolf: With the information stored in the hands in the event of a computer loss, in- PAGE 16 • 2010
stalling upgrades, etc. It is all done for the investments regularly, with real estate, you simply the income divided by the invest-
end user. can buy a property and put the title in a bot- ment. With real estate, since you only need
tom drawer, take a six-month cruise, and to come up with a small portion of the pur-
Carter: Why is it important for investors not worry if you should sell the property chase price in cash, the cash-on-cash return
to monitor the financial performance of again. However, it is comforting to be able becomes very important and, dare I say
their real estate portfolio? to put your finger on the pulse of how your it, interesting. It is an advantage inherent
Dolf: Interestingly, it is important for inves- investments are performing. in real estate investing that is often over-
tors in stocks and commodities to maintain looked by financial advisors.
a vigilant eye on their volatile investments Carter: What is your favorite financial
so that they can jump ship if the ship starts calculation when analyzing your proper- Carter: What type of investment do
to sink. With real estate being a much more ties? And why? Here are the choices: you favor right now and why?
stable investment, much of the interest in •Gross Rent Multiplier Dolf: When it comes to residential property,
monitoring your portfolio is just that: inter- •Cash-on-Cash Return on Investment I prefer the single-family home. However,
est. However, if you want to know when •After Tax Cash-on-Cash Return for the last two decades, I have personally
you can invest in yet another property, •Internal Rate of Return focused on commercial real estate. That
based on cash-reserve build-up, equity po- •Return on Equity doesn’t mean I haven’t invested in other
sition, available collateral, etc.), then you Dolf: I like to analyze based on cash-on- sectors but the benefits of commercial real
want to have the up-to-date information cash return. This calculation shows you estate for the property owner are incred-
available instantly. The Property Ledger how the cash you are putting up is perform- ible. Here are just a few of the benefits:
provides just that when you need it. ing. It is the prime indicator of how you 1. The leases tend to be much longer —
can truly leverage your money. What other anything from three to twenty years. They
Carter: How often should an investor investment allows you to get a $100,000 are generally secured by the business, with
track the financial performance of their asset for only $10,000 or $20,000 in cash? the owners offering a personal guarantee.
real estate portfolio? For most investors, you can’t buy 2. Commercial tenants tend to maintain the
Dolf: As often as they feel comfortable. $100,000 worth of stock or gold or oil property better as the look and condition of
One of the advantages of real estate invest- without coming up with the entire pur- the property is important to their business.
ing that I often tout is that unlike the stock chase price in full. When you put up all the
market, where you have to monitor your money to buy an investment, the return is Continued on next page
Dolf & Carter, pg. 17

Tenants often improve and up- the Gilbert Planning Commis-

grade the space with their own sion. This is indicative of the
money. long term. In the short term,
3. With residential property, the things look pretty grim, again,
,QWURGXFLQJ0XOWLIDPLO\'HDOV landlord tends to pay the outgo- if you are forced to sell. There
ings such as property taxes, in- is word on the street that there
LQ&DOLIRUQLDZLWK&UHDWLYH)LQDQFLQJ surance and maintenance. With will not be a u-turn for years.
ZZZVRFDOPXOWLIDPLO\FRP commercial real estate, the ten- Things go in cycles. When
ants who are leasing the prop- you get old enough to have
erty, pay for those expenses. experienced a few cycles, you
learn to embrace them rather
Carter: We’re both located in than fear them. There will be a
Arizona; let’s discuss the local turnaround. If you can buy real
market. Where is it heading? estate that cash flows now and
Dolf: I’m optimistic. There was have a great chance that long
an article in the paper just three term the capital value will go
3XUFKDVH3ULFH 3XUFKDVH3ULFH days ago stating Taylor Morri- up immensely, why would you
$YJ5HQWDOSHUXQLW $YJ5HQWDOSHUXQLW son Homes will begin construc- not acquire some real estate?
tion in July of a master-planned Learn more online about
community in Gilbert. There The Property Ledger, visit:
will be 17 phases developed
over the next 12 years accord- To reach Dr. Dolf de Roos, visit:
ing to the report submitted to

FREE e-Book Offer, For a Limited Time!

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Maverick Investor Group
Scours the Globe for the
Best Investment Properties
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 office 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 five-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 Mark Solak Valerie Schrock Matt Bowles

Next Destination: The Hidden Tropical Paradise of...Nicaragua

radically improve people’s lives through close as many as 34 transactions and pay the international component, is just a con-
real estate.” out nearly a quarter of a million dollars in tinuation of the global lifestyle enjoyed by
And their radical approach to real estate buyer referral fees to real estate brokers in its principals. The company was founded
is working. Even during 2009, in a single the Maverick Referral Network. by Mark Solak, Valerie Schrock and Mat-
90-day period, the company was able to Maverick’s business model, including thew Bowles — real estate investors > PAGE 19 • 2010

and licensed real estate professionals with worthy people I had ever met, all essential we use. It was crucial for everyone to start
formal, advanced degrees. Prior to joining qualities for business partners. The three of with the vision of their own ideal lifestyle.
forces, they led cosmopolitan lives, trav- us began pooling our skills, resources and Matt likes to work from his rooftop pool
eled the world and lived in foreign coun- creative energies to develop a cutting edge deck in LA, Mark likes to spend extended
tries for extended periods of time. business model that could provide unparal- time in Europe each year, and I like to go
Recently, I caught up with the Maverick leled advantages to real estate investors and skiing in Canada and spend part of the year
power trio to discuss their latest turn-key real estate agents. In 2007, it was ready to in Phoenix with my parents. So we struc-
buying opportunity—the Seaside Mariana be launched so we all quit our jobs, flew to tured our real estate business to facilitate
Spa & Golf Resort on the Pacific coast of Las Vegas and, while overlooking the Strip our dream lifestyles. But, more than that,
Nicaragua. from a rooftop lounge, raised our glasses Maverick has built an entire community

Seaside Mariana Spa & Golf Resort features the first Jack Nicklaus Signature Golf Course in Nicaragua.

Q: How did the three of you become busi- and announced to the world that Maverick of real estate investors and agents who are
ness partners? Tell us a bit about how Investor Group was born! focused on using real estate as a vehicle
Maverick Investor Group formed? for designing their dream lifestyles. We
MB: Well, Valerie and I met in graduate Q: The Maverick partners live in differ- show our clients how to do what we do.
school in 1999. We both got master’s de- ent states — Matt is in Los Angeles, Valer- You will notice that we have a section on
grees in International Peace and Conflict ie is in Washington D.C., and Mark lives our website that discusses “real estate life-
Resolution and then worked in human between Chicago and Las Vegas. That is style design” in great detail, down to the
rights advocacy in Washington, D.C., for pretty incredible! How did you decide to specific technology products we use. Real
several years. We started investing in real structure your company like that and how estate investing is only a means to an end…
estate on the side, reading books about it does it affect your business? it’s always important to keep your eyes on
and learning by experience. Soon we had VS: We were intentional about structuring the larger prize. Money isn’t very useful
millions of dollars in real estate holdings in the company that way from day one, and if you have lost touch with your dreams.
states all over the country. the primary reason is “freedom of mobili- How can real estate enable you to recapture
I met Mark in 2005 when he sold me over ty” for the Maverick partners. It’s all about your time, design your dream lifestyle and
$2 million worth of investment properties lifestyle. We can live wherever we want make enough money to finance it? That’s
in Las Vegas. I was blown away by his and travel whenever we want for as long the big picture.
customer service; it was the best I had ever as we want, and no business falls through
seen in any industry. These were two of the the cracks because of the systems and pro- Q: Maverick has always encouraged
most talented, ambitious, honest and trust- cesses we have set up and the technology out-of-state investing, why are you now PAGE 20 • 2010

moving to international real ment in Nicaragua, making
estate? it particularly friendly to for-
MS: For the same reasons, eign real estate investors.
we’re just expanding the play- For example, as an inter-
ground. The reason why I national investor who lives
would never limit myself to in the US, I can own freehold
buying in my own city or state property in Nicaragua with
is because there might be a bet- title insurance from a North-
ter market than the one I live American-based title com-
in. The failure to consider in- pany, and when I sell it for
ternational real estate markets a profit I will owe no capital
produces the same restriction. gains tax in Nicaragua. Pres-
I want my money in the best ident Ortega has personally
market in the world no matter endorsed the Seaside Mari-
where I live, period. Maverick ana resort because it is an-
is opening up a private chan- ticipated that it will result in
nel for real estate investors to an explosion of tourism and
access unlisted properties in be a huge economic boon for
premium global markets, with the country. So the govern-
property management options ment is very supportive of
in place and a variety of exit foreign investors coming in
strategies.  Buying  through to buy real estate.
Maverick has always meant Seaside Mariana Spa & Golf Resort sits on 2 kilometers of pristine beach front.
getting exclusive prices and Q: What kind of deal terms
terms that are not available to up the coast is Nicaragua. It borders Costa was Maverick able to nego-
the public. That has simply expanded to Rica and has the same weather, the same tiate at Seaside Mariana and how can our
the international arena. beaches, the same sunsets, but a much readers get in on the action?
lower cost of living and, at the moment, VS: As you know, our prices and terms
Q: Why did Maverick choose Nicaragua? much lower property prices. Seaside Mari- are not available to the public, so I cannot
And why the Seaside Mariana Spa & Golf ana will be Nicaragua’s first luxury resort unveil any details here. I will tell you that
Resort project in particular? with a five-star international brand hotel this is one of the most extraordinary deals
MB: Over the last two years, the Maverick and a Jack Nicklaus signature golf course. I have ever seen and that we have a global
partners have traveled throughout Europe, We are talking about a 923-acre resort on exclusive on the entire resort—the only
the Middle East, the Caribbean and Central 2 kilometers of pristine beach front. Noth- way to buy a property at Seaside Mariana
America to review real estate projects. In ing like it currently exists in Nicaragua. is through Maverick.
our opinion, Nicaragua is one of the pre- This project will single-handedly take the For detailed information and private ac-
miere emerging markets on the world stage country to the next level as a tourist desti- cess to our special prices and terms, your
today. When you look at a map of Central nation. When the number one golf course readers will need to become part of the
America starting from the south, you be- designer in the world chooses to go into a Maverick community. Real Estate Inves-
gin with Panama, then Costa Rica — both market for the first time, real estate inves- tors can apply to join our community of
of which have already exploded as tour- tors should perk up their ears. It is exactly VIP Buyers and get access to unlisted deals
ist destinations over the last 15 years and these types of seismic events that I look for like Seaside Mariana. Real Estate Agents
have seen corresponding appreciation in when I choose where and when to invest can apply to join the Maverick Referral
property values — and the next country my own money. Network and make 3% every time their cli-
ents close on a Maverick Deal.
Q: What is the political We invite smart real estate investors and
and economic climate in savvy real estate agents to contact us today.
Nicaragua right now? We don’t care if someone has a lot of ex-
MS: Nicaragua has had perience, we care if they are serious about
a democratic government using real estate to build their wealth and
for the past 20 years and design their lifestyle.
has had five transfers of
power during that time. For information, contact Maverick Investor
Recently, the government Group: or
has been passing laws to email:
encourage foreign invest- PAGE 21 • 2010

Blue-Chip Real Estate Strategy
Fits Economic Climate
by Ryan Hinricher, co-founder of
This article originally appeared on

a lot of investors get well-versed in Section 8 you can profit
he housing recovery is in trouble. The lower greatly in the lower-end homes.
limping along slowly priced homes usually The median-priced home becomes the
leaving many real es- have households with blue-chip property. The blue-chip home
tate investors wonder- limited to no savings has lower levels of vacancy and rents that
ing where to invest their dollars. or emergency fund. So have been buoyed by average people be-
Some speculation is even re- when a tenant loses a ing displaced from their primary residence
turning to the market with new job, the property owner via foreclosure. In the market where my
investors looking to purchase, feels that impact pretty company is located, average-priced homes
renovate, and resale distressed quickly. Also lower- are selling for around $115,000. Obviously
properties for short term profits. priced homes tend to with distressed inventory out there, one can
Owning a real estate investment be in older areas giv- purchase properties at lower prices than
Ryan Hinricher
brokerage allows me to see a va- ing the owner a much this, improve them and probably have eq-
riety of transactions, including retail flips higher rate of maintenance. uity that is more tangible than lower-priced
from speculators, investors buying $8,000 homes. How can one possibly model a
homes, renovating and placing tenants in The Numbers $115,000 home the same way as a $30,000
them, and a higher quality purchase and This is where investors usually make mis- home? The $30,000 home (in most cases)
hold homes closer to median home prices. takes. The surface numbers can be very will have significantly higher rates of va-
The latter is a strategy that I believe right deceiving in real estate. When analyzing cancy and maintenance.
now is being overlooked by many inves- a real estate transaction If you go up a step to
tors. many investors aren’t the higher-than-average
using vacancy and main- priced homes, you’ll no-
The Product tenance, or applying the tice those homes might
There are many markets where you can same vacancy and mainte- offer stable tenants, usu-
purchase and hold homes at the median nance numbers to homes ally high-end profession-
or even average home price and receive a that vary widely in price, als who will reliably pay
positive cash flow with a traditional 20% age, neighborhood, size the rents. The cash flows
down strategy. These homes, are out-per- and city. This can cause a may look lower on the
forming many lower-priced homes from pretty big disappointment surface than other types of
rental prices and home values perspective. when the cheap property you purchase is homes but these blue-chip homes perform
Median-priced homes in most markets are affected by socio-economic issues leading more reliably on maintenance, vacancy,
three bedrooms, two bathroom homes, to high tenant turnover, criminal element, and valuations.
which offer good car storage. Usually this slow-paying tenants and maintenance is-
is the type of home most Americans desire sues. Financing
to live in ensuring you always have both an I’ve seen many people advertise profor- Financing on blue-chip homes tends to be
available rental pool and an available buyer mas with high cash flow on smaller, older much easier than most any other price point
pool. This product offers real estate inves- homes in areas with high crime, poverty, for a number of reasons. First because the
tors multiple exit strategies with the ability poor schools, and with low rates of home prices are low enough you don’t worry
to sell it retail versus lower-end properties, ownership. One can argue that these can be about jumbo loan pricing, rates, and re-
which usually need to be sold to other in- good investments structured correctly and strictions. On the lower end not all lenders
vestors. by applying the right metrics to ensure a are lending on homes priced under $50,000
In addition, median-priced homes are more accurate projection of cash flows is and at times have a different rate table. In
usually in areas low in crime, close to achieved. These lower-end properties have and around the median price nearly every
schools, shopping, houses of worship, and become the penny stocks of the real estate lender offers investor loan products. I’ve
with easy access to employment. The in- investment business. If you get the perfect also found the appraisal issues are fewer
verse of this is, of course, also true. I per- tenant who doesn’t feel the pains of the because normal sales activity exists at this
sonally own properties at much lower price recession, maintains the home themselves Continued on page 24
points as well. They took the hardest hit and stays in the property for a long time,
on rents and value. This is where I’ve seen you could hit pay dirt. Similarly if you’re PAGE 22 • 2010
Blue Chip Real Estate Strategy, pg. 22

price point. When you have a ida, which were impacted very
lot of normal sales, valuation little by the housing boom and
tends to be (somewhat) stabi- bust. Many of these cities have
lized. a good economic future, afford-
able tax rates, net population
Exit Strategy growth, and high enough rents
Having an exit strategy is an es- to achieve positive cash flow at
sential part of your real estate the median home price.
plan. Some investors plan on
never selling and while that In Summary
can make sense to receive all With distressed properties mak-
the benefits of real estate, lives ing up a large percentage of
change. If you think back five total sales, then it only makes
years ago and how different sense to focus on buying blue-
things in your life were at the chip homes at a discount today.
time, you might agree that hav- In doing so, one can realize
ing an exit strategy is impor- equity through quality reno-
tant. vation, placing a tenant and
With these blue-chip invest- holding. These homes should
ment homes, you’ll find mul- provide you relative peace of

Having an exit strategy

is an essential part of
your real estate plan.
tiple exit strategies. Median- mind when compared to lower
priced homes have the widest price points due to the lower
available buyer pool. Think socio-economic risk discussed
about that for a minute: Lower- earlier.
end homes typically are resold These types of rentals are a
to investors. So imagine buying good fit for people looking to
a home on the lower-end at 60 diversify out of equities and
cents on the dollar and thinking accumulate a few properties.
you have a lot of equity. In fact While they may offer stronger
if your future end buyer is an fundamentals than most prop-
investor, do you think they’ll erties they obviously aren’t
pay 100 cents on the dollar? bullet-proof. These are compa-
Time on the market is also rable to owning GE stock (GE
another factor. At the median- registered no U.S. profit last
home price, time on the market year). While you can depend
is usually shorter than any other upon these homes most of the
price point. So in planning your time, the downside risk is usu-
long-term strategy it seems to ally minor price depression
make sense to invest in homes during an economic recession.
that could be sold quickly, fi- Lastly, in many markets this
nanced easily, and sold at or type of product and strategy
near market value? simply wasn’t an option when
prices were higher. I doubt that
Where to Find very far into the future this
There are many markets you opportunity will be as widely
can find these types of proper- available again in as many mar-
ties in today. Without going kets as it is today.
into much detail in this article, -
there are plenty of cities which Ryan Hinricher is co-founder
lie in states outside of Califor- of Investor Nation, visit online:
nia, Nevada, Arizona and Flor- PAGE 24 • 2010
3 FREE Ways to Find a
Great Wholesale Deal Today!
by Ginger Macias

just had a great call with one narrow down your search
of my coaching students on to REOs, probates, fixers
how to get a deal signed up by or other criteria. You don’t
the end of today. Times are tough, even need access to the favorite ways to find deals is to ask other
and although sending direct mail MLS, just find an investor- wholesalers what they currently have un-
pieces is a great way to get leads, friendly agent and let them der contract and to market that property
sometimes it’s just not possible know your criteria. They to my buyers’ list. Or, if you’re a rehab-
to send them out — especially if will set you up to receive ber or landlord, you can pick up amazing
you’re just starting out. So over the years, free emails. deals without having to do all the leg work.
I’ve learned some “cheapskate” ways of It’s important to work with an agent who Where do you find these wholesalers? If
finding leads. knows you want a smokin’ deal, and who you see a “We Buy Houses” sign, call them.
will make lots of lowball offers on your be- You’ll likely be dealing with a wholesaler.
1. Online RSS: If you’ve been in real es- half without flinching. Also visit your local REI meetings, Google
tate any amount of time, you probably al- For most listings, other than REOs, you “wholesalers” in your area, ask rehabbers
ready know that online sites such as Craig- can also try and make seller-financing who they recommend, and ... don’t forget,
slist, Redfin, Backpage, Oodle, etc., can deals. The point is to get your foot in the ME! I’m an active wholesaler in Southern
have some pretty amazing leads on For door and start negotiating with the seller. California who loves working with other
Sale By Owner (FSBO) properties. The Another lead system you can set up on investors. (Shameless plug? Of course.) If
only problem is that it takes tons of time to the MLS is expired listings. These list- you get a deal done and need to sell your
sort through all those sites to find a decent ings have expired without anyone buying property really quickly, let me know.
deal. the property. This can mean you’d be deal- Well, now there is no excuse for you not
Rhett Halsey, one of my good friends and ing with very motivated people! to find a deal today! Good luck and send
an internet marketing guru for real estate Set up a win-win situation with your me a brief email letting me know if you
investors, told me of a free feature offered agent where they can present your offer, found this helpful.
by most websites: RSS or Real Simple and if the sellers don’t like it, the agent may
Syndication. Instead of multiple searches be able to pick up a new listing. To contact Ginger Macias or learn about
for leads, the leads come to you in one her speaking engagements and wholesale
spot. You can set up a Google Reader ac- 3. Other Wholesalers: One of my absolute deals, visit:
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-
fice and within a few days got three proper-
ties under contract and sold them within a
few hours. My new assistant was floored
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- for example. Do a search using
motivated seller keywords like “fixer,”
“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 find leads for free. You can PAGE 25 • 2010
A Brave New
by Bill Gatten

et’s face it … money for a day

World in
the country, or two at a high
the econ- interest rate (but at
omy and the real a reasonable cost),

estate market is with which to pur-
just terrible. There chase a foreclosed-
are no more good upon property by
deals. Let’s all get means of an all-
out of the business. cash offer prior to
People are not building, buying or selling its scheduled pub-
homes any more. There are so many over- lic sale date. And then selling it on the day for, or in advance of, services to be ren-
encumbered and foreclosed-upon cheap of closing, or soon thereafter, in a separate dered, whether such services are actually
properties available for pennies on the escrow settlement to an end-buyer who ob- performed or not. Another common viola-
dollar that nobody wants them anymore. tains his own loan and lives in and loves tion has to do with “sand bagging” by attor-
After all, who can make a living in this ri- the property forever. neys, and many non-attorneys, who bill on
diculous business these days? This process is known as the “A to B/B a monthly basis for services (mostly loan
Oh yeah? to C transaction.” In other words, you, the modification schemes) while a short sale
And Michael Jackson faked his death, investor are the “B” component; the cur- or loan modification process is presumably
Elvis eats at Burger King, and the world rent owner is “A,” and the end-buyer is taking place. Instead, either there never was
ends in three years! “C”. In other words, “B” buys from “A” any such attempt or the attempt failed, and
Not that they’re needed anymore, but
here are a couple solutions to these hor-
rible problems facing real estate investors “...two REALTORS® in Massachusetts were recently
in this disastrous economy: sentenced to five years in prison each for
1. Stay in bed with a tinfoil hat on your
head. having used this scheme several times.”
2. Go live with your parents and let them
feed you until you win the lottery. in one escrow closing process (taking full the client wasn’t informed and was told,
3. Go back to school on the government, ownership of the property), and then sells “We’re working on it…be patient,” while
and get a law degree so you can force peo- the property to “C” at a reasonable profit in the monthly payments continue.
ple to pay you to stop suing them. a wholly separate escrow process. Another big one, and one that is proba-
OR... It all sounds simple and it is! However, bly most tempting but also most deadly for
4. You can capitalize on singularly the a thorough knowledge of all the rules and REALTORS®, is the situation wherein the
greatest money-making opportunity ever! regulations concerning short sales, equity- investor/REALTOR® has already lined-
And you don’t even need a dollar or a dime purchasing, equity-stripping, foreclosure up a retail buyer who is ready to take the
to do it. consulting, credit repair and mortgage property at its true market value following
lending is absolutely mandatory before the short sale acquisition by the investor.
SHORT SALES becoming too far vested in the business When the scheme comes to light, the con-
The short sale industry is burgeoning of short sales. To date, hundreds of other- tention by the lender in these cases is that
now and will probably continue to do so wise nice-guy and gal would-be investors if the property were worth more than they
for three more years. New short sale mil- have been severally sanctioned, shut down, were told in the transaction, there would
lionaires are being made every day. There heavily fined and/or sent to prison for vio- have been no need for a short sale and their
are billions upon billions of dollars (Re- lating the very stringent laws regulating resultant loss. They see such schemes as
member when a billion dollars was a lot short sales and foreclosure consulting in blatant bank fraud and have no sense of
of money?) to be made in the “transac- various states. humor in such cases. As a matter of fact,
tional funding” of compromised mortgage In my own case, I’ve spent my busi- two REALTORS® in Massachusetts were
defaults — loans that would otherwise be ness as a fearless bull rider: but in this last recently sentenced to five years in prison
forced into expensive and time-consuming Rodeo, I’m sticking to riding milk cows. each for having used this scheme several
foreclosures, and sold by lenders at public I won’t set any records or win any prizes; times.
auction. but I’m a lot less likely to get thrown of and So the long and short of it is…kind’a
Def: Short Sale: The acquisition of real have a horn poked up my rear end (… this, like Henny Youngman was one to say: “If
estate at a compromised (wholesale) pay- is, by the way, an analogy … not a good one, it’s gonna hurt when you go like that … for
off amount that is less than the balance of I agree, but an analogy none-the-less). cryin’ out loud, don’t go like that!”
the mortgage obligation. One of the most often violated of the Today’s short sale market is burgeoning.
Def: Transactional Funding: The two- many regulations being put on the books
stage practice of using another person’s as of late has been that of taking money Continued on pg. 29
10 CA$H Weeks to
����� ��������� ��� �������� ��������� ���������������������������������������� ���������������������������������������

���������������������������������������� ����������� ������������ ���������� ��� ���������������
������������������������������������������ ��������������������������������������������� ���������������������������������������
��������������������������������������� �������������������������������������������� ����� ������� ������ ����� ���� ���� ���� ��
���������� � ���� ����� ������� �������� ��� �������������������������������������������� ����������������������������������������
����� ���������� ����� ������ ���� �������� ��� ������� ���� ������������� ���� ���� ���� ������ ���� ������ ���� ����� ��� ��� �� ����
����������������������������������������� ��������� ���� ��������� ���� ������������ with Matt Malouf
��������������� ��� ���� ��� ����� ��� ����������������������������������������� �����������������������������������������
���������� ����� �������� ���� �������� � ��������� �������� ���� ������ �������� ����������������������������������������������

�������� ������by��� Ginger
���� Macias
����� ������� ����� ��������� ��������� ��� ����� ��� ���� ���� � ������������������������������������������
���������������������������������������� tors, courses and
������������ systems to �������
������������ help them� since 2001. Over the years, he has special-
����������� ��� ���oday’s
�����real estate environ-
���� ��������� ���� achieve their
����������������� success? Those of you who ized in wholesaling, owner financing and
ment can seem a little
��������������������������������������� are living the real estate dream,
����������� ����� ���� ����� ��� ��������you know foreclosures. Malouf has developed a busi-
tricky to navigate. So many
������������������������������������������� that luck had little to do with where
�������������������������������������� you are ness
���� ������ ���he����������
model that describes as ���T.E.R.M.
���� �����
��� ��������� �������� ways
��� ���� to make
����������� today. It takes concrete
������������������������� actions, goals and “It is a model designed
����������������������������������� to efficiently
money exist in
�������������������������������������� this indus- guidance to get to your dreams.
�������������������������������������� minimize the investor’s time, energy, re-
������������������������ it can be overwhelm- Well, for those of you starting out in real
�������������������������������������������� sources and money –��������
������ ���� ������� in that order,” he ex-
���� ���������
ing, especially
�������� for those
��������� who are just���
����������� get- estate who are anxious to get going, there
����������������������������������������� plains.
ting started in real estate investing.
���������� ����� ��� ��� ��� ����������� ��� There are wonderful ways to get into all this ac-
������������������������������������������ To that end, his program is a 10-week
are many late-night television shows that
�������������������������������������� tion.
����������������������������������������� course
��� ����that walks������
������� investors through
���� the ex-
claim to teach you how to be a multi-gazil-
���������������������������������������� Recently, I spoke with Matt Malouf
���������������������������������������� act steps needed to find, analyze and
������������������������������������������� buy an
lionaire by next week, but is there any truth
������������������������� about his new program, which helps inves-
������������������������������������������ investment property that cash
��������������������������������������� flows from
to what they’re saying?
������������������������������������� tors bridge the gap from real estate dream
��������������������������������������� day one. Some topics include learning
���������������������������������������� how
Take a look around. You’ll notice that
���������������������������������������� to reality. And by reality, I’m talking about
����������������������������������������� to set up your property management
�������������������������������������� team,
there are a lot of successful real estate en-
����������������� actually owning
����������� ��������� your very��������
own investment
�� ����� screen tenants, how to hold title and financ-
������ ���������people������
who are
����� a�����
kill- property
�������������at the end of the course! (More on ing options.
��������� ���� �������� �������� �����
ing today, in this down market. The
���������� ��� �������� ���� ������� �������� ques- that later.) ��� ���� ������ ��� ���� ���
����������� The motivation
������ ���� �������� to create
��� �����this����
tion is ����������
������ did they just���start
�����making lots���
�������� of Malouf is���
���������� an����
�������� ��� real estate
������ came from Malouf’s desire to meet the
money by pure luck, or did they have men- agent in California and has been investing �������������������
needs of investors who want to get educat-
����������� �������� ��� ����� ����� ������ ������ �������� ���� ���� ������ �������

ed and match them with the people on the team. Malouf and
best available product in the his team then go out and find a
real estate marketplace. property that meets the stu-
This “hybridization” will en- dent’s needs. They send per-
able beginning investors to buy sonalized updates, letting them
a property that meets their cri- know what’s being done to find
teria, after learning all the basic them a property.
steps needed to acquire and This program lays the foun-
manage that property. dation to successful real estate
“This is not just a course,” investing. Malouf gives this
Malouf explains. “At the end of analogy: “It’s like building a
10 weeks, they’re going to have skyscraper. You have to spend
a cash-flowing house, an asset the time to set up a foundation
to put in their portfolio. It is and set it nice and deep, nice
all- inclusive in the program.” and strong. That way, it will

It takes concrete actions, goals and

guidance to get to your dreams.
Malouf’s T.E.R.M model is stand through the good and the
ideal for someone who has a bad.”
full-time job and wants to start Malouf’s T.E.R.M program
building a real estate portfolio launched this summer and is
as part of their retirement plan. available year-round to a limit-
Over the course of 10 weeks, ed number of people. Be sure to
students receive the entire reserve your place today.
course through the internet, Readers can contact Matt
which includes 30 to 60 minute Malouf directly at (562) 443-
lessons by audio, video and text 7042; mention the “out-of-
articles. Each student also re- state magazine special.” Or
ceives the “Million Dollar visit:
Rolodex,” which gives the con- Enter the promo code “Real-
tact information of all the key ty411” in the note section.

A Brave New World, pg. 27

There really is no limit to the worm,” and “If everybody is

number of homes in foreclo- doing it, it’s time to do some-
sure that lenders would like to thing else.”
get off their books in order to Or
reduce their matching fund re- Set B - “Haste makes waste”;
quirements and free up more “Look before you leap”; and
cash to lend out. “Wait until all the bugs are
Millions of dollars are ready worked out before you jump
to be made by integrally in- in,” or “Wait until you see ev-
volved entrepreneurs over the eryone else doing it, then jump
next few years. in … why take chances?”
To miss out on any of it My own: “Successful people
would be an out-and-out shame make quick decisions and are
… if not a crime. slow to change their minds, the
There are two sets of adages unsuccessful are slow to com-
to live by that one must ponder mit and quick to change their
and decide upon before jump- minds.”
ing into the business: So, what’s my advice regard-
Set A - “Strike while the iron ing the current short sale mar-
is hot”; “He who hesitates is ket? OK, guess!
lost”; “The early bird gets the PAGE 29 • 2010
[ Hitting the Club with
Sensei at 12 Rounds by Linda Pliagas

elf-reliance, balance, integrity: ness cards in hand. Dressed in casual cloth- and building wealth through cash-flowing
these are just some important ing, they chatted while munching on choc- rentals, all using Sensei’s Remote Rehab-
mantras in the martial arts world. olate chip cookies. They discussed their bing program. “The Phoenix market is pro-
Step into a monthly meeting at latest deals, needs and goals. viding incredible wholesale deals on newer
Black Belt Investors and you’ll soon dis- When the master approached the front, homes starting at $48,000,” he says. “Flip-
cover these disciplines are in full force. the students took their seats and settled pers are turning their properties and cashing
With two locations in Southern California down quickly, ready to start their lesson. out about every 90 days. The buy and hold
(Downey and Norco), Black Belt Inves- Sensei’s cash and wealth system is pure strategists are capitalizing on great cash
tors provide a social network for both flow averaging $900 per month.”
the novice and seasoned. It is a club Although he started his career as a
where education is emphasized, deals
are analyzed, and action is taken to
Sensei Spills His Top 5 remote rehabber (his first deal was in
Florida), he now prefers to wholesale
reach goals. Secrets to Land a Deal and calls it: “The Ultimate Real Es-
Ricardo Valencia, a national investor tate Cash Machine.” His investing
with holdings in four states (CA, TX, formula, “Find it, Bind it and As-
IN and MO), stressed the importance Can’t seem to locate sign It™,” is used in California, but
of attending monthly club meetings, a distressed home- the strategy can be duplicated in any
as we were walking into a community owner or unwanted area, in any market.
property? Believe it
center in Downey. Wholesaling “does not require cash,
or not, many people
“We have a responsibility to teach credit or a license, which equals NO
have real estate that
those who are newcomers,” he says they no longer need
RISK.” He further explains, “The
with a smile, “And, at the same time, or want. (Yes, we intention is to sell the contract to in-
you learn from those who are more first found this con- vestors who can’t find a deeply dis-
advanced.” cept hard to believe counted deal on their own.”
Valencia, who travels throughout Sensei Gilliland While many people, including Bro-
too!) Follow these
Los Angeles County to attend numer- five secrets from a master wholesaler, kers and REALTORS® who do not
ous real estate events, admits that and you’ll soon have more deals than understand creative real estate, frown
the members of Black Belt Investors time to work them. upon any deal that is not a traditional
“keep bringing me back ... it’s always transaction, wholesaling retains an
nice to mix and mingle with them.” #5: Code Enforcement: Many local gov-
important role in the community.
ernment websites, such as Los Angeles
What began as a casual meeting at As a matter of fact, wholesalers are
County, offer online lists of distressed
a coffee house in 2000, by investor, often the first to spot and service a
properties. This is an often overlooked
martial arts expert and entrepreneur, treasure filled with potential gems. homeowner or property in distress.
“Sensei” Sean Gilliland has become In wholesaling, success depends on
an organized official club boasting Continued on pg. 59 recognizing circumstances and offer-
two locations and filling the room ing solutions.
with a strong following each month. Sensei recalls one recent transac-
Sensei chose to stake his claim in Downey, and simple. He trains his students on how tion in which he assisted a family made
the city where he was raised. Next, he chose to create cash quickly through flipping real up of siblings scattered around the country
Norco, the city where he now lives with his estate so that resources can be funneled to who were feuding over an inherited home
wife, Annamaria, a licensed REALTOR®, purchase income-producing property. in need of many repairs. Because of the
and their three children. And what areas are being focused on? stress it was bringing upon the family, they
The club meeting room, located inside a Right now, he has two major target zones. wanted to dispose of the property quickly.
community center, was full and bustling in Phoenix, Ariz., is his target zone for rehab- Sensei packaged the deal and sold it to a lo-
May. The sweet aroma of freshly brewed bing flips and rentals; Southern California cal rehabber willing to put in a lot of sweat
coffee and abundant smiles were inviting. is his bulls-eye for wholesaling properties. equity and cash. The investor was willing
The group, mostly in their 40s and 50s, He and his members target Phoenix as to take a risk for a chance to profit.
was diverse in experience and background. their area of operation for fixing and flip-
They were master networkers, with busi- ping properties for immediate paydays Continued on pg. 59 PAGE 30 • 2010

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w w
951.780. 5856
California Depar tment of Real Estate, Real Estate Broker
Bruce Norris Financial Group Inc.
DBA The Norris Group
DRE License 01219911
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
by Lori Peebles for investor rights. For the past two years, event honors her courageous effort to fight

he has united real estate giants to discuss this disease and hopefully adds to the like-
oes “Shadow Inventory” really ex- the issues that matter, and most important- lihood of someday finding a cure.”
ist? What is the state of the REO ly, to exchange ideas that can help investors In addition to raising breast cancer
market? These are just some of do what they do best: rebuild communities awareness and funds for research, as well
the crucial questions to be and rejuvenate econo- as providing investors of all levels access
Bruce Norris with his wife & son.
tackled by real estate in- mies. to information, “I Survived Real Estate”
dustry experts on the eve- “The panel we’re has been instrumental in spotlighting the
ning of September 17. putting together can crucial role investors have in our nation’s
The Norris Group, speak about these issues economic infrastructure.
headed by Bruce Norris, from several differ- Norris explains: “This event gives a
a 30-year veteran known ent point of views and chance for investors to be seen in a different
among investors as the hopefully provide us light. We all know investors are often seen
“Nostradamus” of Cali- with some new as the “sharks”
fornia real estate, is once insights mov- Tommy Williams of the real estate
again organizing their an- i n g  f o r w a r d , ” i n d u s t r y.   We
nual philanthropic event in Norris explains. take this night
Orange County. Some returning to show other
This black-tie affair guests, include: sectors that we,
is one of the most fash- Joseph Magdz- as investors,
ionable tickets in town, iarz, 2011 presi- play a signifi-
mixing charity, important dent for the Ap- cant role in the
trend updates, education, praisal Institute; solution side of
entertainment and industry networking. It Tommy Williams, 2008 president of the market.”
is always a sold-out gala, one that attracts the National Auctioneers Association; and Norris knows firsthand that real estate
the Who’s Who of real estate. Christopher Thornberg, principal of Bea- investors take great risks in a volatile mar-
When we attended last year, it was fasci- con Economics. ketplace. “With greater acceptance, their
nating to note that besides all the tuxedos, New guests are also being added. “We ideas have a better chance at being heard
satin dresses and crème brulées on fine chi- are very excited to have Sean O’Toole and being implemented,” he says.
na, some serious industry trends and alter- from Foreclosure Radar joining the panel The charity event was designed to give
native solutions were pre- this year to add his everyone, regardless of personal income,
Guests at the last year’s event.
sented in just a few hours. data-driven and in- an opportunity to participate.
It was an evening of edu- vestor-minded per- “By joining our walk team and raising
cation with a sophisticated, spective.” the money in their networks, attendees
entertaining twist, much like For Norris, the “I and sponsors can technically come free of
the man behind the event. Survived Real Es- charge,” Norris explains.
“The theme for ‘I Sur- tate” series is per- Sponsorship opportunities are also
vived Real Estate 2010’ sonal. This night is a available. Benefits for advertisers include
will again focus on trends, way of honoring his inclusion in all mailers to local, state and
solutions and have an added wife, his family, his national government officials, SEO op-
focus on the state of REOs,” Norris says. community and profession. timized website advertising, inclusion in
“With constantly changing government In the last two years, the fundraiser has mailers and flyers, plus event program
regulations, it’s been difficult for anyone in raised over $100,000 for the Susan G. and screen exposure. Each sponsor is also
the real estate business to build a sustain- Komen Foundation; these funds are used mentioned in video and radio segments that
able business model.” for breast cancer research. air before and after the event.
Norris, a 30-year veteran investor (from “My wife, Marsha, was diagnosed with For more information, please visit online:
rehabber to private lender) is a champion breast cancer more than 15 years ago. This PAGE 35 • 2010

for The Ultimate Cash Flow Buying Tour
The Clothier family, from left to right:
Chris, Brett, Kent and Kent Sr.

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 fide
landlords. & FortuneBuilders
Our editorial team was invited to attend
The Ultimate Cash Flowing Buying Tour Unite Investors from 18 States & 2 Countries
by, a boutique, Mem-
phis-based brokerage catering to out-of- and Sell 29 Rental Homes in 2 Days!
state investors. by Linda Pliagas
The company, which serves more than
200 clients and manages more than 650 in- outstanding views and plump pillows. In- where we have our own personal invest-
vestment properties for them, joined forces vestors traveled from 18 states to attend, ments,” Chris says. The Clothiers person-
with the San Diego-based FortuneBuild- one couple arrived from Canada. ally own more than 100 rental homes in a
ers, Inc., (owned by Than Merrill and the Most of the attendees were investors handful of quality, long-term buy-and-hold
“Flip This House” team) and wanting to learn how to be- areas of Memphis.
together they organize one of come Typical home prices range from $34,000
the largest property buying clients. Many were referrals to $85,000, rents average out be $850 per
events in the nation. from their existing client month. The city boasts high rents and low
“You’ll never see anything base, and some were repeat prices. But surprisingly, 48% of Memphis
quite like this,” promised customers. residents rent.
Kent Clothier Sr. during our “Our average client buys The Clothier family, who were formerly
telephone conversation a few four homes and refers us to in the grocery business, moved to Tennes-
months ago. Kent Sr. is found- all of their friends and fam- see because they saw such an opportunity
er of He ily,” says Chris Clothier, for long-term real estate investing and
takes the helm of the 18-team- director of sales and market- monthly cash flow.
member operation, which is ing. At the time, Kent Sr., Kent and Chris
managed by his three sons, pro- were scattered about, working in different
Kent, Chris and Brett. vides clients with an option of either buy- real estate markets (Texas, Colorado and
In my six years as an out-of-state inves- ing a turn-key rental home or one that needs Florida). Memphis real estate brought the
tor, I had never attended a property buy- rehab. The company oversees the work for family together. It’s an additional perk for
ing tour. Plus, I repeatedly heard about the investors. Each property has a separate proud papa Clothier. “I’m the luckiest man
the benefits of the Memphis market from quote for the renovation included in its pro- in the world to have my sons working next
many sources. I thought, ‘What a perfect forma profile. If the rehab goes over bud- to me,” Kent Sr. told the crowd that day.
time to put on my reporter’s cap and go get get, it comes out of the company’s pocket. On the first day of the tour, the investors
the scoop.’ caters to investors gathered to get educated on the local mar-
The Ultimate Cash Flow Buying Tour def- who are looking to buy in typical middle- ket, meet the Clothier family, and mingle
initely stood up to its name. Just being in a class areas. The company says they stay with JD Esajian from FortuneBuilders.
room filled with investors from around the away from crime-ridden pockets of the (The “Flip This House” team owns numer-
nation was electrifying. On the first day, the city, regardless of how the numbers may ous rentals in the area.)
event was held at a ballroom in the Hilton appear on paper.
Hotel, a circular 27-story glass beauty with “We only offer houses in the same areas Continued on pg. 58 PAGE 37 • 2010
Seeking Financing Interview and article
by Lori Peebles

for Your Next Deal? We’re looking for current

value as opposed to future
This California-based private value. Loans that need to be
based on an ARV or higher
lending company offers creative appraisal value won’t typi-
financing solutions in all 50 states cally work for an asset-based

lender. However, we do have
clients who are rehabbers
MG Capital, LLC, compared to a bank. who own other free-and-clear
an asset-based lend- With MMG Capital, property, they then secure a
ing company, be- no income verifica- line of credit with us for the
lieves successful in- tion is needed nor is purpose of purchase and re-
vestors need to have credit score or sea- habbing more property.
Chris Gleason
skin in the game. soning taken much
For that reason, they still invest company into consideration. The allure of their program
funds alongside those of their investors Recently, our editorial team spent time is that underwriting guidelines are not
who supply the private money used in their reviewing some of the company’s pro- based on the borrower’s credit, income or
operation. grams, which include private lending, trust seasoning, which truly opens up the play-
Both company and client assets have deed investing and unique investing vehi- ing field for many more investors. In real
grown significantly since their formation in cles, which offer short-term liquidity and estate transactions, time is truly of the es-
2007. In fact, the compa-
ny’s principals have been
responsible for the man-
agement of assets valued MMG Capital Funds Creative
at more than $6 billion.
Although MMG Capi-
tal is only three years old,
Investors Across the Country
the principals have over
50 years of combined industry experience; safety backed by real estate. sence, and Gleason explains how their pro-
their expertise includes banking, private We then asked Gleason to give us and gram can help investors move confidently
equity transactions, development, secured our readers a better understanding of how on offers and close quickly on deals.
lending, land acquisitions and sales. their services can help leverage the as-
From an investor’s point of view, one of sets of their clients so they can grow their We take a very common sense approach
the most impressive features of the com- wealth more quickly. to lending. Asset-based lending has been
pany is that they lend on a national scale First, Gleason gives us a glimpse as to around for decades, but it was largely
— most “hard money” firms keep close to who their typical “hard money” lending abandoned by most firms during the boom
home and rarely venture off into faraway client might be and shares some of the cri- years because anybody who could fog a
markets. teria they look for when funding deals. mirror could get credit. Now we’ve ar-
“We’ll go to all 50 states,” says Chris rived back to an old school standard where
Gleason, managing director of MMG Capi- We see a very wide range of real prop- we’re lending realistic amounts against
tal, LLC. He explains further, “There are erty investors who are looking for capital, realistic values and realistically taking
a number of markets across the country all the way from the most sophisticated into account the kind of trouble that our
where we’ve found the types of deals that investor down to the beginner. The inves- marketplace is in. It’s really a plus and a
we look for, and they tend to be in higher tor who makes the best candidate for an minus for investors – only those who have
value areas with greater demand.” MMG Capital Loan is the investor with solid assets are able to obtain financing
Currently, the states where MMG is the at least moderate real estate investing ex- and “nothing down” scenarios don’t ex-
most active are California, Florida, New perience and a substantial balance sheet. ist anymore. But, for those who have the
York and Tennessee. MMG Capital is an asset-based lender, so net worth to support an asset-based loan,
The firm’s success stems from their rig- we’re really looking for two things: hard there’s very little competition for them and
orous lending practices, Gleason admits equity and net worth. We can be a great they can align themselves with a private
that only one deal out of 75 makes sense for financing partner for a real estate inves- lender like us who will provide them quick
them to lend on. However, since they are tor who is doing significant business and capital based on their current equity.
an asset-based lender most investors have already has some substance to their bal-
an easier time qualifying for an MMG loan ance sheet. Continued on pg. 61 PAGE 39 • 2010

Veteran Syndicator Discovers
Golden Opportunities in California
by Lori Peebles

oodson “Chip” Philbin be- come about in everyday affairs. Routine His angel investor continued to be in-
gan his career as a securi- business connections can turn into friend- volved in projects with Philbin and togeth-
ties broker, but he soon ships, which can then evolve into joint ven- er they built a solid portfolio.
left Wall Street tures. That was exactly the “With him as my partner, I developed
to sell “tangible” investments. case for Philbin. His career three single-tenant NNN leased commer-
Fast forward 23 years later, as a commercial mortgage cial buildings, all leased with terms of 15
the Sacramento-based lender broker opened the way for to 20 years, in which I placed fixed-rate
and mortgage broker now has joint ventures with his as- permanent financing right after completion
a successful career as a real es- sociates and clients. and occupancy by the tenants.”
tate syndicator. “I was referred to a well- Long-term buys may be his strategy of
Many professionals are lured heeled investor by Comer- choice, but make no mistake, cash flow to-
into the real estate industry ica Bank, who owned day is the goal when Philbin and his inves-
with a hope of one day purchas- a high tech company in tors acquire a property.
ing the very object they sell. At Santa Clara and needed His success record is impressive. “The
first, Philbin, CEO of Philbin to refinance his plant. I ar- cash flow from this small portfolio is
Chip Philbin
Capital, wasn’t focused on his ranged the loan and didn’t nearly $400,000 annually, plus I was able
own portfolio as much as those hear from him for about to finance out almost all of our entire cash
of his clients. He was initially attracted to four years,” he recalls. But then one day, investment, so we have very little cash left
the business as a commercial real estate opportunity knocked. in these deals.”
lender and mortgage broker because it “He called me in to discuss another refi- The massive passive cash flow has been
made financial sense in contrast to the high nance, this time a cash-out refinance. We a blessing, but Philbin admits it made him
volatility of the securities market. did some analysis on how much he should a bit complacent. For the past several years
“At one of my previous employers, the borrow and I arranged another loan for he’s been working primarily on his handi-
management started a real estate investment him. At that point we decided to become cap at the Northridge Golf Club in Fair
trust, got it listed on the American Stock partners and to purchase cash-flowing Oaks instead of pounding the pavement to
Exchange, and raised about $100,000,000 commercial and multifamily property.” procure new investors.
to do mortgage loans. They went through The new partners joined forces and But now that his primary angel investor
the hundred million in about five years,“ he funds, which led to the purchase of a 72- is retiring, Philbin is actively recruiting
recalls. “Here I learned that one of the main unit apartment complex in Chico, Calif., a new investor partners who are interested
objectives of those that manage REITS is property they still own today. in commercial investment opportunities in
to generate management fees and not nec- When questioned about his transition the Northern and Central California mar-
essarily safeguard their investors’ money.” from adviser to partner in his dealings with ketplace.
That experience, along with his experi- clients, Philbin replies: “People have a real The company prides itself in investing
ence as a stock broker and other stories need for trusted advisers who are experts funds into every deal alongside the partner.
similar to ENRON, made Philbin wary of in their given industry. If you have a high He believes in full disclosure, low manage-
paper assets. He explains: “Stocks have degree of integrity and put your clients and ment overhead, and welcomes partners who
limited true inherent asset value contrary to investors ahead of your own interests, then are relationship-oriented and are seeking
real estate, which is tangible.” opportunities will present themselves.” long-term, tax-sheltered passive income.
Philbin, who was busy arranging funding Although rehabbing tends to attract the While profits and returns are what inves-
for multimillion dollar deals his investors spotlight in real estate, Philbin shuns those tors strive for, Philbin stresses that build-
were securing, did not stay on the sidelines quick-turn deals and prefers to invest with ing long-term business relationships is the
for long. “I formed a partnership with ten a five to seven year minimum holding pe- most gratifying aspect of the real estate
people I knew, and we made a hard money riod. Because of his mortgage background, business.
loan to a small grocery store north of Sac- when possible, Philbin prefers to refinance “I really enjoy people and enjoy the real
ramento,” Chip says. He adds, “We loaned the asset after an initial holding period so estate business,” says the 29-year industry
the owner/operator about $1,000,000 at that investors can retrieve their initial down veteran.
11% for two years. I had $100,000 in this payment, leaving little or no cash in the deal
deal and my investors provided the rest.” and magnifying returns. Philbin is partial to For questions regarding commercial real
One of the benefits of working in real owning retail centers, single tenant NNNs, estate, contact Chip at (916) 961-6832 or
estate is the networking opportunities that multifamily and industrial properties. visit: PAGE 40 • 2010

Real Estate Investments/Partnerships
“[Chip] is unique in that he has true professional understanding of all key JXDUDQWHHV
He has been very open in his communications and honest to a fault in ‡*HQHUDO3DUWQHUKDV\HDUVFRPPHUFLDOUHDO
Chip Philbin 916-961-6832
Visit our website at PAGE 41 • 2010

Success and Happiness in Life
by Sam Sadat, founder of Los Angeles Real Estate Investors Club

A 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-
for a few more years,
but to benefit from it
new knowledge and

applications. Remem-
later when he worked for the
Atari Corporation. Thanks
to his modern dance classes,
he was able to calculate how
much resolution of movement
cause creativity is the stuff of life. That is a ber how our lives have was needed in their video
big reason, but there are other more reasons changed since the 9/11? games.
to consider. Another reason is change. We Well, the business rules The real estate entrepreneur
all know the only constant in life is change, of engagement have Frank Morrow explains that
albeit we tend to resist change. (In fact, the also changed drasti- he got his entrepreneurial
only person I know who likes “change” is cally. Real estate has education while attending the
a wet baby.) taken the biggest blow, graduate school of business at
When things change, new information and as usual, our gov- Stanford. Although he took
emerges, which leads to a brand new set of ernment’s answer to every problem is more all the required courses in marketing, fi-
problems. It’s proven time and time again regulation. In contrast, I advocate educa- nance and accounting, he said. “I learned
that it’s no longer possible to solve today’s tion over regulation. But you can’t find more about business from a drawing course
problems with yesterday’s answers. So you that kind of knowledge in any accessible than anything else. My teacher taught us:
have a decision to make: You can either or even comprehensible fashion in our bu- ‘All art is a series of recoveries from the
complain about how difficult things have reaucratic system. first line. The hardest thing to do is to put
become or employ your creative juices to To obtain this kind of knowledge required down the first line. But you must.’ The
come up with new ideas, new solutions, for prosperity, you need to attend and net- same is true in business. You must act. A
work in real estate meetings lot of business school-types analyze things
and seminars. Venues such as to death and never get around to acting.
Socrates once said: our real estate club, Los Ange-
les Real Estate Investors Club
Perhaps more of them should take drawing
“An unexamined life (LAREIC), will provide you
with the new knowledge on
I believe your mindset is more important
than nuts and bolts. We have plenty of real
is not worth living.” how the game is being played
now. Once you know what’s
estate knowledge at our monthly meetings
and seminars to arm you with helpful tools
working in today’s market, to succeed in this market. But I challenge
and new paradigms. you’d be able to further develop your cre- your beliefs relative to success. Remem-
This economic turndown has vastly influ- ativity and capitalize on it more effectively. ber that unless you break with the old,
enced our lives in recent years. It has forced Without this new information, you’re lim- you won’t let in the new. In other words,
us to stop and examine our lives. Socrates ited to old solutions, which are ineffectual Light (education, abundance and love)
once said “an unexamined life is not worth in our fast-changing world. won’t come into your life until you show
living.” So, I think this recession may ulti- I believe there are ways to enhance your the courage to literally kick out Darkness
mately prove to be a good thing because we creative powers. Here are a couple of sug- (ignorance, scarcity and fear.)
are learning valuable lessons. What would gestions from two highly successful peo- So expand your horizons, step outside
make it even better is if we further examine ple. of what’s considered normal, break the
our spending habits and reasons why we Steven Jobs was asked why some people boundaries of what seems reasonable, and
tend to live beyond our means. This kind are more creative than others. He replied, act upon your knowledge. There’s never
of introspection is needed if we are to attain “Innovation is usually the result of con- been a more important time in our coun-
financial freedom ourselves and to save our nections of past experience, but if you try’s history (or the world for that matter),
great country from becoming another great have the same experiences as everybody than the present. What we do today will af-
civilization that was. else, you’re unlikely to look in a different fect humanity and shape our future destiny.
To affect positive change we needed an direction.” For example, in college, Jobs So, let’s make it a good one.
impetus and we got one, the Subprime took modern dance classes to meet women.
Meltdown, the biggest economic downturn What he didn’t realize was how much he Kindest regards,
since the Great Depression (or as I call it, learned about movement and perception Sam Sadat —
the 9/11 of the business world). It is here in those classes, which came handy years Be sure to visit online: PAGE 42 • 2010

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
Bigger Better
by Kathy Fettke Deal
T rying to get
a good deal
in today’s market
individual investor
because the price tags
are much higher, but
can be frustrat- the deals are sweeter.
ing. It might mean For example, we just
making a hundred wrote down a $12.9
offers before you million FDIC loan to
get the one that $3 million on 27 al-
makes sense. And even if you most-finished water-front con-
have cash and will close “as dos in Portland. Investors will
is,” you still might lose out. make over 40% in one year.
Or you might end up with the This is truly the greatest
property and find out later you wealth transfer in history. Op-
paid too much or got stuck with portunities abound, and to-
a lemon. gether we can make it happen.
So how are the experienced Mistakes happen when inexpe-
investors getting deals with rienced people jump into some-
less effort? At Real Wealth Net- thing they don’t understand.
work, we have found the power That’s why so much wealth has
of numbers. Our teams buy in been lost over the past decade.
bulk directly from the bank. You don’t have to go it alone,
The banks love this because learn from the experts.
they can move more property Real Wealth Network brings
at once, even if it means slash- new and experienced investors
ing prices. In most cases, the together to share information
properties never make it to and learn from each other.
the open market before we’ve Our site has articles, videos,
hand-picked our favorites. It’s blogs, podcasts and downloads
tough for an individual to com- to help educate our members to
pete with a bulk purchase. make smart investing decisions
We also pool funds to pick during this once-in-a-lifetime
up almost-complete subdivi- opportunity.
sions or multi-family proper- For information, visit:
ties. Again, this is tough for the Alternative Economics™
Sales and Referrals since 2006

- S
CA nwide
e Club Launches in CA

by Linda Pliagas
alifornia is that owns a 112-unit apartment
Our Personal Team Can Help You one of the complex in Florida.
Start or Grow Your RE Portfolio most active Ritchie wholeheartedly
Sign Up Online for e-Mail Alerts! states for believes in the importance of
investors. Even during
Over $7 Million in Sales! this current economic
diversification and says others
feel the same way. “This breadth
We help clients every step of the way...
downturn, the state is of investment strategies attracts a
still a powerful economy much larger segment of my com-
We Even
You Manag p
in the global market. To munity,” he says. “Being built
After the
Sale! meet the demand for in- around Alternative Economics™,
vestor education, a new I am providing applicable eco-
investment club system nomic alternatives to help mem-
Owned by Linda Pliagas was recently launched bers develop their own personal
Her credentials include: in California by Roger system of financial growth.”
Landlord since 1994

Roger Ritchie Leads New Group

Licensed Real Estate
Sales Agent since 2000
Out-of-State Landlord
since 2004 - 5 States
Founder & Publisher of Ritchie, a Los Angeles-based real estate Through monthly meetings, Ritchie says
Realty411 since 2007 License # 01355569 investor and frequent club-circuit guest. CIEC will provide educational products
“I’m NEVER too Busy for YOU!” The Cerritos Investor Education Club, to educate investors about a broad range
310.994.1962 • founded by Ritchie, however, goes way of investment vehicles, both locally and
beyond the typical real estate club. The nationally.
Sign Up for VIP Listings @ financial education training is based on CIEC is now part of what makes up a
Alternative Economics™, a personal growing investor community known as the
system of financial growth education. It is National Strategic Investor Group (NSIG),

SAM GREEN Photography

designed to reveal hidden assets and apply whose clubs are based on the NSIC club
them to alternative investment strategies model.
using personal money rules that engage The NSIC is a company teaching invest-
Personal Photographic Artist four asset-acceleration principles, through ment and economic alternatives.
three financial growth stages. In addition to its readily applicable
Ritchie, who has regularly attended real financial education, NSIC provides
estate clubs for years, chose to align him- resources, products, services and oppor-
self with the National Strategic Investment tunities through local and virtual investor
Corporation (NSIC). His new club, the clubs.
Cerritos Investor Education Club (CIEC), Ritchie is excited about CIEC’s launch
is the first California chapter. Ritchie’s and he credits Hettema’s office with
“Take Care, Keep Smiling” goal is to form a club with diversified providing him with the tools needed for an
investment strategies to provide his mem- association to succeed.
bers with “alternative investment strate- “ Not only does NSIC provide me with
gies, not just real estate,” he says. all the resources to start and manage
Ritchie has spent a lot of time and my club, but the NSIC model shows me
resources in developing his investment exactly how to successfully establish my
game plan. He is a David Lindahl graduate club step by step.”
and also learns through the Joel Block’s To learn more about NSIC, visit online
* Headshots * Portraits * Personal Photo Shoots
syndication system. It is at Block’s event and download
* Boudoir Photo Shoots * Private Parties * Special
Occasions * Red Carpet Events * Children * Pets where he met NSIC founder, Steve Het- the free Alternative Economics™ e-book.
tema. Ritchie is also a member of All For information about CIEC, contact:
(310) 947-6261 Cities Network, a collection of networking Roger Ritchie, Club Leader of the Cerritos groups. Currently, Ritchie is managing Investor Education Club, (714) 793-3167, partner of an investment syndication group PAGE 46 • 2010
Triple Net Houses, pg. 9

They pay no expenses. If they

finance the house for example
News about Julian’s NNN
model has spread quickly large-
at 5.5% or 6%, you’re going to ly through referrals and online 7+(62/87,21 727+()$,/,1*75$',7,21$/
get that spread using the bank’s connections. “We have a blog, ),1$1&,$/3/$1,1$0(5,&$
money. If you buy a house for we do webinars, we do confer-
$60,000 and you put down ences just like your magazine.”
20%, $12,000 on the $48,000 Now that Julian has estab-
you’re borrowing, you’re going
lished his NNN presence in
to make 3.5% but that’s not us- the investment market, his new
ing any of your money. You’re goal is to expand conserva-
not making 3.5%; you’re mak- tively. He explains: “We want 16,* ZKLFKDWWUDFWVDQGHGXFDWHV
ing an infinite return. It’s the to grow fiscally responsibly. SDVVLYH LQYHVWRUVLQ$OWHUQDWLYH
bank’s money. Now you’re go- This year we’d like to do about (FRQRPLFVŒ $( 
ing to get 9.1% on the balance, 120 houses, about 10 a month.

“This year we’d like to do about

120 houses, about 10 a month.”
for a total return of 17%.” We’re not quite at that target
Obviously, a lot of planning but we’re real close. It’s grow-
went into Julian’s investing ing in the right direction. Next
modes. His personal experi- year we’d like to do 150 to 160
ence as an investor started in houses.”
1975, and he’s been a real es- As they continue to grow
tate broker since 1979. Born in and prosper, Julian expressed
New York City, he moved to his thoughts about expand-
Dayton with his parents while ing to other locations or cities.
he was in high school. He later “In another year or so we plan
attended Wright State Univer- to move to Cincinnati, which
sity. Julian has been married would be the logical city. It is
for 36 years. His wife is a re- about 50 miles south of us with $/2))
tired public librarian who still &,
similar demographics.”

substitutes when needed. They In real estate investing, slow

have one son, Paul, who is 26 and steady wins the race, and
and is trained as a chemical en- Triple Net Houses would win
gineer. the Innovative Risk Reduction
“But guess what?” Julian Award if they were to establish
asks, and proudly replies: “He’s one in our industry.
working for us now as an op- 6LJQ8S)RU2XU0RQWKO\
eration’s manager. It’s a family For more information, please 0HHWLQJVLQ&HUULWRV
affair.” visit DQG5HFHLYHD)5((





any Investors gamble to invest, Woo says he bases his compa- the CEO of ER Real Estate Investments.
their financial future ny’s approach on solid, factual data. “Our Reynolds purchased her first rental at age
and retirement dreams team constantly seeks out markets that 24 for $10,000 cash. Since then, she has
on capital appreciation. can weather the storm based on strong job been involved in numerous transactions
Michael Woo, chairman growth and economic or population expan- and she is also currently an out-of-state in-
of Longfin Investment Solutions, thinks sion.” vestor. Reynolds enjoys assisting others in
that is unwise. “It’s time to get paid month- Woo began his career as a real estate also maximizing their potential through the
ly instead of gambling on a 20-year pay investor in 1995. Before eBay was ever in purchase of passive income real estate.
out,” he says. the picture, Woo sold and marketed collect- “My core belief is that real estate creates
As chairman of Longfin Investment Solu- ible toys as a way to raise capital for his wealth, and wealth is effectively amassed
tions (LFI), Woo created a turn-key invest- first investment. In two years, Woo raised through real estate acquisitions,” she says.

Stop The Gambling!

Why Bet on Future Appreciation When You Can CASH FLOW Today?by Lori Peebles

ment system for investors who seek cash $50,000, a down payment for his very first Both Woo and Reynolds have great na-
flow in emerging markets. “Our properties property. Since then, Woo has been in- tional resources accumulated from years of
are totally rehabbed, with existing property volved in hundreds of transactions. personal relationships, which they pass on
management, and often His skills in to their clients. They also have established
already have renters in Mike Woo with “Rich Dad, Poor Dad” the industry did relationships with private equity lenders
place,” Woo says. “Our founders, Robert and Kim Kiyosaki not go unnoticed. for financing. “Lending is not a problem
average NOI (Net Op- In February, Woo for LFI and we do not want financing to be
erating Income) rate of was honored as the reason you do not take action toward
return is between 25% the recipient of investing,” says Woo.
to 36% ROI (Return Rich Dad edu- LFI also created an affiliate marketing
on Investment) with cation’s Hall of partner program, which offers profit shar-
10% to 12% cap rates. F a m e Aw a r d , ing.
Erica Reynolds
Why wait for tomor- presented by Reynolds ex-
row when you can cash “Rich Dad Poor plains, “Being a
flow today?” Dad” author marketing partner is
An avid fisherman, Robert Kiyosaki. a great way to join
Woo, who is a native Woo was hon- the team and partici-
of Southern California ored for his role pate on many great
and graduated from Torrance High School in increasing financial intelligence. In ad- deals. As a market-
and San Diego State University, named the dition, he was acknowledged for dedicat- ing partner, we offer
company Longfin to commemorate a fish- ing his time to helping others improve their great referral fees,
erman’s special name for the albacore. own lives. equity partnerships
“Albacores are renowned by sportsmen all “We teach real estate investing funda- and other benefits.”
over. They are a much sought-after game mentals, including having the right mind- Lately, Woo and Reynolds have been
fish with attributes of being fast-moving set and goals,” Woo explains. “We want to busier than ever attending many network-
hunters that operate together to achieve make each investor a better person and ex- ing events and also hosting their “Stop
goals,” he explains. tend their investment dreams further than the Gambling” seminars for the public in
Woo’s individualism also positively im- they could have ever imagined.” Southern and Northern California. LFI is
pacts his investment philosophy. In addition, Woo says they teach inves- also organizing investment road trips to In-
For example, while many investment bro- tors to understand demographics, locations, dianapolis, one of their target markets.
kerages only deal with one specific type cash flow and ROI.
of property, such as single-family homes, Recently, Woo expanded LFI and added To learn about the “Stop the Gambling”
Woo’s investment strategy is to find deals a dynamic partner: Erica Reynolds. She educational seminars, contact Longfin
across the entire market spectrum. has been appointed as vice president and Investment Solutions at: (949) 388-0678.
Instead of letting headlines predict where marketing partner. Additionally, she is also Visit LFI at: PAGE 51 • 2010

Short Pay
The Solution for Homeowners who
have Underwater Mortgages
by Shahid Habib and Ketan Naran

Shahid Ketan
omeowners  all
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, up-front fees to homeowners. It
there is hope through an option offers a solution for both banks
known as short pay refinance, as well as for the homeowners.
which is a great solution for The homeowners get to keep
them, if they qualify. their home with a lower princi-
According to a report pub- pal balance and lower monthly
lished in May 2010 by First mortgage payments more in
American CoreLogic, a real es- line with the current value of
tate information company based their home, and the banks get a
in Santa Ana, Calif., “more than chance to “clean-up” their bal-
11.2 million, or 24% of all resi- ance sheet by getting a property
dential properties with mort- completely off their books.
gages were in negative equity Banks are becoming more
at the end of the first quarter willing to accept a short pay
of 2010.” Out of that number, refinance especially if the bor-
in California alone, more than rower is current on their mort-
2.4 million homes, or one third gage but is experiencing some
of all mortgages, have negative type of short-term financial
equity. difficulty or the interest rate on
The underwater mortgages the borrower’s current loan is
and negative equity pose a about to increase.
roadblock to a housing recov- A short pay refinance also
ery because the underwater provides the bank with an infu-
mortgages are more likely to sion of “cash,” which increases
fall into default leading to a po- their ability to invest in other
tential foreclosure by the bank. opportunities or to lend out.
Most banks have already been Banks are in the “lending”
taking big losses on foreclosure business and not the real estate
and short sale properties and business.
are considering other options Unlike a loan modification or
as well. a short sale, which sometimes
Short Pay Access, a company requires a borrower to be delin-
based in San Ramon, Calif., quent on their mortgage pay-
is able to help homeowners ments, the short pay refinance
anywhere in the U.S. through program follows standard lend-
the best short pay refinance ing guidelines and only works if
program available today. The the borrower has a clean recent
company does not charge any mortgage payment history.
1. The mortgage needs to be their home with a new lender at
more than the current market
value of the home.
the current market value.
The Short Pay Access team
Do You Feel
2. Borrowers need to be current
on their mortgage – no late pay-
consists of experienced nego-
tiators who have carefully built Trapped by Your
3. The borrower’s credit score
working relationships with
lenders. The negotiating team Current Mortgage
must be 620 or better.
4. They must have verifiable
is well versed in the lender’s
requirements and preferences and the Loss of
Your Home's Value?
income. and uses this experience to help
5. The prop-
erty must be
the borrower’s Let us help you
primary resi-
dence. 'Short Pay Refinance'
Short Pay a new option with
Access works
with the lender NO Upfront Fees!
in order to complete the short the homeowner without wast- (This is not a loan modification or a short sale)
pay refinance and gets the lend- ing any time dealing with un-
er to write off a portion of the knowns.
loan amount. A short pay refi-
nance gives homeowners the
ability to refinance their homes For more information, contact
at the fair market value. The Short Pay Access online at
process involves paying off the or
current lenders loan at fair mar- call (925) 309-6109 for a no
ket value and then refinancing obligation free consultation.

It could help you to

Keep your home
Lower your principal balance
Lower your monthly payment
Eliminate Negative Equity
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!
Contact us today to
An aggressive investor should find out if you qualify
be making at least 10 offers a
day or 200 offers per month.
How do you compare? Well,
then please don’t complain www. Short PayAccess
Pay Access .com
that you can’t land a deal! PAGE 53 • 2010
tional roadblocks, such investors annually, he says they can deliver
as the number of existing properties at deep discounts.
mortgages one has, or a Additionally, since Reedy knows that
lack of seasoned funds cash flow and built-in equity at purchase are
or less-than-stellar credit primary components of a great investment,
scores are simply non- he says they “are willing to leave enough
issues with their private profit in the deal for the client to have great
financing program. cash flow and success, which leads to re-
by Linda Pliagas & Lori Peebles So what’s the catch? A larger-than-normal turning clients and more business.”
downpayment for a residential purchase is To handle the management of his own

STOP! Before you purchase

that shiny, new luxury
vehicle — the one that’s going to plum-
required (30% to
50%), which is ac-
tually a percentage
rentals, as well as
Craig Jennings and Jim Reedy. t h e b u r g e o n i n g
empire of his cli-
met in value as soon as it’s driven off the that is common these ents, which now
lot — think about buying a rental income days in commercial number close to
property instead. real estate transac- 1,000 properties,
That’s right, for about the same price tag tions. The property Reedy relies on his
as a 2010 Mercedes-Benz M-Class (MSRP: is then paid off in 60 staff of 15, which
$45,700), an investor can purchase a rental months (amortized includes four full-
property in Memphis, Tenn, instead. Plus, in seven years). In time leasing agents
they can pay it off completely in five years the meantime, in- and numerous
— the same time as the car. vestors can expect a independent con-
This turbocharged investing structure, bit of monthly cash tractors.

Keep the Older Car|Buy a Rental Instead

coined the Short Term Retirement pro- flow to help them maintain the property. In 2008, Craig Jennings was recruited
gram, is marketed by Jim Reedy, CEO of It’s a bullish investing program offering to handle investor relations. Jennings es-
Memphis Investment Properties, LLC, a easy terms and, best of all, no restrictions. tablished himself with Reedy as a talented
full service real estate investment broker- When Reedy found out about the pro- wholesaler, often providing Reedy with
age and management company. gram, which was developed by Robert outstanding deals for his clients.
Memphis Investment Properties (www. Feol, a local real estate finance expert, he Shortly after, the team was joined by Curt, found- knew he wanted his company to have ex- Davis, who is now a leading sales execu-
ed in 1985 by Reedy and his wife, Debi, clusivity. Reedy says the program was so tive for the company. Together they field
is an exclusive provider for the Short Term good, he wanted to keep it all to himself. requests and answer questions from in-
Retirement (STR) program in the Memphis Real estate has been Reedy’s passion and vestors around the nation, and even from
metro area. focus for 34 years. He majored around the globe.
The team relaxes after a meeting.
The most in real estate at the University When asked where the majority of Mem-
enticing as- of Memphis and has been sell- phis Investment Properties’ clients come
pect of STR ing homes since his senior from, Reedy quickly replies that most of
is the speed year. their investors come from the West Coast,
in which an “I fell in love with real estate California in particular. The East Coast also
investor can during college,” he admits. brings in a lot of activity. Tennessee is also
have their “The sky was the limit.” gaining popularity with investors living
rental com- Reedy says that from per- outside of the United States, as well as with
pletely paid sonal experience he knows recent U.S. immigrants. Reedy says lately
off, which investing in real estate is more he is seeing “lots of foreign activity.”
then maxi- lucrative than working as a For Reedy and his team, real estate in-
mizes cash REALTOR®. His family cur- vesting is not just a business, it’s a lifestyle.
f l o w. T h e i r rently own and manage an In fact, his wife, Debi, is chief operation
program also offers tremendous flexibility, impressive personal portfolio of more than officer, and one of Reedy’s five children
enabling people who normally would not 300 single family rentals. is also a top producer in her market in the
be able to qualify for a property a chance Because Reedy and his team are active
to build wealth by owning rentals. Tradi- real estate investors, servicing hundreds of Continued on pg. 62 PAGE 55 • 2010

by Crystal Han of 360 Investments™ | edited by Scott C. Seckel

Who’s On Your Team?

hese days with the current economic well-earned commission. available to your type of business.
and credit crisis, it’s not what you •A mortgage professional is essential. They •Get an insurance agent who will issue your
know, it’s who you know. 360 In- can be a direct lender, bank or mortgage policies for the best protective coverage in
vestments™ realizes that investing in real broker. Shop around until you find one who the state where you own real estate at the
estate is a team sport. That’s why we have can tackle creative ways to finance a deal. best prices. Always compare rates.
built local power teams in major cities Ask about their loan fees and programs. •A reliable general contractor will give
across the country. Having the right indus- It’s critical to find out about their qualifi- you work estimates and project bids. These
try professionals on your team will make cations, seasoning and percentage-down quotes are tools with great negotiating
all the difference in your investing success. requirements. power. Request a copy of their license and
Here is a list of important team members to These professionals can also lead you to check with the state board to make sure the
have on board: private and hard money sources. Always contractor is in good standing. Get plenty
•Get a mentor, with a proven track record, ask for a Good Faith Estimate (GFE) and of references and do not pay in advance.
who has successfully acquired the type of compare statements. Find out their average •Locate a certified property inspector who
real estate investments you want to have. time to fund and close a deal since time is will inspect your properties and provide a
money! detailed inspection report and photographs
•The right title, escrow or of their findings. The report can be used for
closing attorney, depending negotiating the purchase price. It can also
on the state, is your best be used as a walk-away clause.
friend. Interview several •Appraisers are priceless in this current
until you find one that un- market. They provide market values, com-
derstands unconventional parable sales, and draft up appraisal reports
ways to transact real estate on their findings. Please note, with the new
deals. Ask them if they are HVCC guidelines, lenders choose their
familiar with assignments, own appraisers when determining value for
double or simultaneous lending purposes.
closings. You want some- •Property managers and management com-
one who can draft up notes, panies are the key to long-term investing
deeds of trust or mortgages. success. Make sure to get lots of referenc-
Title representatives can es from other property owners. Review the
also provide you with ac- property management agreement carefully
cess to title reports, foreclo- and make sure you understand everything
sure listings, and farming clearly. Find out the management fee, ad-
packages made up of mail- vertising costs, service call fees, average
ing lists and labels for mar- turn-over costs, vacancy rates, eviction
keting purposes. rates, total number of units managed, num-
•You will need several at- ber of years in business, term of agreement,
Your local real estate investment associa- torneys on board, who specialize in differ- monthly statement schedule, online system
tion, abbreviated as REIA, may be a good ent areas. Engage an asset protection at- accessibility, and direct deposit options.
place to find a mentor. Make sure you con- torney who understands entity formation, a Always retain copies of lease agreements
tribute to your mentor if you are not pay- local real estate transactional attorney who with tenants. It’s your job to manage the
ing for their time to teach you and take you can review your contracts, and an estate property manager!
under their wing. planning attorney to pass your inheritance •Last, but certainly not least, get an ac-
•Find a REALTOR® who can give you in- on to your heirs without costly and time- countability partner and a local network of
formation about the local market. consuming probate proceedings. investors who will provide you with ongo-
A REALTOR® can provide you with •Real estate investments offer huge tax ing support and updated information on
comparable sales (COMPS), current mar- benefits. It is important to get a highly other industry professionals, the markets,
ket values, average days on market (DOM), qualified tax professional, a certified pub- and other investment opportunities.
appreciation/depreciation rates, and other lic accountant (CPA), or a tax attorney who Building a profitable real estate invest-
valuable information. Provide leads to your understands the tax codes. Choose a pro- ment portfolio takes a strong team, and
REALTOR® by sending potential clients fessional who also invests in real estate. more importantly, a great team leader who
their way and make sure they receive their They will know the maximum deductions selects the right team members! PAGE 57 • 2010

The Ultimate Cash Flow Buying Tour, pg. 37

The Clothiers discussed their own per- about $350 monthly. very first day of the tour.
sonal story of their quest for passive income The elegant banquet room where the Kent Sr.’s luring promise that I would
and presented their research on the market. education took place was filled with many never see anything quite like this proved to
Then they introduced the members of their Californians like me, including a young be true. The action that was taken on that
team. After a brief networking break, they couple from Burbank who rented a rec- day was mind-blowing. A total of 29 homes
passed out a large, white sealed envelope reational vehicle and drove nearly 2,000 were sold, all sight unseen. I was captivated
with the information everyone was waiting miles to buy a property in Memphis. by the volume of deals done as well as the
for: The Deals. “We left on the Fourth of strategies they spoke about, such as their
Guests were more than July and plan on touring dif- guerilla-marketing leasing system.
eager and ready to buy a ferent cities for two weeks Here is the creative way they fill vacan-
cash flow property based after this,” Declan and Shaun cies: hires multiple
on an address, a photo- Hoare said. The new investors leasing agents on commission to show and
graph and numbers. Most purchased a three-bedroom, rent out their client’s property. A total of
rental homes cash flowed two-bath brick home on the four signs are placed on the lawn, each with
Guests listen to Kent Sr. 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 first 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
AUGUST SCHEDULE system on the second day of the tour. On
that day, we hit the road on two buses and
August 4, 2010 August 24, 2010 saw numerous sample properties.
6:30 to 8:30 pm 6:00 to 8:00 pm We saw houses in all states of renovation,
Pasadena Library Valencia Library from the stinky and messy to the shiny and
285 E. Walnut St. 23743 West
Pasadena, CA 91101
fresh. The rehabbed homes featured hard-
Valencia Blvd.
Valencia, CA 91355 wood floors, soothing earth-tone colors,
August 5, 2010 new tile and new countertops. The quality
6:00 to 8:00 pm August 25, 2010 of their remodel is a testament to Kent Sr.’s
Torrance Library 6:30 to 9:00 pm perfectionism and attention to detail.
3301 Torrance Blvd. LA Real Estate After attending the tour, it became clear
Torrance, CA 90503 Investors Club that I was in the middle of one of the best
Beverly Hills
August 10, 2010
investing markets in the country, and in the
Country Club
5:30 to 7:30 pm 3084 Motor Ave. presence of industry leaders. If your goal is
Angela Iacobini Los Angeles, to purchase a quality rental in a burgeoning
Library CA 90064 market and have it managed by a proactive
4900 Clark Ave. and creative team, then be sure to pencil in
Lakewood, the next The Ultimate Cash Flow Buying
CA 90712 Tour on your calendar.

Don’t Miss the Next Tour

* September 24 & 25 *
Space is Limited, Reserve Early
1-877-773-9998 or 1-901-751-7191
or PAGE 58 • 2010

A Visit to 12 Rounds, pg. 30 Secrets from Sensei, pg. 30

More recently, an out-of-town owner of #4: Attorneys and Paralegals: Be

a vacant home began to receive citations sure to market to lawyers who spe-
from the city due to the blighted condition cialize in family law, estate planning
of a property she owned. The woman no and probate. Also, don’t overlook
longer had a need for the home, which had paralegals who can be a wonderful
been broken into and vandalized. Instead source of leads.
of having to pay additional fines or incur
#3: Your Target Zone: For maximum
a large expense to fix the abandoned prop-
success, farm your area just as a
erty, she opted to sell “as-is” to Sensei at a
REALTOR® would. Posting signs
45% discount, and Sensei flipped the prop- around your farm area, as well as
erty using a double-close technique to a displaying a clever advertisement on
rehabber. Sensei used no money, no credit your vehicle, can lead to success. Expertise:
and no loans, just pure wholesaling. Retail
Yes, a profit (typically larger than most #2: Make Many, Many Offers! An ag- Foreclosures
real estate transactions) will be made for gressive investor should be making Short Sales
wholesaling a property as it should be. An at least 10 offers a day or 200 offers Agreement for Deeds
per month. How do you compare?

Wholesaling #1: Piggyback Your Deals: Don’t be REOs

afraid to partner up and share your Auctions

“does not require deals with other wholesalers. The Subject-to

more wholesalers in your database, Lease Options

cash, credit or a the easier it is to share buyers and

sellers. Don’t be greedy and dishon-

license, which
6601 Owens Drive, Suite 245
est. Remember: Your reputation is
Pleasanton, CA 94588
more important than money. Once

equals NO RISK.” tarnished, it seldom can be restored. Tel: 925-460-8255

investor is providing a creative solution to

the owner of a distressed property and/or Millions of Opt-In eMails Available “Obstacles are the things we
the owner may be distressed. Having a dis- The Largest Industry Database is Here!
see when we take our eyes off
tressed situation creates an opportunity for 310.439.1145 |
the investor to help and profit as well. Serving Companies Since 2007 our goals.” -Zig Ziglar
Sensei reminds his devotees that in to-
day’s flooded foreclosure market, whole-
saling is a service that is needed more than
ever. Sensei’s mindset of placing people
before profit is the philosophy he carries
with him when he approaches any deal and
in his own dealings with people.
“Help first,” he stresses, adding, “You
will be blessed with rewards later.”

Keep the Flame Burning!

Log On to Realty411’s VIP Network
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Questions? Call: 310.499.9545 PAGE 59 • 2010

David Lindahl, pg. 7 Knowing how to invest in apartments from taking advantage of the huge money-
without personally dealing with tenants is making potential that apartments hold.
them deals). I learned what they were look- essential to becoming a multimillionaire Misconception #1: Small investors
ing for in a property. And whenever I found investor. should start with single family homes be-
something in common among investors, I I never deal with tenants personally. I cause there’s less risk.
knew I was on my way to developing a sys- never personally fix leaky faucets. I don’t Apartments can be the safer way to get
tem for creating wealth with real estate. mow lawns. I turn all the landlord duties started. If your tenant moves out of a single
My first building was small three-unit over to management companies. A good family house, your property sits empty. The
flat. But it was a “profit snowball” that put management company makes you money mortgage isn’t going to stop until you find
everything in motion and would lead to an and should be viewed as an income genera- another tenant. However, if a tenant moves
avalanche of income. tor, not as an expense. out of an apartment complex, the income
Within six months I had nine proper- Today I control over 7,400 units. That’s continues to flow from other units.
ties. At the end of my first year, I owned 7,400 checks from tenants. My monthly Misconception #2: Apartments are more
11 small apartment buildings, giving me a cash flow is greater than what many people difficult and time-consuming than single-
positive cash flow of $9,700 per month. I make in a lifetime. family houses.
was motivated! But I almost never got started because Think of it this way… does buying a
of a few misconceptions that most newbie Porsche take exceedingly longer than buy-
Millionaires Are Not Landlords investors face. ing a Kia? No. It’s the same basic process.
It surprises some people when I say that With apartments, you use largely the same
my key to moving into the major leagues of 4 Misconceptions That Can methods as with single-family homes. And
real estate investing — what skyrocketed Cost You Millions where there are differences, I’ve developed
me from owning just a handful of small Some notions about investing in apart- systems that clearly spell out what needs to
buildings to controlling more than 300 ments are as outdated and flat-out wrong as be done and when.
properties — was my decision not to be a thinking the world is flat. Yet they continue Misconception #3: You need stellar per-
landlord. I would do no “hands-on” work. to hang on and stop thousands of investors sonal credit and high income to buy apart-
ment houses. most every month. My systems

Investment Tools
When you buy apartment are proven to build, protect,
houses, lenders focus on the and ensure wealth — and I’ve
cash flow of the building, not grouped them in a one-stop

Proven to Work!
your personal income stream. program called Apartment
If you find a building with a House Riches.
strong positive cash flow, a I’ve made it simple for al-
building that pays off the loan most anyone to use my strat-
without relying on you, then egies to find properties and Rental Property Analyzer is a great piece
you have a the foundation of vi- structure wildly lucrative deals. of software designed to eliminate the
able deal. The math is not com- You have a roadmap for mak-
plicated. I’ve created a work- ing buckets of money in today’s
guess work out of purchasing property
sheet that lets me know within market just as I do.
seven minutes if a property is a
viable investment — so simple Apartment House Riches
a fifth grader can do it. In your community right now
Misconception #4: Investing there are apartment buildings
in apartments means dealing rich in income potential. My
with tenants. Apartment House Riches pro-
It has been years since I gram shows you how to find
spoke with any tenant. But them. It gives you proven strat-
you don’t want to replace one egies for making money hand
headache (dealing with tenants) over fist.
with another headache (dealing To preview this exclusive
with ineffective management program visit www.rementor.
companies). So I created a pro- com/realty411.
cess that allows me to “manage
the manager” effectively and
profitably. Dave Lindahl is the author of
several top-selling books in-
Strong Systems Make cluding “Commercial Real Developed by the
Strong Investors Estate Investing 101,” written founders of
Only take advice on invest- with Donald Trump. For more,
ing in apartments from some- information on his authorita-
this software tool:
one who is making millions tive master course, Apartment
of dollars practicing what they House Riches, please visit: •Takes the guess
preach. I buy apartments al- work out of buying
•Compares multiple
MMG CAPITAL, pg. 39 properties at once for quick best-buy decisions
of our terms are between 12 •Accounts for hidden costs to prevent
Whereas the majority of and 36 months. costly rehab surprises at the end of the job
banking institutions sell their •Provides estimate of current property
notes, the company typically With their flexible lending
holds all of their notes until practices, based on the under-
value based on the condition of property
maturity. writing decisions of real people •Provides solid repair cost estimates
MMG Capital prides itself not computers, MMG Capital for renovation projects
on doing business differently. is weathering the storm that has •Supports up to 20 financial options
However, Gleason says the cost slammed America’s real estate
for comparison purposes
of their private money is com- sector, unleashing a tsunami of
parable to that of most other bad debt. In fact, the California •Has charts, graphs, and tables for cash flow
private money lenders. company has grown stronger analysis and future profit projections
during this turbulent season. •Projects the After Repair Value of a property
Nowadays, investors can based on size, location, and rehab work
expect a total cost for a loan For more information about
to be in the neighborhood of MMG Capital, LLC, visit their Invest In Your Business, Invest in Your Future,
anywhere from 15% to 20% two websites: For borrowers:
per annum, that includes the
cost of interest and fees. Most; Investors:
Invest in the Rental Property Analyzer PAGE 61 • 2010
Short Term Retirement, pg. 55
Complete Property Improvements state of Georgia. Reedy and his wife have
been married for more than 30 years and
We Put the ‘DO’ in the ‘Honey Do List’ are both native Memphians.
They say they’re fortunate to live and in-
vest in Memphis for several reasons: “We
Services Throughout Southern California To: have low price points and high rents per
Property Managers • Landlords • Bankers • Home Owners square feet. We are a slow-growth city, we
• Retailers • Real Estate Agents • Commercial/Industrial don’t have major swings in the local econ-
Historically a trading center for cotton
877-486-6239 | and hardwood, Memphis is now headquar-
ters for major manufacturing, services and
Painting • Garage Doors • Flooring • HVAC • Framing • Board Up other business sectors. The city is home to
three Fortune 500 company headquarters:
• Patios • Kitchen & Bath Drywall Service • Carpentry • Window/
FedEx, AutoZone and International Paper.
• Landscaping • Texturing • Main- Service Replacement Memphis’s economy is diverse. The area
tenance • Pluming • Lighting • services include: banking and finance (First
Electrical • Handyman Services Willie Jenkins Tennessee, National Commerce Bancorp,
General Contractor LIC # 913123 President Union Planters); real estate (Belz Enter-
prises, Boyle Investment Co., and Weston
Co.); nonprofits, including the world’s
largest waterfowl and wetlands conserva-
You’veHeard ofModel
Heard of Model tion organization (Ducks Unlimited); and
HomeLease Backs…
Lease Backs… a restaurant chain (Backyard Burgers).
Science and technology are strong local
Now learn about the best lease back program in the industries too. Memphis is also considered
country, health care lease backs! a Mid-South retail center and an attractive
tourist destination.
Earn a 25% cash on cash return per year PLUS a 2 With so many positive attributes, Mem-
year exit strategy that pays a bonus of $30,000, for a phis is definitely commanding the attention
total two year return of 85% secured by real estate. of investors around the world.
Call or email for our no obligation fulfillment kit. So now that the word is out about the Short
Term Retirement (STR) program, don’t be
877-730-7830 or 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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310.499.9545 |

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