Real Wealth for Living Well... Building your Real Estate Investing Lifestyle.

2008-06-25T11:17:00.000-07:00

Did You Miss Out, or What?!

My brain is fried. I spent Friday, Saturday and Sunday revealing everything I could about real estate investing to my mentoring students. Friday we went over all of the new laws and the current state of financing for real estate investors and how it can impact buying and selling decisions. One of my attorneys and one of my mortgage brokers came and helped us work through the impacts to our business.

Saturday we talked exit strategies and systemization of the selling process. We had a working lunch where we dug into Dan Kennedy’s Renegade Millionaire Mindset and what a Renegade Millionaire does differently than most business folks. That afternoon we heard presentations from three Renegade Real Estate Warriors from right here in the Seattle Area that are out there doing things differently. Their business philosophies and operations were really “Out There” in the best way possible.

Paul Awarding Mike Sumsky the 2008 Seattle Renegade Warrior of the Year TM Trophy

Mike Sumsky walked away with the trophy for the 2008 Seattle Renegade. He talked about the way he uses seller financing and how it has taken his business to the next level. He was voted by the attendees as having the best business model that was the most implementable for the group. You will be hearing more from Mike in the future.

Sunday we went into buying strategies and systemization of the buying process, finding money, syndication, and lending money securely. That afternoon Tim McNally, a friend of mine who is a Commercial broker, talked with us about commercial and why it is possible to start out in commercial investing first. You don’t need to start out in single family homes, rather move right into commercial or multi-family.

This training was part of our mentoring program. We allowed a few people who were not a part of our program to come to the training but they paid a premium to do so. Everyone was very satisfied with the education and the content. All of us walked out of there with a strategy to go forward even with the deck stacked against real estate investors.

I will tell you I was pleased as punch by the attitudes that the attendees had about the challenges that are facing us. Everyone of them were looking for the path to follow that was according to the new laws and yet still serve the community by buying houses from people that need to sell. It was great being surrounded by people with winning attitudes.

If you are not a part of this mentoring group you should be. It is unlike any other experience you may have had. The people are great. The information is priceless and the fact that I am the mentor is just a bonus.

The Premiere Real Wealth Round Table TM Mentoring & Mastermind Group

2008-06-19T11:19:00.000-07:00

Schools out for Summer or Is It?

Last weekend I was chaperoning my daughters ‘Sweet 16’ birthday party. We had 42 sixteen year olds at the Sheraton Hotel Ballroom. We did the light version of the MTV My Sweet 16 birthday party. Meaning that while we went all out, we did not go crazy. It was a party that she will always remember and we didn’t have to prepare or clean up only write the check. No, I did not trot out a new car or anything like that.

Everyone wore dresses or suits and everyone was on their best behavior. Evelyn and I had some friends there chaperoning with us. 5 other couples to be precise and the funny thing is we were all ex-military. So there was plenty of adult supervision. We had all been the mischievous kids so these poor kids were at a loss when they tried to sneak out for a breath of air. Rules were if they left the ballroom they could not come back.

We made the kids check in with us at the beginning of the night and check out at the end of the night. Parents had to come and get them before they were allowed to leave with the exception of the couple who had their license. We were very security and safety conscious.

Rachel had a blast and quite frankly so did we. She will have a lasting memory and was rewarded for being a good kid, hard worker and on the honor roll for the fourth straight semester. She will be working for us all summer saving money for college and to buy her car.

Why do I share this with you?

Frankly I am proud of my daughter and it is nice to be able to do something like this. I know that if I still worked for someone I would never be able to afford it.

Also to point out that even as kids we were always looking forward to the summer break but way before summer was over, some kids were looking forward to going back to school. I can’t say that I was ever one of them but I sure am now. I have a couple of bootcamps that I am going to be attending this summer as well as a mastermind meeting in Baltimore with Bill Glazer.

There are all learning environments that I am excited about being a part of. I make it a point to learn everything and anything that I can. So should you. Now that the kids are out of school take some time to relax but also to re-energize yourself with some education.

2008-06-11T12:23:00.000-07:00

Are You a “Get It Right” or a “Get It Right Now” Kind of Person?

Last night I did a training event with a several dozen attendees on the new Washington State Distressed Home Conveyance Act that goes into affect on June 12th. I was reviewing the law as well as a couple of other forces that are impacting the real estate economy.

I did my best to be clear and concise. As you know I am a glass half full kind of a guy, I look at things with adaptation in mind. I can roll with the punches. I guess I am like the old punching bag that always comes back up.

Afterward I was talking to a friend who was interested in my perspective on the law. He is a very smart real estate agent who has been in the industry for over 25 years doing Single & Multi family as well as Commercial properties. He asked me if I had reviewed the new MLS forms and asked if my broker was of the opinion that many brokers are. I told him, yes and no. Yes I was familiar with the new forms & No my broker was not as afraid as many of the mainstream brokers are.

He told me that many brokers are giving their agents advice to run away from any deal that may qualify as a Distressed Home Transaction. Do not list, do not sell, do not talk to these sellers. Now imagine life in this world? You need to sell, but you can not list. If you do happen to get your property listed, agents will not sell your house.

Holy Crap will the real estate market be in trouble. Imagine life where the only option is to sell at the steps. The prices will begin to plummet. The foreclosure rate will sky rocket. REO Properties will be the norm rather than the exception. Banks will start to be in more trouble.

Seattle has been spared the decline of some of the other big cities and hot areas. We have appreciation and still have a relatively decent sales cycle (days on market). If this is what the brokers are telling their agents guess what will happen. Hold onto your life preservers because we are going to need them.

Why pray tell, are the brokers giving this advice to the agents? LAWSUITS. That is right. They are afraid of the SHARKS that are going to be out there advertising to people that may have been in foreclosure or in bankruptcy who may have sold their property to an investor. They will then sue the investor hoping for a quick settlement as bribe money.

There are seminars out there training lawyers right now to do just this. Imagine when someone goes into a credit counseling office or bankruptcy attorney for consultation one of the questions will be did you sell your house to an investor because you were behind on payments or in foreclosure. Imagine how the conversation will go after that.

Why do I share this with you?

Two reasons:

#1 – If you don’t prepare yourself with proper entities and education you are going to be going down a bumpy road full of pot holes bigger than your car.

#2 – There is unprecedented opportunity coming our way. You have to put yourself in the right position to capitalize on it.

To be perfectly honest with you, I am absolutely excited about the opportunity that is here as well as the monstrous one that is coming shortly. There is a lot to be scared of but quite frankly only if you are ill prepared. I know that my mentoring students and I are going to be getting along fine. I am worried about those that do not have the education and support that are trying to go it alone.

2008-06-05T10:30:00.000-07:00

Wading through the Chaff to get to the Wheat

I was perusing the internet looking for the latest and greatest information on real estate markets. Looking locally, nationally and internationally to find the state of the real estate economy. I spent hours looking about a wide variety of topics from foreclosure rates, interest rates, days on market, sales price compared to list price. You name it I was looking.

I found information on how the Puget Sound area has been spared the foreclosure rates that most of the rest of the country has been experiencing. I was intrigued by the foreclosure bus tours that have been created in some of the hardest hit markets. Also, the property buying tours that are being led to Mississippi, Missouri, Alabama and Louisiana to take advantage of the tax deals that were created to spur economic growth.

There are a lot of things happening out there. Not just the typical buy and hold strategies, some creative, some traditional and frankly some pretty stupid stuff that borders on fraud. I am amazed sometimes at what some people will do with their money.

When you look at all the information out there you can not help but be overwhelmed. Imagine if you are a brand new investor trying to make money and are being offered some of these “Pie in the Sky” products and services. Some are truly scary indeed.

I am very involved in my local market. I invest on a daily basis. I know the new laws that are going into effect here in Washington. Yet I am hearing radio and TV commercials for national investing gurus coming into the market selling products about foreclosure and pre-foreclosure investing.

I know from experience that these groups are sending their top sales people in to do presentations. They are putting groups of 50 – 200 people in a room and selling them foreclosure investing education. I have no problem with that. I have been in the audience as well as on stage before doing the same thing. The problem is these new people are going to spend the money not realizing the new laws that are going to be in effect next week that will make what they are being trained to do useless.

If they go out and operate their business as they are trained to do, they will be setting themselves up for some hard times ahead. They are not going to be ready for the new laws. They will send marketing that causes them to be Distressed Home Consultants. They will not understand the full impact of that on their business.

If you know of a new investor, please let them know that they need to change the way they do business. They need to comply with the new law or they will end up paying for it in the end. Save their business and let them know they need to update their business before it is too late.

Being an investor entails risk by nature. Minimize it to the greatest possible extent through education and compliance. Balance the risk and reward rather than just gambling on making money without the proper preparation.

2008-05-28T08:47:00.000-07:00

Stuff Happens!

Have you ever had so much stuff happening in your life that you get overwhelmed? Have you thought things were going along smoothly and come to realize that things fall apart at the last minute? You know that I don’t agree with whining. That is why I believe in being a winner not a whiner.

It is easy to be a winner when everything goes well for you. When the stars are aligned and everything is right with the world it is easy not to whine. I was sent an email from someone who said something similar to me. He told me that it was easy for me to be a winner when everything is so perfect in my life.

If he only knew! Stuff happens to us all the time. Banks don’t return calls. Sellers back out. I make mistakes. Evelyn and I sometimes don’t see eye to eye and it makes for some tense times around the house and office. I get lazy and let things slip through the cracks. There are other things happen that are outside of your control. You name it. It happens.

The way you look at it that counts. It is all in your approach. Heck, my first instinct is to run for the hills. Get out of the line of fire. The problem is you can’t run away. That is the whiner’s way out.

How do I approach things to right the ship? I take a step back and breathe. Sometimes it takes a minute; sometimes it takes a day or more, never too long though. I then look at the big picture. How did I get where I am? What obstacles were there? What choices I made to scale those obstacles? What mistakes were made?

This can be scary stuff. Real stomach turning, acid producing examinations. I then look for the best way out of the circumstances. This can be costly sometimes, emotionally or financially. Either way it can hurt. This is where you determine if you are a whiner or a winner. The choices you make here is the key. I pray. He helps. Sometimes it isn’t easy nor what I am asking for. But in the long run He is right.

Stuff never happens one at a time. They usually come in twos or threes. You need to prioritize and attack them one at a time. Work as far as you can before going to the next issue. Sometimes they need to be done simultaneous rather than sequentially. Do whatever it takes to get through it. Just remember, there are always good times and bad. How you approach the bad times determines whether you are a Winner or a Whiner.

2008-05-21T12:43:00.000-07:00

When The Going Gets Tough, The Whiners Take Off?

As you know I am an avid reader. Usually 3 to 5 business books and at least 1 non-fiction book per month. I spend a lot of time catching up on the latest periodicals as well. So this morning I am up early and re-reading Gene Simons’ Book “Sex Money Kiss.” The man is a machine. A die hard worker and entrepreneur like you would not believe.

Reading his book, I was surprised he revealed all the things that didn’t go as planned. He used the word failed, but I don’t think so. He espouses what I call my “Triple F” strategy for success. Fail Forward Faster. Do something. Do it quick. Do it big. As the Nike slogan says – Just Do It! He tried so many things some worked, some didn’t; it is no wonder that he is so successful.

That is one of the things I like about so many people I meet. They are doers. They take action. They implement. Some have achieved their goals others have not done so yet. So what? They are going forward fast. That is the point. I don’t like Whiners. They spend their lives complaining. I like winners. They just go forward. Never looking backwards.

Jon Bon Jovi was interviewed on 60 minutes last Sunday. Jon and Gene have a ton in common. They are both business men first and rockers second. Anyway, the point is, while others in the industry have been worried about the trappings, these two guys have been busy making money. Compare and contrast that with most of their peers. Where are they now? What have they experienced in their lives? Fleeting Fame and Fortune.

I use these examples to illustrate what you can do as a real estate investor. Times, they are a changing. Laws are changing. Mortgage requirements are changing. Prices are changing. Days on market are changing. Buyers are not buying. But, hey you need to adapt to make money.

What have you done in the last 30 days to adapt? How have you made money doing the business of real estate investing? Did you notice how I worded that last sentence? Re-read it. I asked how you made money “Doing the Business” of real estate investing. That is the point. Doing the business of… “insert your business here!”

Last week I told you that I am in the process of making changes to my business. Consulting with multiple lawyers to adjust my business contracts and to help clarify what I can say to sellers and still be in compliance with the law. I am raising capital so that I can buy the houses at an agreeable price, for cash. I am changing my marketing so I do not get into trouble. Even rewriting scripts. Mainly adapting my business.

Most of the investors I spoke with are all freaking out. They are being Chicken Little. Pessimistic. I listened to one guy, who has never done a deal, telling two brand new investors that the real estate investing business is dead.

What service did this person do for these two novices? If I asked this guy he would say an unequivocal yes he helped them not make the mistake he made. He saved these people from loosing money on training and never doing anything.

After all, hadn’t he spent $1,900 to go to a bootcamp that didn’t help him make a million dollars in the next 90 days? After all, hadn’t he devoted two whole weekends in driving around looking for vacant houses and he couldn’t find even one. After all hadn’t he mailed out 500 postcards to pre-foreclosure properties and had talked to 4 sellers that wanted to stay in their house. He really worked this business. Ahh Bull S#!7

This guy was a waste of a chair. He attended meeting after meeting and didn’t do anything. If I had my choice I would have excommunicated him. You know like they used to do in the old west. Put a 2x4 across his back and tie his hands to it and make him walk into the dessert never to be heard from again. What he did was suck the ambition out of these two. I could see it in their eyes. They needed the spark rekindled. They needed to know they could do it.

I am not saying that this business is easy or cheap. (Notice the “B” word again.) You need to work hard and work smart to succeed. Anyone with the drive can do it. They don’t need loads of talent or charm, just persistence.

As mentioned last week I am holding a bootcamp on June 20-22nd on how to adapt your business to the new legal environment. It will not be cheap but it will be valuable. The most valuable training you could possibly attend this year. It is important that you reserve the time and the money to attend. If you are in Washington State it just may very well save your business. I will be sending out an announcement on Friday Morning. Keep a look out for it.

2008-05-14T21:32:00.000-07:00

Are the State Legislatures and Congress putting us out of Business?

There have been several laws passed with the hope of protecting consumers. Many of these laws have made doing real estate investing as a business more difficult. Here, in the State of Washington, there have been two laws passed in the last 10 months that have made it darn near impossible to buy properties from motivated sellers and then rehab them for sale.

There have been several in the last few years that have done the same thing. Texas changed their laws regarding Lease Options; South Carolina, Virginia and others made changes as well. Many other states are following suit. Most of them have been affected, if not yet, they will be soon.

What does it mean? What do we do? As a board member of the local non-profit REIA Group, we have been holding informational meetings as to how it will affect our businesses. We have had panel discussions with lawyers and great debate on the message boards. There have been a few lively whining sessions to say the least. People complaining that my business is dead now, they hit my pocket book. Now I will never _______! (Fill in the blank.) Wham, Bam, Thank you very much.
Whiners complain. Winners adapt!

How do I look at this? Well, last Saturday I hosted a mastermind session with part of my mentoring group. We read the law and determined what we could not do. We then determined what we must do. Next, we developed a strategy on how to proceed from here. Everyone in that room will be okay. We will be going forward positively. We will be able to stand out from the crowd because there are going to be so many people running away from investing; screaming that real estate investing will not work in Washington State anymore.

Bull Pucky! Take this Adversity and make it an Advantage.

What am I doing about it? I have an appointment with not one but with two different attorneys. I am changing my contracts, advertising and direct mail pieces. I am changing my scripts, website and voice mail. We have ordered new signs. I am changing my systems to adapt better to what we need to do to comply.

I am also creating a small bootcamp to train my mentees and a few select others in Washington to make this a positive thing. The law takes effect on June 12th. The bootcamp is June 20-22nd. My mentees and these few select real estate entrepreneurs will be ready to go with all the new contracts and marketing that complies with the law quicker than everyone else can.

It won’t be free but it will be worth many times the cost. There will be less than 50 people in the room so if you want to save your business quickly rather than flounder around for the summer, you will need to be there. Remember this is mainly for my mentoring students so more than half of the spaces are already reserved. Reply to this email if you want more information.
They will be ready. But will you?

In that light, I sent an email to you yesterday inviting you to a webinar on short sales with one of the best experts on the subject. (On a side note, I actually received an email from someone asking how I can host a webinar on short sales when the law in Washington actually outlaws it. First, I immediately took this whiner off of my list for stupidity. Second, short sales are not illegal. They are a tried and true tactic that is an essential part of our business. So don’t read anything into the law that isn’t there.)

Anyway, Lee Honish, who has been in loss mitigation and asset management for a top 10 bank for 21 years, will be talking about short sales that no one else follows. He will show you ways to get the bank to respond better than you can imagine. When Evelyn applied his tactics she received responses from previously indifferent or hostile loss mitigators that were unimaginable. It really opened up her eyes and changed everything for the better.

We will be chatting about short sales and Lee will show us the secret world of loss mitigators and why them asking for a big short sale package is just their way of pushing you around. Lee will reveal the 4 figures they are looking for and how, with just those four sets of numbers, you can get an approval from most lenders. I will also get him to show you the software he uses so you can see behind the curtain of the banks. Reserve your space for the webinar by visiting this reservation page.

Don’t be discouraged. There are many ways to accelerate your business. It only depends on your outlook. Take Action Now to change your results.

2008-05-07T13:55:00.000-07:00

Is Obama a Shoe In For The next President?

I typically don’t comment on politics, especially democratic presidential politics. But I was browsing the internet this morning for news and two things glaringly jumped out at me. The first headline I read was about the democratic presidential primary elections that were held yesterday in North Carolina and Indiana. And then there was the headline surrounding Fannie Mae having quarterly losses of more than $2 Billion with a “B” so far this year.

If you were to read the newspaper every day you would feel like you need to duck and cover because everything is going to hell in a hand basket. The economy is doomed and the gas prices are staggering. The grocery store is killing the American family by taking an entire paycheck to fill up a single bag. Life is tough and we should be prepared for things to get worse.

Where is my survival bunker? Boy, am I glad I still have 6 months of provisions put away from the Y2K scare. I will be okay. I just have to wait things out!

Is this reality for you? How about most of the people you know?

It sure isn’t for me. Sure I pull up to the pump in my Dodge Ram Pickup and it now costs $70 to fill up rather than the $55 it used to cost. I go to the grocery store and buy the same stuff I always have. It is right there on the shelf where it always was. Sure it costs a little more but it is still there. It is not being rationed.

Life in America is pretty darn good. We have to adapt to things tightening up and costing more. But when in life have we not had to adjust? I got out of bed this morning and had hot running water. I opened the refrigerator to cold milk and started the car without worrying about a bomb going off or getting shot at. Life is great!

I talked to one of my friends last week, actually an email. He is in Iraq flying Blackhawks. He is living in the life of a soldier. He is not complaining nearly as much as these privileged few who live here in the US of A. He was relating stories of the Iraqi people. How they are changing and adapting. Life is slowly getting better for them and they are working to make it so. Hell, our guys are working to make it so. We, here in the US, have it made. I have lived in or visited many countries around the world. Trust me, we have it made. I haven’t had to duck from sniper fire for a long, long time. Have you?

My advice to you is to stop whining about the economy. Stop listening to the news and the politicians who are stirring up problems to fit their agenda. The economy is going sour compared to where it was just a few short years ago. So What?

You choose how to live your life. Go out and make more money to cover the difference. If you think that you can’t then you haven’t been paying attention. We determine what we make and how we make it. Real Estate investing is just one tool to do so. There are many different ways for you to make money.

Frankly, it is all in your attitude as to whether you make the life you want and dream of. Like my mother use to tell me when I was a kid; “Paul, you are the sole determining factor of your success. If you want more, go and earn it. Get off the dime and do it for yourself. No one is going to give you what you want.”

So Get Off the Dime and Make It Happen!

2008-04-30T11:45:00.000-07:00

Laws, they are a changing. Are you sure… you are covered?

This is a long story but please bear with me; there is a point to it!

I received an email from an acquaintance that I first met at a real estate bootcamp a couple of years ago. Let’s call him Jack for the sake of anonymity. Jack attended this event and was a good student. He came home and began implementing. Life got in the way and he put investing on the sideline for a couple of years. He decided to begin investing again the end of last year.

Jack’s problem was he met someone who said that he was a real estate investor and would mentor him so that he would become successful faster. Jack decided that he would like to learn from someone experienced and so joined forces as a contract employee, talking to sellers and pre-qualifying them before his mentor would talk to them and buy the house.

A couple of months go by and Jack is working full time for this investor. Talking to sellers and establishing rapport with the sellers. Jack gathers all the information for the mentor and then goes with him to close deals. He knows enough about investing and creative real estate to know that something is just not right.

So Jack calls my office and arranges to talk with me about what is going on. My advice, after listening to the way this so called “mentor” was doing business, was for Jack to leave immediately and to pray that he does not get sued or charged with criminal wrong-doing. He then talks to his mentor and within two weeks terminates his relationship. Personally, I would have rather that he called and quit right then, but there were extenuating circumstances.

I heard from him later that his mentor and he have been sued and are being looked at for criminal prosecution. Jack found himself in the middle of a steaming pile of doggie do. He is going to be in for the fight of his life and the point is, he was trying to do right and really believed that he was helping people. The problem was that the mentor was not following through and as such put everyone in jeopardy.

Usually I let you figure out the point of my stories. I try to write provocatively that makes people think. In this case I want to just tell you straight out that Jack just paid the ultimate price for being cheap. He was trying to save money by working for someone for free to learn rather than paying for his education. Always a bad idea, you get what you pay for!

Saturday I was talking to someone at our monthly Cashflow 101 game. He asked me point blank why I charge for my mentoring rather than just having people do work for me. This is one of the reasons. The other is that I want people to have some skin in the game so that they will take their education and apply it.

I am proud of my mentoring students! They are great bunch of people and they are working hard to implement. I will always be there for them. I choose to work with these people because they have a desire to achieve and will work to implement it.

Now for my rant on these “be my slave, work for free” Mentors!

This so called “Mentor” should be taken out into the public square and whipped as well as put into the stocks. I am so livid that words can not describe my feelings. This idiot put his sellers, private lenders and others at risk.

He behaved fraudulently and should go to jail. Ignorance is no excuse. He was trying to be the big shot and rode high for a few months but the fall will hurt him badly. He deserves it. Anyone that makes promises they never intend to keep deserves everything that is coming to them.

“Be mindful with whom you associate, they may tell more about you than you would like to imagine!” - unknown

Another moral to the story is that you need to learn your craft well and do some research yourself to ensure the way you do business is proper and correct in your state and locality.

Dedicated to Multiplying Your Successes!

Paul

P.S. Laws are always changing. Keep on the lookout for them. Just in thess last 6 weeks there have been laws passed in 3 states including the State of Washington that need to be followed in order to stay legal. Read the paper and be a part of your investor association so that you will be kept abreast of the situations.

Caveat Emptor – buyer beware: Do your research on what you do as well as whom you learn from. I personally know of several so-called “experts” nationally as well as in my own backyard that are in business just for themselves.

Look to see how they profit on a deal and be skeptical, look to see how they stand to profit. If they are not getting money right upfront they are getting it from somewhere. Investigate for yourself. I love to help people but I am in business for profit. That is why I charge for my services.

2008-04-23T10:08:00.000-07:00

Multi-Family Investing GURU Rocked the House!

Last Sunday we hosted a full day of education with Apartment House Expert Dave Lindahl. I gotta tell you that we had a packed house. There were chairs lined up along the walls 2 deep on both sides. People began arriving an hour and a half early to claim the best seats in the house.

If you have never heard Dave teach before you need to make a point of going the next time he is near you. There is such a benefit to understanding market cycles and being able to figure out where to invest. Understanding these cycles is so important that I bought his bootcamp many years ago just for that little piece of the puzzle. That was so long ago that the home study course was on cassette tapes rather than CDs.

Some people have asked whom I learned my investment techniques from and I would have to say as many people as I could. Dave was one of the first, because he knows his stuff. I have taken his course and listened to the recordings many times. I did this even though I was a single family investor. When I decided it was time for me to move up to multi-family I dusted off the course and jumped right in. I didn’t miss a beat.

I am actually on an airplane right now heading to Boston to attend one of his bootcamps on investing and will be going to San Francisco next month to attend his Apartment House bootcamp again. I am going for a refresher to brush up on the things that are new and the latest trends in the industry. Well worth the time and the money required to do so.

I talked to many of the attendees this last weekend. Many were extremely worried of the state of investing in single family properties because of the new laws the state of Washington is passing regarding working with people in foreclosure. I know there are many people that are panicking because they don’t understand the new laws, how they are going to be implemented and enforced. The ambiguity is definitely a cause for concern.

Like you, I am anxious to find out how this will affect me. But I will tell you I am getting legal opinions rather than just listening to the hype that is out there. Listen to what a lawyer tells you and take everything else with a grain of salt. I have read the law. I know there is much that I will need to adapt to. My contracts must change and my marketing will change. But that is only pushing me toward multi-family rather than put up with these feel good, harm everyone laws that are being passed.

It is these times that the Winners will win and the Whiners will whine. Which are you? A Winner or a Whiner. Be a winner, invest in yourself and go out there and conquer the day.

2008-04-16T10:28:00.000-07:00

Ranting About Learning

I received an email this week about an online course I am teaching about Subject To investing. This person complained about me charging for a webinar series rather than giving it away. She said that the $497 was expensive and that the only way she would do it was if she did a deal with me and we split the profits and then she received her money back out of my end of the split.

I have to admit that it would be a great way to sell the product. But the point is that I would rather people be enabled to do their own deals rather than split one with me. I have made this offer in the past to my mentoring students, but they pay much more that $497. It is a great way for people to learn hands on.

I will tell you that I have a problem with her thought process on this. To her $497 is too expensive. It is not worth it for her to invest in her education so that she could learn a way to put Hundreds of Thousands of dollars in her pocket in the next couple of years. This really is limiting your thinking.

If you can spend a little tiny bit of money to learn something that will bring many multiples of that back quickly you are bound to fail. I have revealed that I have spent over $130,000 in real estate education over the last 5 years. I just came back from a super conference last week. I leave for another bootcamp on Tuesday and another three weeks after that. All to pick up just one or two things that I can apply to my business.

There are two types of people in this business. Winners and Whiners! Which are you going to be?

Winners are people that will overcome all obstacles to achieve their goals. They say “How can I afford this?” rather than saying “I can’t afford this.” They learn from everything they come across: Books, tapes, TV, experiences. They apply everything to their business and test outcomes. They twist and tweak until it works or they throw it out and try something else.

Whiners are people who let life happen to them. They complain about everything. They are always looking at the glass asking people to fill it for them. Sure they may desire to be rich and have a million dollars someday but they take NO concrete steps to get there. They are permanently cash strapped because of their attitude. They will never succeed because they want everything handed to them on a silver platter.

Which are you? Are you a Winner? Or are you a Whiner?

If you are a Whiner go to the bottom of this email and opt out! I don’t want to have you associated with me. If you are a Winner, go to my BLOG and let me know how you persevered through tough times and are successful. Oh and by the way, you don’t need $1,000,000 to be successful. Success is an attitude. Your bank account is only one way to keep score.

2008-04-02T13:49:00.000-07:00

The “Subject To” Myth?

Many Real Estate Speakers espouse a variety of different tactics. Some are buy and hold types, some are quick turn real estate, some buy on lease options, some using hard money, others teach going to the bank and getting a mortgage. The fact is they are all very good and useful strategies.

I have been in the audience when a speaker tells his audience that all the tactics are perfectly fine with the exception of “Subject To”. He says there are major issues with Subject To investing because it violates the due on sale clause. Then he goes on and tells everyone that seller financing is the only creative tactic to use because it is perfect and easier yada, yada, yada…

I use seller financing all the time. I buy “Subject To” all the time as well. But because this speaker didn’t want to take the time to learn all the intricacies of “Subject To” he just dismissed it as a legitimate tactic.

He is missing the point that the due on sale clause is violated in any situation where the underlying loan is not paid in full. It does not matter if it is Seller Financing (Wrap Mortgage), or Lease Option or “Subject To.” Any time the beneficial interest has changed hands the loan can be called due.

That is it. It is not a crime. As Bill Bronchick says, there is no Due on Sale Jail. If you do not close properly, you talk someone into giving you there property at the kitchen table, you use a quit claim deed or several other mistakes there can be repercussions. If you follow a simple step by step procedure properly, including using the proper seller disclosure forms you will be fine. You must understand your options and you need to know the right way to do these transactions.

The Due on Sale Clause actually gives the bank the right but not the obligation to call the loan do. You are taking a risk that they will not. You can take some migrating steps to conceal it or just count on the fact that the banks have enough on their plate right now. With the high rate of foreclosures it is my opinion that the bank just wants the payments current and a performing asset. I never hold these properties long term anyway. In Washington the foreclosure process is about 120 days and I am in and out of a property long before that anyway.

Keep things ethical. Use professionals. Ensure that you disclose everything to the sellers and go out and make some money. Done properly you will help everyone doing these transactions: the seller, the lender and you.

2008-03-26T12:39:00.000-07:00

From a Flipper to a Buy and Hold Guy?

As most of you know I got into real estate investing in 2003. I was looking for a way to quit my job and rely only on real estate for my income. I went through the same steps that most of new investors have gone through. Found a book that explained the subject and got interested and became an avid reader on the topic.

I chose to become a buy, fix up and sell type of investor because it brought the largest amount of cash in my pocket the fastest. I was not a very patient person. Therefore I was not going to wait 20 years to buy and hold before replacing my income.

The thing is the market has changed. Buying got easier but selling became tougher. In some areas of the country you couldn’t give away a property. I became more risk adverse and chose to be choosier as far as the types of properties I buy. There are people that I know who are now out of business because they just kept buying and couldn’t afford the dept. More than one investor I know lost their shirts.

I decided that now was the time to concentrate on multi-family and commercial properties. We started the beginning of this year and have already bought or gotten under contract 64 units. These are everything from four-plexes up to a 20 unit building. We have gotten good at finding these gems.

Last month one of my mentoring student asked how we ramped up so quickly. I shared that I have been through a ton of training and multi-family training was one that I had taken several years ago. I felt that I was not ready to step up at the time because things were going so well for single family flipping. I learned from the master Dave Lindahl.

After this conversation I gave Dave a call. I have known him for several years and knew that he was holding a bootcamp in San Francisco in May. I asked if he would be willing to give me a day here in Seattle to help my mentoring students understand Multi-Family. He quickly agreed to help us out.

I thought that since he was in Seattle we may as well open up the event to anyone who wanted to come. He said he was game because it is always a more dynamic presentation when there are more people in the room. So reserve Sunday April 20th for a day of Multi-Family education!

This day is going to be jam packed with great information so that you can ad Multi-Family to your tool belt. Even if you are not ready right now you should show up to learn as much as you can. That way you can dust it off in the future and ramp up quickly just as I did in January.

You can visit my website to reserve your spot www.ApartmentFortunes.com. It is Free of charge for you to attend. Come and spend the day with Dave and I as we bring you up to date on how and where to invest in Multi-family properties.

2008-03-19T12:41:00.000-07:00

Success Secrets? Is There Really Such A Thing?

Happy Belated St. Patty’s Day! I didn’t celebrate the day like I used to for two reasons. One it occurred during Holy Week and the second is I am just getting too darn old to do the stupid stuff I used to. Where I grew up St. Patrick’s day was the second largest holiday of the year. There was a large percentage of the population of Irish immigrants so they brought it over from the old country. There was always parades and parties and the dreaded Pub Crawl. The event always consisted of Green Beer with Corned Beef and Cabbage. None of that this year I am afraid.

Well let’s get right to the Success Secrets. Yes, there really is what I call success secrets. That doesn’t mean that if you know the secret you will be successful but by applying these secrets you are guaranteed to be successful.

They Missed It!

Last night I revealed several of them to the people that attended our introductory seminar. I was watching their eyes and I could tell that only a couple of people actually got it. I glossed over it a little bit and then I told them straight out 3 secrets back to back. I am afraid that still plainly worded they missed it.

Why you may ask? Well, let me tell you. They were looking for the simple thing. You know “Think and Grow Rich,” not the book but the assumption that people make when reading the title. All they have to do is think about being rich and they will become rich. If that were the case there would be 95% Rich and 5% Poor.

No, the premise of the book is that you actually have to do something. Not just anything, but a well thought out action plan to get you to your goals. Using this combined with the proper education, mentoring and accountability will take you farther than you could go fighting it out yourself.

One of the attendees asked me how I was able to replace my income in 14 months while doing this business part time. I am not sure what she expected me to say. I think she was looking for the miracle story or something. When I explained that I had a definite goal - leaving my JOB, a timeline - within 16 months and success criteria – setting up the business to give me $125k + per year in profit in my pocket after taxes.

I explained that I hired a business coach to help me set my goals and hold me accountable on a monthly & weekly basis. Spending $1000 per month that I really couldn’t afford but I knew was absolutely necessary for me to make my time line. It all paid off through hard work, dedication and implementation. Evelyn and I exceeded out time line by 12 months. What we thought would take 16 months actually only took 4months once we wrapped our mind around it.

The Secret That I Found Was In The Coaching And Mentoring

Having someone who knew how to help me get from Point A to Point B was my secret. Working with someone that would hold me accountable, help me flush out my goals and action plan, working with someone who could facilitate my success rather than just teach me the steps mattered.

I spoke last week to someone who took someone up on the offer of free mentoring. The pitch was come and work for me and I will ensure that you know how to do this business. The problem was this guy was taken for a ride. He worked free of charge for months, he saw how this guy did business but he never saw the complete picture. He got good at one thing, but he never would be able to successfully go out and do the whole business because he only did that one part of the business.

Understand The Mentoring Relationship

Not only that, but the “Mentor” didn’t live up to what he said. There was never a contract. There was never any proof that the “Mentor” really knew what he was doing. Frankly I would not be surprised to see the “Mentor” on King5 investigative reports based upon his business practices.

You have to be careful that the “mentor” you choose does not have ulterior motives. When you pay for mentorship you have a solid business contractual relationship. You are paying for a service and if you don’t get it you have remedies. If you choose the wrong free mentor you can only loose time and effort. This in some cases can keep you from achieving your dreams!

2008-03-14T13:47:00.000-07:00

Home James, And Don’t Spare The Horses!

Wow, last week went quick. Having 5 days on Paradise Island was fantastic. Spent two powerful days in meetings but I did get to play a little. I even went Scuba Diving for the first time. That has to be the best place to do a discovery dive. Spent time at the pool and even went to the night club with some friends. I was able to relax for a little while which was outstanding. The only thing that could have been better was to have Rachel and Evelyn with me.

The flight back was long. I was able to take a stop over in Atlanta for 20 hours and spend some time with my sister Anne on her birthday. Went to Georgia REIA office and saw how they are set up. I asked Anne what she wanted to do for her birthday and was surprised that she wanted to go shooting. So I brought her to a range and taught her basic handgun skills and how to hit the target. She was a natural! I feel sorry for anyone who tries to take her by surprise.

Got to the airport where I was amazed at the mess I found. We were several hours and 2 planes late getting off the ground. We got into Seattle early Sunday morning and then the damn Daylight Savings time kicked in, robbing me of even more sleep. I ran around on Sunday getting things ready for the week and then spent the afternoon with family for my great niece’s 1st birthday.

As you know from reading last weeks email I was in the Bahamas for the Glazer-Kennedy’s VIP mastermind meeting. It was nice getting a pulse on the state of business from these high powered business people. I realized that the only limits on our money making capabilities are in our minds. The reported growth for 2007 was staggering. There was not a recession report by any of us. Even the real estate investors have reported growth to their businesses.

While the economic climate right now is being forecasted as recession and a major downturn. We need to realize that we can choose not to participate. Even during the Depression many people made a fortune, while everyone else was in a panic. The real estate market, while in the doldrums, there are some good deals out there to be found.

Being able to market properly, as well as having the right target market to hit, is the key to getting deals. Those of you in other markets than Seattle will find it easier to have motivated sellers contacting you. I recommend not over extending yourself. Now is the time to be choosy. Carefully sifting and sorting through the leads for the true gems. Here in Seattle getting motivated sellers is a little more difficult. People can still sell their properties without us. So only talking to sellers that meet your criteria is important.

Otherwise you will be wasting your important time and effort and for new investors your enthusiasm on those that do not deserve it. I have seen too many new investors get unmotivated and discouraged because of the apparent lack of progress because they talk to non-motivated sellers.

Go out this week and talk to sellers. Make an offer, better yet make several. Let me know how it goes.

2008-03-04T12:06:00.000-08:00

Bahamas and Mamas

I am sitting here at the Pool of Atlantis Resort on Paradise Island in the Bahamas. We just got back to the resort after going diving. It was a blast, we did a shallow water dive on a wreck just of the coast. I was there with my Friends Karen Schafer, Pete Trelor and Terry Wygal.

The only thing that could have been better was if Evelyn & Rachel would have been able to come along. Rachel was adamant that she could not miss school or the Tennis team for an entire week. Especially if she will be going to Tokyo in 3 weeks.

Meanwhile, Mama (Evelyn) gets stuck at home. My sister Anne moved to Atlanta to be executive director of Georgia RIA. So our baby sitter is gone. Not that we have not had plenty of offers to watch her. We also have a closing as well as a few other business transactions that need to be wrapped up in the next week.

I am down here for our VIP Mastermind Group meeting with Bill Glazer. It is great because I get to work on my business as well as associate with other high caliber business people for the next could of days. I love being in this Mastermind group. We have all seen tremendous increases over last year as far as gross and Net revenues.

I have set a rather high goal for 2008 and so far we have exceeded projections in two of the four companies and have met the projections for the other two. Should be a rather great year for creative real estate investors.

Will post some photos later after we receive the CD with them from the dive.

Dedicated to Multiplying Your Successes!

2008-02-28T10:42:00.001-08:00

Are You Able To Think On Your Feet?

As a real estate investor, many things can come up during a deal. You have a choice, you can let it throw you for a loop or you can roll with the punches. There have been several times that during a closing the seller revealed something that I should have found out earlier in the process. It stood a chance of blowing the deal out of the water. When I first started investing it did screw up the deal.

After learning more about investing I was able to figure things out and recover quickly from these situations. I talked about the cost of education a couple of weeks ago. These are the reasons that I spend so much on education. I quickly remembered tidbits from these workshops and bootcamps that have stood me well over time.

I was able to recall how other investors were able to deal with these. I also developed a relationship with other investors around the country that I could call to see if they had ran into this before. With all of this I have been able to overcome almost everything that has been thrown at me.

The more you know about investing the more you can deal with the nuances of the transaction. Also, by choosing the right best expert professional to help you, the better off you will be. Obviously you can not know everything about everything. But you can choose to work with those that know a lot about their main job.

Take for example a mortgage broker. By working with someone who knows a lot about their trade they can help your client, whether buyer or seller, understand the issues that have cropped up since the sub-prime headaches have come into existence. This can save you from buying a piece of property that may not live up to your expectations.

Using the proper home inspector can help you track down trouble when you buy rather than when you sell, allowing you to take proactive measures in your deal rather than reacting to issues that crop up.

Knowing more than one technique will help you when the industry changes. Take for example lease options and the new laws that are being proposed nationally and locally that will hinder these types of transactions. What are you doing now that will help you if that eventuality comes to pass? Start thinking now so that you can survive anything that is going to block your way tomorrow.

2008-02-21T08:22:00.000-08:00

I Guess I Hit A Nerve With My Article!

I received more emails from members than I have ever received before. All in regard to listening to advice from someone with a vested interest in how you invest.

As you may recall, two weeks ago I wrote about the amazing lack of spending on educational products on real estate investing. Some of you were very upset about what I wrote.

There were those who wrote back and said that the only reason why I believe in being an educated investor was because I was a self serving you know what because I sell training and mentoring programs. Others were agents and mortgage brokers who wrote and said that I impugned their professionalism regarding their selling real estate and mortgages to investors.

To answer those statements directly; was it self serving to advise people to get educated? No & Yes. No, I wasn’t self serving because I was not telling people that my training was the only one in the market and they would be fools not to be trained by me. I recommended all training no matter the cost because if you pick up 1 or 2 bits that will make you a better investor then it paid for itself.

Yes, it was self serving because I hope that you will take some of my training on how to invest. Mine works all the time. I am an active real estate investor and know what I do works. I know that my mentoring program is very powerful and very different from others that you may have been a part. And yes it costs money, but it is extremely valuable and will jump start your business.

To address the second point: To all of you Real estate agents and mortgage brokers who wrote me back saying that you would never lead an investor astray I say good. You are the people that they need to work with. But there are plenty of those other professionals who don’t give a rat’s back side about the investor. All they want is a big commission.

It is up to each individual investor to do your own due diligence regarding each investment. If you do not know the area you should not be investing there. Do your research before you spend money somewhere. It is your money! You are responsible for it. If you do not know how to do the due diligence you need to stop what you are doing and get trained. Whether it is reading a book, buying a home study course or attending a bootcamp you need to do that.

Also, you agents and Loan Officers, get over it. There are some bad guys in our ranks that are preying on uninformed investors. You need to determine what their goals really are so you can be a consultant rather than a paper pusher. When you work with an investor they have special needs that need to be addressed. Up front they can be more work but in the long run they can be worth a lot of money to you. Don’t just go for the quick hit, make them successful and they will make you big $$$.

2008-02-14T10:40:00.000-08:00

You Gotta Love Creative Real Estate Investing!

The ability to control a property without going to the bank or having big money tied up is great.

The other day I was running my local real estate investors association satellite group meeting. We had around 70 people show up and I was amazed at the number of new people I had never met before.

As always, I was talking to people before the meeting began and was questioned about how to become a real estate investor. And as always, there are many people interested in making money in real estate and really have no clue the opportunities there are.

When a person first learns about investing they always think traditionally. Buy a property using 10- 20% cash down payment; financing the rest with a bank loan and then either fixing it up or renting it out for passive cashflow and appreciation.

I then ask; “What is your Goal by Investing in Real Estate?” Invariably, I will be told that they are looking to increase their lifestyle and spend more time with family. Only rarely do I ever hear that someone is only out to make millions of dollars in the next year or two.

Being wealthy is nice. It is sure better than being poor, which for the record I have been. But being financially secure is the best thing ever. Not having to worry about getting up and going to work if you don’t want to. Not having to slug through traffic to spend your entire day working for someone else is the best thing ever.

By using Creative Real Estate Tactics anyone can make money investing in real estate. You can build a business to generate money that can totally replace your income in less than 12 months. By using these tactics you can build wealth and set yourself up for retirement better than if you were to contribute the maximum amount into your 401K or IRA for then next 20 years.

If I only used traditional techniques I would have been stuck in my job for an additional 5 to 7 years. I would have been struggling to make enough money passively to replace my income. In the Seattle Area I would have had to put a big percentage of the price down to get cashflow on any rental. Do you know how many I would have had to do to replace my salary from my high tech job?

Instead I was able to create a business that reliably was able to replace my income in only 14 months rather than 14 years. So like I said: You Gotta Love Creative Real Estate!
What are you doing to replace your income?

2008-02-07T10:27:00.000-08:00

What is More Expensive, the Cost of Education or the Lack of Education?

It is becoming more and more obvious too me that people are spending too much on the lack of education.

This past weekend we hosted our Customer Appreciation Event. We had over 60 people come and spend Saturday and Sunday with us. I spent a ton of time teaching about marketing, selling, finding motivated sellers, credibility and I hired an expert to come and share her insight on how to ask great questions and negotiate with Sellers.

I was able to get to know many new people I was very pleased and excited about the prospect. Everyone ate well and learned much. Dawn Jones helped us on Sunday to take the time necessary to come up with the right way to ask questions to help us achieve our desired outcome. Great Presentation. Later I was asked about her and had a frank discussion with this person about learning.

I spent over twelve thousand of dollars hosting this event paying for the hotel, the food and the snacks. I hired Dawn for thousands more so that she could assist the investors ask better questions to lead to more sales. I spent much of my time passing on knowledge knowing that people were either going to take the lessons or not. Their call.

I heard many stories from the attendees, both privately and publicly. They shared some horror stories about their investing experiences. I will share some of the information being general for privacy sake.

One Attendee told me that they bought 3 houses in Detroit and has been paying for them monthly without renting or selling for the last 30 months. She had never been to Detroit before or since but she got some good deals on properties. She has invested $40,000 in down payments and closing plus paid out over $2500 / month over that time frame. She does not know what to do. The properties are worth about the same now as they were then. If she could sell them.

Another took the advice of a mortgage broker and bought 4 houses in 2006 thinking they would be able to be rented and would appreciate. He paid over full retail and when he balked at the monthly payments during closing the mortgage broker told him that if he didn’t close he would be sued by the seller. You need to be careful of the reason for their recommendation or advice.

This last investor didn’t attend my event and he called last week looking to sell his properties. He bought a couple of 4-plexes and converted them into condos over the last year. He paid full retail and the conversion process took too long. He hired a friend to renovate and instead of a week per unit the guy took 4 weeks each. He put them on the market, but he ran out of money in October. He is going in foreclosure and is in trouble. We bought his properties from him and are going to be closing shortly.

The point of this message is, being uneducated costs a whole lot more than getting the proper education. Even then you must pick and choose whom you will listen too. So many investors want my help becoming an investor but they do not want to spend the money doing it. Personally I will not waste my time on them. If they won’t invest in themselves, why should I.

I was told by so many of my mentoring students this weekend about how much value they have received in my program. I guess I am going to have to evaluate how much I charge for my mentoring program (Big Smile). Just kidding, I provide this value to my students because they deserve it. I want them to succeed and will do everything in my power to give them the tools to do that.

Those of you who attended the event this last weekend, I want to thank you from the bottom of my heart. I know you learned a lot and I hope you will implement at least a couple of the items.

Now is the time. Go and Be Successful in 2008!

2008-01-31T08:07:00.000-08:00

How does the media view the Foreclosure Crisis?

I was interviewed by a Seattle Times columnist last night and was interested by the questions she asked!

I have to tell you that I was impressed by the quality of questions that the reported asked regarding the Real Estate Market in Seattle and investors in general. Usually I am quite concerned by the tone of most media coverage that we see in the papers and on the TV. Reporters typically have a bias one way or another and want to make Real Estate Investors out to be the bad guy.

Foreclosures are at an all time high, blame the greedy real estate investor for causing it. People are losing their homes, blame the investors. Houses are not renovated properly, blame the investor.

Okay, sometimes I feel picked on and abused. What the general masses don’t realize is that ethical investors are really there doing a service to the community.

We stop foreclosures by buying the house and then either making the payments or pay off the loan making the banks whole again. We take ugly properties and make them livable, turning them into rentals or selling them to owner occupants.

Recently here in Washington there has been a push by the attorney general to stop what is called “Foreclosure Rescue Scams”, basically a lease back purchase arrangement with an investor who then skims the equity and sets the home owner up for failure. Later evicting the former home owner for failure to pay.

I personally stay so far away from anything like this that I support stopping this type of transaction. Not only to protect consumers but also to prevent bad press for investors. Lease options are a great strategy but not with people who have proved that they can’t afford the property already.

I will probably hear from some of you telling me that this is a legitimate strategy and while you are right it works and done properly is legal, does not mean that you should do it. Publicity on this can be a nightmare. This can ruin your investing business.

Most people I talk to who use this strategy like it because they have a ready made buyer for the house. Personally I find it easier to sell the house once the previous owners are out of there.

2008-01-22T13:16:00.000-08:00

Here is an invitation to our Customer Appreciation Celebration

2008-01-16T13:42:00.000-08:00

Are you ready to put 2008 into high gear? Many of the investors that I have met in the last couple of weeks fall into one of two camps.

First – the Doom and Gloom-ers. They believe that everything in the world has gone to heck in a hand basket. They avidly watch the TV news and listen to radio and hear that everything is awful. That the economy is in a mess and that the housing market is in a slump. People can’t sell houses and the prices have gone down dramatically. So they are just pulling the covers over their heads and getting comfortable in the rat race.

Second – the Raring to Go, No holds barred, never been better to be alive types. They pshaw the pundits and the ne’er do wells who are always looking at the glass as half empty.

Which type are you? Really now? Are you sure? You could really just hang it up and go back to your day job and live your life the same old way you have in the past. The rat race isn’t that bad is it? You make enough to pay your bills each month, right? You get to take a vacation once a decade. Who could ask for more?

That’s right. You can! You can do anything you set your mind to. You really can buy 6 to 12 houses this year. You can wholesale them or rehab and retail. You can choose not to be apart of the general thinking. You can be different. You really can do anything you set your mind to.

When I have been asked if I am a glass is half empty or half full guy I always answer the same thing. “It depends on if you are drinking or pouring!” If you are drinking, the glass is half empty, if your pouring, it is half full. When my glass gets to a certain point I just switch to the other option. I have an unlimited pitcher sitting right next to me. I can fill my glass up at any point I want to.

It is up to you to do the same. Don’t rely on anyone else to provide your motivation and reasons for success. It is all you.

Dedicated to Multiplying Your Successes!

Paul

2008-01-09T09:57:00.000-08:00

It’s a Buyers Market Stupid!

That is what I heard a frustrated buyer say to his real estate agent after his offer was rejected. I can understand his frustration. Sellers in the Seattle area are just experiencing this affect that the rest of the country has been going through so they still don’t understand it.

Sellers need to be a little more flexible. It is more give than take. That is why it is important to be dealing with motivated sellers. Most investors don’t have the patience, or their marketing setup, to find the motivated sellers. In the mean time they are dealing with a lot of sellers who just want to sell and are thus wasting their time.

Some of the investors are getting frustrated because they are not doing more deals while others are frustrated because they have not done their first deal yet. I can understand their pain.

Shh, I will let you in on a little secret. Promise not to tell? Well some of the national speakers teach everything from calling FSBOs, Yellow letter and a few other techniques because it makes their students seem busy and gets the phone to ring.

Now first off, I admit that I have bought a property from a yellow letter campaign. I know of others that have done the same. What it does do is creates a fury of activity and a bunch of phone calls that you will have to capture and evaluate individually.

To be honest, I have not been able to systemize this to my liking. Most of you know that I like to drive people to 24 hour information lines or my website for them to find out more information before I talk to them. I use this as a hurdle that they have to jump over thereby weeding out some of the “Want to Sell” callers. I then have them leave information that I evaluate before I return their calls. If they don’t leave the information, like mortgage balance or monthly payment information I use that as an indicator of motivation level.

Personally, this is the way I choose to run my company. It is how I want to work. I would rather pass on a marginal deal than chase someone down who is a just looking for an easy full market sell. I know that some of you are thinking that you would love to pick up all the deals that I pass by without looking at them. Frankly I would love you to pick them up as well. Better you make money than no one does.

You may think I am crazy to do this. Personally I call it systemization. I would rather do one or two slam dunk deals than work on 10 to get 1 or 2. I choose to have my systems do the sifting and sorting so I don’t have to waste my time on them. I bet when all was said and done I would only miss a couple over a years time but in the mean time I can use my time to make money in other ways. Interesting topic isn’t it.

Dedicated to Multiplying Your Successes!

Paul

P.S. This month I am doing double duty. On Saturday the 19th I am holding Two (2) half day workshops. The first is “Beginners Guide to Real Estate Investing – REI 101” and the second is “How to Fund the Deal Using Private Money.” I am constantly asked about these topics and you can find out more about them by visiting www.rei-success.com/workshop.

I recommend signing up early. There is construction where we hold our meetings and we are relegated to smaller room than is usually the case. I found out that it will only hold 40 people and we have over 22 people signed up and paid already.

Private Lending is really the key to my success. Being able to fund my deals quickly without waiting on mortgage brokers has helped me do deals that my competitors were unable to do. I was talking to one of my mentoring students over the holiday and was telling her that because of private lenders I was able to leave my J.O.B. a full 12 months before I expected to. I will be going into how to find them as well as how to jump through the hoops so you don’t cross paths with the SEC or Washington state regulators.

2008-01-02T13:26:00.000-08:00

It’s over! Let’s get down to business!

That is right. The holidays are over! I don’t know about you but I am glad they are. No matter how fun they are they are still a lot of work and distraction from real life. I know, I know. You are going to email me saying that real life is a holiday and that the rest of the year just leads up to them.

I am not Scrooge or the Grinch. I like Thanksgiving, Christmas and New Years as much as the next guy! But come on, you have to admit that it makes it harder to be productive and get things done. You make the phone calls to the sellers and they are busy and can’t talk right now. Or they will call back after the holidays. You are working on a closing and the buyer’s mortgage broker is on vacation.

I am so ready for these next few months. We are doing some interesting stuff. I am right now in negotiations with a couple of multi-family sellers as well as looking at and for the right commercial properties. House sellers are creeping out of the woodwork and I will tell you that thank GOD that I have investing criteria because if I didn’t I would be wasting a whole lot of time on leads that I shouldn’t be.

If you are not getting deals right now you really need to work a little harder on that. Last month I held a half day workshop on finding motivated sellers. I am using just a fraction of those techniques and am getting some good leads crossing my desk, especially on the Commercial and Multi-Family side of the house.

I heard some great feedback on this workshop. Matt from Portland drove up just for the workshop. He mentioned to me that just one tip that he heard in the entire presentation was worth the cost and time. Thanks Matt.

This month I am doing double duty. On Saturday the 19th I am holding Two (2) half day workshops. The first is “Beginners Guide to Real Estate Investing – REI 101” and the second is “How to Fund the Deal Using Private Money.” I am constantly asked about these topics you can find out more about them by visiting www.rei-success.com/workshop

I recommend signing up early. There is construction where we hold our meetings and we are relegated to smaller room than is usually the case. I don’t know how many it will hold.

Private Lending is really the key to my success. Being able to fund my deals quickly without waiting on mortgage brokers has helped me do deals that my competitors were unable to do. I was talking to one of my mentoring students over the holiday and was telling her that because of private lenders I was able to leave my J.O.B. a full 12 months before I expected to. I will be going into how to find them as well as how to jump through the hoops so you don’t cross paths with the SEC or Washington state regulators.

I hope you had a great holiday but now is the time to get things done. Put your action plan to work for you right away. Don’t procrastinate or let things slip through the cracks.

Dedicated to Multiplying Your Successes!

Paul

P.S. By the way, as some of you know I don’t go out for coffee or lunch with people. I would like to but my time is very valuable to me and I am so busy that it just doesn’t make sense. But, because I have been asked so many times in the last couple of weeks that I decided to host a small group of people next Tuesday January 8th from 11:00 – 1:00pm in Issaquah. I will even buy the coffee.

This will give who ever shows up a couple of hours to ask any question they would like. This is an informal setting and will allow a few of you to pick my brain like you had asked. Just reply to the email letting me know you would like to attend and you will get the address and directions. I don’t know if I will ever do this again so if you need to take an hour off of work to be there then do it. I know that is how I got started by picking the brain of a local investor and had them point me in the right direction.

2007-12-19T13:16:00.000-08:00

Buying Right Has Never Been More Important

We all know that the sub-prime mess is still on going. The problems getting new buyers qualified to cash you out of your properties are causing hassles for many investors. This is the 800 pound gorilla in the room that is making it more important than ever to buy properties correctly. It does not matter what your exit strategy is, you can loose a lot of money if you pay too much for a property.

When I am looking at the property I ensure that I am comparing the properties to ones that are very much like the subject property. I never compare a rambler or a two story house to a split level. Why you may ask? The answer is because in my market a split level is seen as dated and a throwback to the 70’s. This retro style is great for clothes but not so good for houses.

I also will go out of my way to compare properties that are in the same neighborhood rather than miles away in a different area. Banks are getting more stringent with their appraisers. They are also black listing some appraisers because of the generosity of appraisals. Before the mortgage crisis, you had some liberty in choosing an aggressive appraiser when you were shopping for a loan. Now the banks are only allowing certain appraisers to value the properties they lend on.

Overall this is very good for you as long as you take this stuff into consideration when you buy your investments. Do your due diligence so that you can avoid those traps that can come back and bite you in the behind. There is nothing more painful than paying too much for a property and then not being able to sell it for the profit you expected.

My Round Table Mastermind and Mentoring clients have been working very hard at correcting this tendency when they first started. I have worked with them on ensuring that they are able to figure out the current value but also the after repaired value so they are ensured of a profit before signing on the dotted line. It has helped them put more money in their pocket instead of leaving it on the table.

Take a little more time to be sure of your values. It will help when presenting your offer to the seller. By proving to your seller the true value of the home you take the emotion out of the value. This will help you explain your position in a way that is undeniable. I have found that when I properly present the value to a seller I am authoritative and credible to the seller; allowing me an edge in the negotiation.

Have a Merry Christmas and a Happy New Year.

2007-12-12T12:30:00.000-08:00

Will the credit crunch and sub prime bail out have a bigger affect on the Economy than predicted?

Have you been staying on top of the news lately? If so you know that the Bush Administration has outlined a plan to help some of those facing foreclosure. As I mentioned last week there are a bunch of activists out there saying that they did not go far enough.

Question I am posing to you is; what else is there to do? Should he stop all of the foreclosures? Should he bail out the financial institutions and Wall Street investors so they don’t lose any more money? Is this really what is best for the economy?

I will tell you that I can see the writing on the wall. This is going to begin to effect more than just the housing industry. People will be stretched thin making their payments and will not be spending their money on non-necessities. This will cause the economy as a whole to shrink of stagnate.

How will this affect us as Real Estate Investors? There will be more motivated sellers. This will allow us to purchase more properties. This is a dramatic difference over the last several years when it was more difficult to buy but you could pretty much sell anything. Now you will need to be much choosier about what and where you buy your properties. And you will have to work harder to sell them. Be more creative and offer more options.

Lately, I have tightened my buying criteria. I now will only buy closer to the town center areas. I concentrate on those areas that are still selling a little quicker. I still buy pretty houses that are of the size and value that sell more often. I will not purchase a house that is functionally obsolescent or laid out in an unorthodox way.

I always drive the houses that are for sale to ensure that after renovation I can compete with them head on and usually with an advantage. I ensure that my house is renovated well and that there are few if any issues with the buyer’s inspection report. I ensure that the house is clean at all times and that it is staged neutrally so that people can see themselves in the property with little trouble.

There are a few more ways that I have tweaked my sales strategy to sell quickly but I don’t have a lot of room to cover that in this week’s eNewsletter. I will go into more depth in the next several weeks on how to sell in a buyers market.

Dedicated to Multiplying Your Successes!

Paul

P.S. Two items of note. I am teaching a 4 hour workshop this Saturday December 15th in Bellevue, WA on “How to Find Motivated Sellers” This workshop will run from 9:00am until 1:00pm and will be taught live. There is a small cost for this event but well worth the money as we will be discussing 107 different tactics and places to find motivated sellers that are willing to sell creatively and at a discount. Reserve your seat here: http://www.rei-success.com/workshop.php

P.P.S. Second Item, next Wednesday December 19th I am holding a Free Webinar on how to determine true comps of a property. This is a training call with a friend of mine Mark Jackson who has been an appraiser for years. We will show you how to ensure that you are placing the proper value on the property when you buy it as well as pointing out some common misconceptions about renovation and adding value to your properties. RSVP here to reserve your place on the call: http://www.rei-success.com/teleseminars.php

2007-12-11T12:18:00.000-08:00

Cash, What's Cash?

Here is a post from YouTube for some of your clients that may be experiencing foreclosure right now. I know that it sounds a little crass to talk about not spending money if you don't have it. Especially during the Christmas Season.

But the sad fact is that many people are just in over their heads. They have spent more than they have and relied on the future to take care of them. I know that there have been many that I have talked to that bought a house based upon their Real Estate Agent and Mortgage Brokers advice that they could not afford using conventional financing. They relied on advice from someone who made more money if they bought something more expensive.

So only buy what you can afford rather than the dream house that is just out of reach.

2007-12-04T10:10:00.000-08:00

FEDS to the Rescue?

The Fed released their plan to help those in foreclosure. As I expected they only addressed those that could afford the house they are living in now without the rate adjustment but could not afford the house after the rate changed according to their contract.

This does not affect three other types of borrowers:
1 - Borrowers who could afford the adjustment
(In my opinion there is no help needed)
2 - Borrowers who are already behind on their payments
(those that need the most help - this is where creative investors come in)
3 - Those that can refinance into a fixed rate loan.
(Again no help needed there)

There are a whole bunch of consumer advocacy groups crying that it did not go far enough. “This does not help those who need it most”. Frankly I don't see how the government can help this last group; those homeowners that are already in foreclosure. The rates have adjusted but what else could they do? They are looking at extending the FHA program to allow for easier qualifications.

The problem is that typically in this situation even if the borrower can afford the payments the house may have devalued to the extent that they would be so upside down in Loan to Value that they may not be stabilized again for many years to come when the house values rise again. This is not the case everywhere but there are some markets where this is just what is happening.

I understand that this will affect the entire economy. The housing starts are down across the board. The home builder’s and mortgage stocks have taken a nose dive. It is starting to spread to the rest of the economy little by little. Maybe there is an economist or political scientist out there that will explain to all of us the ramifications.

Last night I taught a group of investors Creative Marketing for Creative Investors. There was a gentleman in the room who has been investing for 40+ years creatively. He is a well known Hard Money lender in the area and he said that for the 1st time ever he has to actually come out of pocket with 20% of the purchase price to buy houses more conventionally. He was saying that this is the toughest he has had it as an investor. He has ended up taking back houses that he lent on because of the investors not being able to sell the houses once they are fixed up.

Is this what you are finding? A friend of mine who is a mortgage broker says that she is busier than she has been in 18 months with new home purchases, first time home purchases and investment projects. She is happy as a clam. Who is right? Which reality is yours? I have been searching for commercial properties for the last several months. I am getting in lead after lead right here in my back yard. Some are deals some aren’t.

I guess the point I am trying to make is that you make your own reality! So how rosy is your outlook? What do you think? leave me a comment below.

Foreclosure rescue plan: No help for you - Dec. 3, 2007

Treasury near subprime aid deal - Yahoo! News

2007-12-01T09:50:00.000-08:00

Sub-prime Aid

The government is working to save the middle portion of those subprime borrowers. Those that can afford the loan payments as they are now but could not handle the huge rate increases that will be starting soon.

This will be a welcome relief for some.

Treasury near subprime aid deal - Yahoo! News

2007-11-30T12:19:00.000-08:00

White House is going to do What?

Here you have a call to the white house looking for a way to help stop the default rate on sub-prime loans. I understand the sentiment of putting out the fires, but I don’t know how they are going to do it without costing everyone big bucks bailing out the banks.

This is a hard thing for people to go through but a lot of what is happening now is a result of poor choices that people have made over the past several years. Do we have to bail everyone out of bad decisions? If we do what will they learn besides the fact that someone will always bail them out.

Call me hard hearted in the regard I guess. Go ahead and read this article I know you will find it as interesting as I did.

White House: too soon to discuss subprime loan plan - Yahoo! News

2007-11-28T09:40:00.000-08:00

The Grunt Work of Motivated Seller Marketing

When I am asked by new and experienced investors about how to find deals I stun them when I tell them that I have motivated sellers seek me out. They are at a loss because either they are not getting any leads or those leads that they are getting are by people who do not need to sell they just want to sell.

I have never understood why people would do their marketing in such a general manner. They are getting leads from all over the place. Worse yet they are getting people who are really just kicking the tires, rather than serious people who need to do business the way that we do business. I know the reason that most investors do their marketing in this way is because that is what they see other investors doing or they were told to do that from a seminar speaker.

I always have been asked about using the “Yellow Letter”. This is a letter that is hand written or appears to be hand written on a yellow legal pad of paper so that it looks like an investor actually took the time to mail each one individually. This is a good technique used in the proper neighborhoods. It does get people calling in and it makes the investor seem very busy.

I spoke with several speakers about this mailing and one confided in me that he teaches this method because the investor gets responses from it and that it makes him, the speaker, look good. The funny thing about it is that this speaker knows that the number of useful leads is actually below average from his other mailings.

When I do my marketing I do it in such a way that I only talk to motivated sellers rather than every Tom, Dick and Harriet that wants to sell their house. I would rather direct them to my website or automated information line rather than talking to all of these people.

Recently I had a mentoring student who used the Yellow Letter call me frustrated. She mailed out thousands of yellow letters and had over 200 phone calls in less than two weeks. Her days were spent trying to get the answers to her questions from these people. At the end of the exercise she swore that she would be happy with just buying a single house from those leads.

Frustrated at spending over a week following up and tracking down she had come to realize that there was not a single motivated seller in the bunch. All wanted full retail; a few others wanted more than the house was worth and a few figured that by discounting $10K was enough for an investor to make a profit on the deal. She finally realized that putting people through some prequalification before she spoke with them is much better than dealing with all of these phone calls.

Let me know what you do to get Motivated Seller Leads. You can post your trials and successes to my BLOG.

2007-11-21T11:37:00.000-08:00

Thinking of Thanks

If you are like me I have been receiving emails from everyone expressing their thanks for my being their customer, friend, acquaintance or whatever. Most are just a simple thanks for my support and attention.

It does get me to take a step back to peek inside my own head to see what I am thankful for. I will share some of them with you…

Thankful for finding a wonderful woman who could put up with me 24/7 for the last 16+ years
Thankful for a daughter who is like me but has not put me through the trials and tribulations that I put my parents through
Thankful for finding my deceased brother’s self improvement books in the attic - “Think and Grow Rich”, “See you at the Top”, and the recording of Earl Nightingales’ “The Strangest Secret” – these put me on the path to success at the age of 14
Thankful for being the last of 11 kids – I got to know my parents in a way unlike any of my brothers and sisters
Thankful for my country and the opportunity that it affords to me
Thankful for my faith and GOD – knowing that he answers my prayers always - the answer just might not be what I was expecting or wanting - HIS will be done
Thankful for the opportunities that surround me on a daily basis – to choose between doing good or bad and right or wrong
Thankful for my fellow veterans and those still serving the cause – “No greater love has a man than to lay down his life for others” (an honest, heartfelt, sincere THANK YOU)
Thankful to those who volunteer to serve others in any capacity
Thankful to the father and mother who work hard to provide for their families
Thankful to those who seek a better life for themselves and their future generations
Thankful to those who are too blind to see beyond themselves and their wants and desires – because they provides an example of what not to do
Thankful to all the obstacles that I run into on a daily basis because they give me the opportunity to grow and learn
Thankful to you for reading my ramblings on a weekly basis…

I wish you a great and wonderful Thanksgiving. Please share what you are thankful for by posting below

2007-11-14T08:12:00.000-08:00

VIP Mastermind

We just finished wrapping up our last Glazer-Kennedy VIP Mastermind Meeting in Baltimore of the year. I am one of 18 members in Bill Glazer’s highest level national mastermind group. We spend a couple days three times per year going over our businesses and the latest trends in our industry. It is a mixed group of people. There are people from diverse industries like a CNC machine distributor, a commercial real estate agent, a mortgage professional, a cabinet manufacture, a dentist, a cosmetic surgeon, a lawyer, a real estate agent, an internet entrepreneur, a video training company owner, a martial arts company owner, an international security protection company president, several real estate investors as well as a few other industries sprinkled in.

These are professionals at the top of their industry and I am pleased to be part of this diverse group. It allows me to take what is working in other industries and make modifications to apply it to my industry. I would say that the biggest benefit of this group is it allows me to try something radical and test it and then get feedback from the group. It is a great support system.

We talk a lot about our marketing and what we are doing to gather leads for our business. I will tell you that every business represented in the group relies on leads. I see this in all four of my businesses. As a real estate investor we are constantly working through finding our way to stand out from the crowd. While talking to the other investors in the group I can tell you that incoming leads are down throughout the country.

There is a large well respected media lead generation company owner in our group. They run national campaigns driving motivated house sellers to websites and 1-800 numbers capturing leads. They tell me that the number of leads coming in is down in most of the country. It was a consensus by all of the real estate professionals in the group that the media has house sellers and buyers convinced that they might as well just roll over and play dead rather than sell their house. It is sad how that is affecting the price of houses and people who are in trouble’s lives.

As a real estate investor we must come up with a better way to market to these people. We must offer the message of hope and that life is not over. Relief is just a decision away. In my marketing I work hard at being different than everyone else. My marketing stands out from the crowd. It isn’t just another #10 plain white envelope saying please, please let me buy your house.

It is colorful, attention getting and is worded in such a way that people really are motivated in contacting me to see if we are the right fit. Marketing is the key to success in creative real estate. Without it you will not survive in this business. Stand out from the crowd, do something really wild and get people to respond. I would love to hear from all of you about how you get your message opened. Reply to this email and let me know what is working for you.

It is funny how I have shared some of my most creative pieces to investors in the past and the responses from you. I have heard so many times – why would share your marketing secrets because then everyone will use them. The reality is, 99% of those reading will never implement what I do because it there are too many steps or it costs more than a postcard. Funny how I can reveal everything from my most successful campaigns and no one ever implements them. I will go deeper into this next week as well as share some of my secrets as well as some of the most creative ones from you.

2007-11-07T05:16:00.000-08:00

Determining the True Value of the Deal

I don’t know about you, but when I first got started in this business I had a hell of a time determining the true value of property, when I bought it, as well as the After Repaired Value (ARV). There were so many variables in determining the value it just eluded me.

When I first began learning about investing everything regarding value was cut and dry. Run comps using the MLS, Real Quest, Data Quick or some of the free comp-ing services from title companies. They would give you the sale prices and the list prices of all of the properties within a radius around the subject property.

I did learn that proximity, size, age number of bedrooms and baths are important when determining the value. Amazingly enough you can have two houses built in the same subdivision, same age and size and yet the value of the properties can be radically different.

Contrast that with a house built by the same builder but in the next development over and the prices can be different as well. All of this has made for a very confusing problem when determining the value of the house.

A perfect value would be having a house that was the same size, same number of beds and baths in the same neighborhood built by the same builder and the comparable property was sold and closed only 30 days previously. You can then be assured that the values would be the same.

Then you have to take a look at the motivation level of the seller and the buyer; just because the appraised value would be the same the market value could be radically different. Suppose the seller was willing to offer better terms for the sale or the buyer was in a pinch and needed to close quickly. This could add 3-7% to the selling price of the house.

I know that I have added many different dimensions to something that should have been simple, determining the value the property. I just want to encourage you to think about the complexity of real estate investing. What may seem like a simple item can become tricky very quickly.

This is one thing that will trip up a beginning investor, but surely not the only thing. This is why I encourage you to work with the Best Expert Professionals like appraisers and real estate agents when first getting started. Once you have done several properties you will become an old hand at figuring out what the property is worth.

2007-10-31T08:11:00.000-07:00

Know Your Exit Strategy
Before You Buy That House!

With the current state of the real estate market around the country it is important to be a little more cautious when you are looking at potential deals. I don’t know about you, but I have been getting leads from motivated sellers. They are putting their houses on the market as well as trying to sell their properties themselves.

In this market it is more important than ever to do your due diligence by knowing the value of the home as well as understanding what your exit strategies can be on an individual basis.

Here is a little primer on exit strategies and when to use them. I typically use 5 types of exit strategies when I am investing. When I buy into a deal I want to have as many exit strategies as I can possibly have that will be profitable to me. When I do, I have much more flexibility with the deal.

1. Wholesaling – I would get a property at a discount from the seller, put it under contract and then depending on how much profit there is in a deal I would then wholesale the deal to another investor on my buyers list or if the deal was slim would wholesale it to an end buyer for a finders fee

2. Rehabbing and Retailing – The deal would have to have an upside potential. Being able to get it at a discount or buying it creatively is a good start. Depending on how much of a fixer it was I would do to the property what I could balancing time and cost to maximize the sales price.

Typically I don’t like to do ugly houses where I would need to do a major remodeling job. I like to get in and out in a hurry putting my predefined minimum profits to see if the deal is truly a deal.

3. Long Term Buy and Hold – When I am ready to hold houses for long term appreciation and the tax advantages I look at everything combined. The status of my company, do I need immediate cash to run my company?

I look at the deal itself, only buying in those areas where the value will either maintain or increase. I also look for the manageability of the property, how much effort is it going to be to find a tenant and to maintain the property long term.

4. Lease Option – This tactic gives me a lot of the advantages of both rehabbing and buying and holding. I can take a property and rehab a profit into it as well as sell it for the same price it will sell for in 12 to 24 months.

Tenants can be a challenge finding but they are much less of a management headache. I don’t recommend this as an emergency exit strategy like I have seen so much in the past. You must understand this technique so you don’t put yourself in jeopardy by giving equitable title to the tenant. Do your research and use the proper forms.

5. Last is Seller Financing – Some investors are hesitant to offer this as a solution when selling a house. I like it because I can sell at a higher price to more people. In this tight sub-prime mortgage market it is a great technique as long as you use the right contract and work with the right buyers.

You do not have to offer 100% financing but you can carry back a second mortgage to cover some of the buyers down payment. Just make sure that you can get out of all the underlying loans properly so you will not have to make up the deficit with your financing. I want to work with a buyer who can get at least an 80% first mortgage if not more and then I will carry back a not for the difference. This way I am clean of my costs and earning interest on my profits.

This is the first step that I look at when I buy the property. Following this rule I have yet to be burned because I have had at least 2 backup plans. You know what they say about having a good backup plan; it can be the difference between working on your own business or working for your old BOSS.

Go out and review your deals in this light and make some good money for yourself.

2007-10-24T06:44:00.000-07:00

Sub-Prime Meltdown and the
“Subject To” Solution – part 2

I have to tell you that the responses I received to last week’s email have been very heartening. A lot of you really know your stuff. Good to know that there are some educated investors out there.

I am going to outline the issues with the sub-prime meltdown and then we can get into problems and solutions.

A little background…

Sub-prime is a loan product that people who will not qualify for conventional mortgages can still get loan products available. This would include people with poor or bruised credit, people without documented income, sales people on commission who do not have a two year track record in their job and small business people like you and I.

This was a good product that went overboard and had some unscrupulous lenders that were putting people into products that would put them in over their head sooner rather than later. I am not giving a pass to any homeowner who put themselves into this position, mind you. If they pulled money out of their house to go and spend it on toys and things, or bought a house they could not afford, I have no sympathy for them. They made a choice and need to live with it.

The problem is that the sub-prime meltdown has repercussions far beyond just these loan practices. It was basically the straw that broke the camels back. There are a lot of people who also purchased or refinanced using conventional mortgages that put very little money down and used adjustable rate or interest only products that are coming around to bite them now.

“Subject To” Solutions…

You have to be very careful when you approach these types of clients for yourself as well as for them. Never promise to make their payments if you can not afford to do so. Keep the promises that you do make though.

The only way to take on a property like this using the “Subject To” technique is when the house has two or more mortgages. The seller must be late on at least the first mortgage and then you can negotiate the holder of all subordinate mortgages to accept a fraction of face value.

You will need to follow all the appropriate short sale techniques to renegotiate both loans. But you will not be paying off the first mortgage, but rather you will use them to renegotiate with the secondary lien holders. Basically they are the hammer over the heads of the second lender.

You will then negotiate a forbearance of the late payments, penalty, interest and attorney fees on the first and bring cash to closing that will cover the cash required for the forbearance or bring cash to closing for all of the arrearages and late payments. You will also be required to payoff the negotiated settlement on the subordinate loans.

This definitely requires more cash at closing than a typical “Subject To” transaction does but it is a way to buy the house without having to get a loan for the entire purchase amount.

There are more ways that I will reveal on the mastermind call that I revealed last week.

The punch line is…

The “Subject To” technique is just a tool in your tool belt. They are a good tool for getting into a property without having to go out and get a loan for the entire purchase price. They are not the end all - be all by any stretch of the imagination.

I would never do a subject to purchase on a property that I could not sell quickly. Whether that deal was a rehab and retail or a wholesale deal to another investor. I also never buy a property from a motivated seller and leave them in it, especially on “Subject To”.

There are techniques to use but frankly I don’t have the space to cover all of that in this article. For those of you who commented on last weeks article I will be holding a special “Mastermind” conference call where I will give my feedback to you but also we will have a moderated discussion where we can throw around ideas for feedback.

Also I will have some case studies that I will send to each of you for review.

If you would like to participate you will need to reply to this post in my blog. Please include your name and a way for us to send you the information on the closed door mastermind meeting that will be held in November prior to Thanksgiving. Since I am going to be out of the office next week for most of the week and then I have my Glazer-Kennedy Mastermind meeting on the 12-14th.

2007-10-23T09:53:00.000-07:00

Mad about the Real Estate Market...

I have mentioned many times that Jim Cramer from Mad Money was talking about not investing in real estate. I like this guy. He is very knowledgable about stocks and he has the ears of all of the major builders in the industry. I have to agree I would not be buying new construction nor would I be paying full retail for properties in alot of markets.

But I do have to say over and over again. Real Estate in Local. I teach investing in neigborhoods rather than generalities. But for those of us in Seattle and a few other areas you have to take heart when he says what he does about Seattle.

You can see the video below.

Take heart there is room for us out there when we play things smart.

2007-10-17T10:55:00.000-07:00

Sub-Prime meltdown and the "Subject To" solution.

Unless you have been locked in a closet for the last 8 months you know that there has been a big shake-up in the sub-prime lending market. There has been bank after bank that has either gone out of business or has revised their lending criteria for people with bruised credit (FICO under 650) as well as non-owner occupied or stated income loans.

Just last year a real estate investor could buy a rental property with 100% financing without documentation of income or asset verification. This practice has stopped and for a good reason too. This was also applicable to the regular home buyer whether it was a first time home buyer or someone looking to buy bigger or better. And least we forget there was a lot of second mortgages made for people who where just looking to tap into their house as if it were an ATM.

I knew people who were pulling out money from their house to buy cars like H2 Hummers, speed boats, jet skies or to go on that once in a lifetime vacation. I even met a couple in California that pulled all of their equity out of their house to have some personal work done. You know face lift, tummy tuck and breast enhancements. (And I thought guys went through mid-life crisis.)

What this has done was made houses over leveraged. People thought that their house values would always go up. But the roof fell in and the prices stabilized or drew back and now they owe $50,000 to $100,000 or more over what the value of the house is worth. What are these people to do?

They have a couple of options right? Continue to pay and hope that the value rebounds. Stop paying and go into foreclosure, or go bankrupt. This is the sad fact of life. If they got into the house without using an adjustable rate mortgage (ARM), it is probably safe to continue making the payment until the value come around. But what happens if they are 2 years into a 3 or 5 year ARM? The rate will adjust soon and the payment might be astronomical. It may even go up 30%-50%. Most couples can not afford this.

So what happens if they sell? They have to come to the closing with a check for the difference. How can they get out of this situation? I have some thoughts but I would like to hear what you think. Post what you might do in this situation. What as an investor can we offer to solve their problem and make some money for ourselves? Next week I will give you my thoughts and the personal best answer.
(Note: Everyone who posts their answers will be invited to a closed door teleseminar where we will discuss strategies and techniques that we can use to give us an edge over the competition. Make sure and include your name and email address in your post so we can send you the details for the call)

Dedicated to Multiplying Your Successes!

NOTICE: special NO COST Webinar presentation next Monday October 22nd at 7:00pm Pacific. We will be discussing Real Wealth for Living WellTM. How real estate investing can replace the income from your J.O.B. and lead you to long term wealth while providing you the lifestyle you deserve, NOW. We have decided to upgrade to a Webinar so you can view my computer screen rather than me just describing it to you. You can just listen over the phone if you would rather but you will not see the slides or my computer desktop. RSVP now to reserve your space. We are limited to 99 slots and 58 have been taken.

2007-10-17T02:32:00.000-07:00

Sub-Prime Meltdown and the Subject To Solution

Just last year a real estate investor could buy a rental property with 100% financing without documentation of income or asset verification. This practice has stopped and for a good reason too. This was also applicable to the regular home buyer whether it was a first time home buyer or someone looking to buy bigger or better. And least we forget there was a lot of second mortgages made for people who where just looking to tap into their house as if it were an ATM.

I knew people who were pulling out money from their house to buy cars like H2 Hummers, speed boats, jet skies or to go on that once in a lifetime vacation. I even met a couple in California that pulled all of their equity out of their house to have some personal work done. You know face lift, tummy tuck and breast enhancements. (And I thought guys went through mid-life crisis.)

What this has done was made houses over leveraged. People thought that their house values would always go up. But the roof fell in and the prices stabilized or drew back and now they owe $50,000 to $100,000 or more over what the value of the house is worth. What are these people to do?

They have a couple of options right? Continue to pay and hope that the value rebounds. Stop paying and go into foreclosure, or go bankrupt. This is the sad fact of life. If they got into the house without using an adjustable rate mortgage (ARM), it is probably safe to continue making the payment until the value come around. But what happens if they are 2 years into a 3 or 5 year ARM? The rate will adjust soon and the payment might be astronomical. It may even go up 30%-50%. Most couples can not afford this.

So what happens if they sell? They have to come to the closing with a check for the difference. How can they get out of this situation? I have some thoughts but I would like to hear what you think. Follow this link to my blog and post what you might do in this situation. What, as an investor, can we offer to solve their problem and make some money for ourselves? Next week I will give you my thoughts and my personal best answer.

(Note: Everyone who posts their answers will be invited to a closed door teleseminar where we will discuss strategies and techniques that we can use to give us an edge over the competition. Make sure and include your name and email address in your post so we can send you the details for the call)

2007-10-08T05:36:00.000-07:00

What did Columbus do 515 years ago that will make you Wealthy Today?

Happy Columbus Day, Today we celebrate the founding of America by Christopher Columbus. Everybody knows the story of how Chris took off from Europe hoping to find a shortcut from the Spain to India looking for spices and riches. Old Chris was able to talk Queen Isabella of Spain into funding his journey. Chris took his three ships; Nina, Pinta and Santa Maria on an 11+ week voyage before arriving in the new world.

Now I don’t suppose that many of you have ever been out to sea for 11 weeks without seeing land. Having done so, I can tell you that it can be disconcerting. But I much preferred being part of a battle group of 13-17 ships than being just three small ships with a total of 90 men. In case you didn’t know it but the men of these three vessels were rather un-amused by the length of the voyage and not really knowing where they were going.

They were upset and ready to kill Columbus to go home.

Like most business people of today these intrepid adventurers had a but vague idea of the purpose of the trip: “finding a new route to India”, but no one had the foggiest notion of how to get there. They sailed around for a long time testing and making commitments toward their path. And when they finally arrived to their destination they still had no idea how lost they really were. They were just looking for gold and treasure to bring home.

This really describes a whole lot of real estate investors in the way they are trying to make money by investing. Most have heard of this thing called real estate investing (India). They knew that there was wealth and riches to be had there (gold and spices). They were able to put together some money to invest or able to borrow from friends, family or retirements (Queen Isabella). They jumped in the nearest vehicle that might be able to take them such as landlording, wholesaling or Subject to (Santa Maria). They buy the house to fix up in the wrong neighborhood, take too much time to rehab, do half assed work and then can’t sell or rent it out and are in trouble, (landing in the Caribbean).

Christopher Columbus’s Biggest Blunders

Sound familiar? It is a good thing that Columbus took four more trips back to the new world before he died or we may never have heard from him. Are you afraid of this happening to you? Are you afraid that you have chosen the wrong path and are ready to turn around? Are you afraid that you don’t know enough to get started so you are holding back? What if Christopher Columbus let his doubts stopped him? What if he let his men who were upset and ready to mutiny, talk him out of continuing his journey? What language would we be speaking today? What would have happened to the New World? Who would have discovered it?

If not Columbus then Who?

I do know that someone would have. Somebody will always pick up the torch and run with it. If you make the decision to not take action where will you be 1 year from now? How about 2 or 5 or 10 years from now? Columbus is being Monday morning quarterbacked to this day, people rewriting history to tell us what a monster he is. That he was a slave trader and drunk and thief as well as many other things. I don’t know what he was as a person. I am sure that he had his faults and the practices back then were barbaric. Thank GOD that we have cam as far as we have.

But the fact is, He found and opportunity and took it. He did what he believed would work and he diligently went to work getting the resources he needed to do it. You can learn this same lesson in perseverance and determination to achieve your goals. Learn the steps necessary to accomplish what you want and then taking them. Once a week at least you should be double checking to ensure that you are on target. If not make your adjustments and continue on.

Hope you had a good weekend and are ready to go and make your week the best one so far this year.

Congress calls for "mortgage czar" - Yahoo! News

2007-10-03T14:50:00.000-07:00

Here we go again. The politicians are rallying behind more and bigger government and using stupidity in the mortgage industry to do it.

Why don't they just prosecute the people who broke the law and realize that there were a lot of people who couldn't afford the payments getting new mortgages. They are in for some trouble now. The prosecutors should be on the look out for mortgage fraud and anything else that was against the laws.

We should also not be bailing out the investors on Wall Street who where placing most of their money in Sub-prime loans. They are the one's who set the terms of the loan and they should bear the brunt of the declines from the bad loans.

Sorry, I just think that there are more important things for the US Government to worry about than bailing out investors who should know better.

Congress calls for "mortgage czar" - Yahoo! News

2007-10-03T08:24:00.000-07:00

Is Now the Time to Jump In and Invest in Real Estate?

Even in the midst of the media hype on the Housing Bubble there are reports starting to leak out in magazines and V news as well as blogs talking about how there are some growth in certain areas and that now just may be the time to jump into real estate as long as it is in the those appreciating areas.

Yesterday I picked up the final issue of the magazine Business 2.0. The headline read “How to Play the Real Estate Bounce Back”. It was a good article and restated what every good real estate investor knows. There is not a National Real Estate Market. Every market is local and can be as small as a single neighborhood. Can you name the neighborhood where there has been a decrease in median priced houses in King County and why?

Remember you can find a deal in any market you just have to be looking for it and know what to look for when you see it. I will tell you that right now there are a lot of deals in King county. If I were just starting out and had some money to invest I would be buying houses on large lots and breaking off parts to sell while keeping the house. A little knowledge will go a long way.

Do you know the top 10 cities to invest in according to Business 2.0? What do they have in common? They are located in the Southeast. Why? They have positive appreciation and low median prices. I would look into them if I was a buy and hold investor looking for cashflow and long term appreciation. You can see what the ten best cities are by visiting www.business2.com.

I will be doing several presentations on real estate in the Seattle area over the next several weeks. As most of you know I am the Chairman of the Real Estate Association of Puget Sound, the local not-for-profit investing association. I have been asked to be the featured speaker for the REAPS North End group in Everett on October 4th where I will be talking about how to use the best expert professionals to accelerate your real estate investing career. October 15th at 6:30pm, I will host the REAPS East side group and will be talking about real estate investing as a business and what you need to do to set yourself up properly and where you can put systems in place to facilitate your growth. You can find out and reserve your spot on www.reapsweb.com.

On October 16th at 7:00pm, REI Success will host a free evening where I will talk about Real Estate Investing, how you can use this as a technique to supplement your income or totally replace your income as I did. It is my belief that real estate investing is a “Get Rich Business” but it takes time and education rather than something you do for a year and then are set for life. This is not a get rich scheme by any stretch of the imagination. I have always played this as a change my lifestyle business and have made it such. And I will talk more about that on that night. Please RSVP at www.REI-Success.com or visit for more information.

On October 22nd at 7:00 pm Pacific time, I will be hosting a Teleseminar on how to use real estate investing to build Wealth for Living Well. It is my belief that living well is the primary motivating factor for the desire to have a lot of money. I am a firm believer that you don’t have to have millions in the bank to live well. As such I advocate living well now and setting up your business to accommodate your lifestyle. Making money you need to live well now as well as setting yourself up to live well in the future. I will be talking on how to do this through the vehicle of real estate investing. Please visit www.REI-Success.com to register for this teleseminar, we will send you the telephone number and conference code for your convenience.

Anti-Flipping Law in Washington State – Q&A

Last week I wrote about this new law that was passed under the radar through the state government. Making it mandatory that anyone that is fixing up a house for resale needs to have a contractors license or they will be prosecuted. See last weeks email for details. I have received some questions regarding this and though that I would include them here.

The first Question is from Silvio M:

In view of your Wash State law, please comment to this: An investor buys and flips property, without doing any repairs or contractor work, no permits are asked no activity is done, just flip it to another investor,

That end investor, does engage a licensed general contractor in Washington, charges accordingly or may refer to be in the deal with materials shared cost, proportionally to the general contractor deal percentage.

Answer:

The first investor will not need a contractor’s license because he is not engaging in any work on the property. Therefore the transaction is not illegal. The Second investor has hired a licensed contractor to manage the renovation so he is covered.

If the second investor partners with the general contractor and uses a new company then the new company will need to either hire the general contractor as anyone else would or the new company would need to obtain a license.

Second Question was from a Saturday meeting with an investor that shall remain nameless:

Is there any way to get around being a contractor and is there any way for the state to enforce the law?

Answer:

It is not worth trying really hard to get around the law by doing something illegal. This is a criminal offense not civil. So abide by the law. It is not difficult to get a contractor license. There are a few really stupid contractors out there, and they got it so I figure that anyone can apply. (No replies from the smart contractors are necessary; this was said tongue in cheek.)

This is just something that we will have to comply with in order to do our business properly. REAPS is investigating a way to make our voices heard in Olympia. According to Chris Benis a lawyer from the Attorney Panel at last weeks REAPS meeting, this was drafted specifically to go after flippers.

Now I want everyone to know that I am not a lawyer nor do I play one on TV. These are my opinions and appropriate legal advice should be sought to ensure coverage of your posterior.

Go out and have a Great Week.

2007-09-26T07:04:00.000-07:00

Are you flipping houses without a license?

As crazy as that sounds, if you are buying a house in the state of Washington and fixing it up then resell it you may be breaking the law. I was notified in the local real estate investor’s association newsletter that any investor “Flips” it, is now required by Washington State Law to become a registered contractor.

I have read the law on the Washington State website. It was passed in an attempt to regulate unlicensed contractors and passed unanimously in the legislature and the senate and then signed into law by the Governor on May 11th.

This law is well and good but the problem as I see it is the definition of contractor:

"Contractor" means any person, firm, or corporation who or which, in the pursuit of an independent business undertakes to, or offers to undertake, or submits a bid to, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish, for another, any building, highway, road, railroad, excavation or other structure, project, development, or improvement attached to real estate or to do any part thereof including the installation of carpeting or other floor covering, the erection of scaffolding or other structures or works in connection therewith or who installs or repairs roofing or siding; or, who, to do similar work upon his or her own property, employs members of more than one trade upon a single job or project or under a single building permit except as otherwise provided herein. "Contractor" includes any person, firm, corporation, or other entity covered by this subsection, whether or not registered as required under this chapter.

What does this mean to us real estate investors. It means that we are limited in what we can do, even to our own property. I also received an email from a friend of mine Dean Dretske who wrote about it in his blog and covered it really well. Please visit his site to read this well written article.

How did something like this slip through without anyone knowing about it you may ask? Good question. It was done under the guise of protecting the public like so many good intentioned but poorly executed laws. It was directed at people posing as contractors but the law stepped over the line into personally owned real property. I believe that they were also trying to generate revenue for the government as well as it will make more people become contractors.

This is another case of one industry saying “thank GOD they are going after someone else rather than me”; which in turn had an adverse impact on many industries ours included. Keep a watchful eye on the regulators because they see themselves as protectors and sometimes get a little power hungry.

The only way I can see around this law is to register your company as a general contractor and get the appropriate bonding and insurance; which will just add to our underlying costs of doing business. This is just one more thing for us to do in order to comply with the law and protect ourselves. Becoming a contractor is not the end of the world and is not overly difficult. But it will be a barrier to entry for many people getting into real estate investing but most will take up the challenge.

In the mean time you can attend your local REIA groups to find out what else is going on with your legislature. Maintain a defensive posture and form a legislative watch to see these things coming down the pick. Put your money where your mouth is. When our local REIA club tried to raise money for this effort not many people donated because they didn’t see this affecting them. Dust off the cob webs from your wallet and join together to combat poorly drafted legislation.

Also with the Sub-Prime melt down and the increasing foreclosure rates there will be more government action coming down the pike.

Be mindful and alert and take action against them. Be above board in all of your business actions so as to not give them a reason to see ghosts in the wood shed and cover yourself in everything you do with appropriate disclosures and CYA forms. And find a good legal counsel who knows the intricacies of real estate and investing.

And as the Sergeant from the old show Hill Street Blues use to say – “Hey, Let’s Be Careful Out There!”

2007-09-19T08:25:00.000-07:00

5 Sub-Prime effects that investors need to know NOW!

As a real estate investor you are keeping up with the news that is affecting our industry, aren’t you? Since the beginning of March we have been riding the crashing wave of the sub-prime mortgage market. It has been all over the news and written and talked about on internet forums, blogs and chat rooms extensively.

Let’s quickly review what a sub-prime loan is for those who may need to be caught up. Sub-Prime lending has been around for decades. It is when a lender lends money on a property that does not meet the conventional underwriting requirements. An example is a loan to someone with a low credit score, low down payment or does not have verifiable income.

These have become widely used in the last 4-5 years as a way to sell more property and to cash out some equity in a property that has really spurred the growth of the economy since the dot.com crash of 2000. It has been fueled by extremely cheap money made available by low short and long term interest rates. As I write this article I am waiting for the Fed Chairman Ben Bernanke to tell us whether he is going to lower the interest rate as expected or not. I imagine that he will.

The biggest issue that we as a nation is having with the sub-prime fallout is record foreclosure rates. Just today RealtyTrac, Inc. reported that the foreclosure rate for August 2007 more than doubled from the same time last year. It is up 36% from the previous month alone. The top 10 states for foreclosure are Nevada, California, Florida, Georgia, Ohio, Michigan, Arizona, Colorado, Texas and Indiana. This is absolutely amazing.

What does this mean to you as an investor?

1. You will not be able to get 100% loans especially on a non-owner occupied property. This will require you to put more money down on a purchase if you use conventional strategy of buy & hold or fix and flip.

2. No-Doc and Stated Income loans are going to be harder to find. If you are a full time real estate investor without a regular W-2 type job you will find it more difficult to qualify for loans for your property. I have it on good authority that if you can prove your income with Tax returns and or bank statements you will find it much easier to find capital but be aware you will need to bring some money to the table. You will find it almost impossible to find a 100% LTV loan right now.

3. Rising interest rates on those adjustable loans that have been made in the last 3-5 years. What this means is that if you purchased a home either using an adjustable rate mortgage or take over one subject to that was made since 2002 and they are maturing, your payments are going to go up. Probably not just a little bit either. I have talked to people who had their mortgage payments almost double in the last year. Ouch. I can tell you that their incomes have not kept up with that.

4. Houses are selling more slowly that they have in the past. Not too long ago in the area where I purchased houses regularly we had an incredible 18 days on market. That means from the time a house was listed with an agent the house was under contract to sell in just 18 days. And that is average for all houses in all price ranges for that area. I will tell you that in August that same area had a “Days on Market” of over double that. Ahh what a difference a year makes. This is still fantastically fast for most markets; Denver is looking at over 180 days on market average. (Note: sure makes it easier to buy houses now because people are more motivated)

5. Limits the number of buyers for properties when you sell. As an investor you count on either renting out or selling your properties quickly. Right now it is making it more difficult to sell your house to the first person to come along. Quite a few of the buyers over the last couple of years are now out of the market. Either they can’t afford the house or they are afraid of what the market is going to do and are holding off for now. This is not all bad though, it makes the other property owners more motivated to work with an investor on either price or terms.

The Sub-Prime market and the slowing housing market in general can be a big boon to you as an investor. You just need to have the right tool in your tool belt to make the most of the situation you find yourself in. There are cases where buying and holding make sense, as well as using one of the more creative investing techniques. So just keep your eyes open and make the most of it.

2007-09-12T09:20:00.000-07:00

Just in Case You Missed It...Here Are Our Renegade Real Estate Warrior Winners!

Congratulations to our Overall Winner: GERALD ROMINE

Also, congratulations to our winners of each industry category...

Motivation Warrior of the Year - Bill Twyford
Wholesaling Warrior of the Year - Charles Petty
Rehab Warrior of the Year - Pete Youngs
Subject To Warrior of the Year - Terry Wygal
Short Sale / Foreclosure Warrior of the Year - Mark Klee and Caryn McKinney
Asset Protection Warrior of the Year - Darius Barazadeh
Marketing Strategies Warrior of the Year - Dave Zahala
House Finding Warrior of the Year - Reggie Brooks
Business Tool Warrior of the Year - Gerald Romine
Creative Financing Warrior of the Year - Edwin Kelly
Investing Strategies Warrior of the Year - Dave Whisnat

You can check out the final scoreboard by clicking here.

Thanks to everyone, presenters, hosts and attendees. I know that all of you were able to learn a lot of really good information from the speakers. I would say that my favorite were Dave Zahala talking about using Radio and TV to get leads, Mark Klee and Caryn McKinney and their presentation on buying houses post Bankruptcy. There were many others that I was impressed with and learned a lot from. But Hey, I can only have a couple of favorites, right?

As a parting thought on the Renegade Real Estate Warriors webinar series is that it was an ambitious undertaking. There were too many presentations, too many technical issues and frankly too many things happening back to back. We all live and learn any time we test something. I guess this is what Thomas Edison meant by trying many things because some were bound to fail. Or in this case be too much info in too short a time.

But thank you for sticking in there with us. I know that I speak for Karen, Terry, Russell and myself when we thank you all for being there with us for the last couple of busy months.

Now it is time to take what you have learned from these webinars and apply it too your business. Go take some action...

2007-09-12T08:15:00.000-07:00

The Art of Renovation

Renovating houses has been on my mind for a while now. As you know my family and I just returned from the Philippines. While we were there, we were having my Father-In-Laws house renovated. I had to stop and wonder about just why we do renovations on properties that we own.

With a personal residence we do so for a variety of reasons, update the house to keep it current, add new features to make it more livable, make things bigger or just more functional. But with investment properties that we are going to be selling or renting there are really only three things we are doing:

1. Maximize the resale value

2. Attract buyers or renters

3. Sell or rent the property quickly.

We need to do all of that while keeping in mind the budget and the speed that we can complete the tasks.

When I talk to a lot of new investors they still look at the rehab as if they were going to move into the property. They want to renovate the house to its maximum potential, adding rooms, enlarging kitchens and baths, putting in granite and high end appliances. They think that they need to do all of this to achieve those three previously stated goals. But let me tell you that from personal experience you do not have to go to extremes.

First, do you understand the differences between the two classifications to renovating a property: Rehabbing and Remodeling. The difference between the two is easy; are you moving walls? And are you required to pull permits? If the answer to those questions is yes then you are doing a remodeling. I draw the line at rehabbing. It is faster, costs less and I can maximize the value of the property while maintaining my tight deadline.

I typically concentrate on the two areas that sell most homes, Kitchens and Baths. This is where I spend my time and money. I also paint the interior of the property and update the carpet and flooring. I usually upgrade the doors, trim and molding to a similar look of a high end property. I replace the light switches, outlets and covers, as well as the door hardware to make the things that people touch feel new. I duplicate the look of a high end home by putting in fixtures that are knock offs of those high priced items in the Street of Dreams houses.

The landscaping and curb appeal are important as well. I make the house inviting to those passing by. I want people who see the for sale sign in the yard feel that they must take advantage of our instant open house to see what this house looks like. My goal is to make the potential buyer just die to have this house as their own. Whether selling or renting you want the same emotion from your customer.

But contrary to conventional wisdom I will spend a fraction of what people expect and get in and out of the house in record time by following the systems and procedures that we have in place. By using the proper professionals and having a standard list of materials I have this down to a science. Our goal is maximizing the value of the house; while obtaining the highest return on investment for the money spent.

And please remember, time is money when you are rehabbing. Every day you go over your allotted time you are losing money and not just the holding costs. If you miss the peak selling cycle you can loose your entire investment if the price of housing declines or interest rates rise.

Systemizing your business is where you make your profit in this business. Streamline and automate tasks with checklists and requirements for your contractors. Work with those best expert professionals who can do your tasks properly the first time without having a bunch of call backs. Do your job up front to minimize change orders and you will find that you are able to achieve your goals of getting the house sold soon after you purchase it.

Making money faster is the only way you can survive. Cash is king, having equity tied up on a house that you are trying to sell will not put clothes on your back of food on your table. So get that rehab finished and cash the check. Then go and do it all over again. That is the business that you are in.

2007-09-05T13:42:00.000-07:00

Just in Case You Missed It...Here Are Our Renegade Real Estate Warrior Winners!

You can check out the final scoreboard by clicking here.

But thank you for sticking in there with us. I know that I speak for Karen, Terry, Russell and myself when we thank you all for being there with us for the last couple of busy months.

Now it is time to take what you have learned from these webinars and apply it too your business. Go take some action...

2007-09-05T12:45:00.000-07:00

Wealth Acceleration Strategies for Real Estate Investors

We will all agree that real estate is the best way to build wealth. Using real estate helps by using one key method that almost every other investing strategy does not offer. That being Leverage or borrowing against your property to control something more valuable than the amount of money invested. I can hear you yelling; “What about trading stocks on margin?” Yes, you are right that with a trading account you can trade limitedly on margin or only putting a fraction of money up for the stock. But that is very limited compared with real estate.

I have done a 100% LTV mortgage on an investment property before. Now since the Sub-prime melt down you will not be able to do that for a while. But still, people routinely buy property with less than 20% of the purchase price down.

Assume you are going to buy a single family house to rent out for 5 years and then sell. So you buy a $400,000 single family house purchased using a 80/15/5 conventional mortgage. What does that mean? 80% LTV first mortgage, 15% LTV second mortgage and 5% down payment. You bring $20,000 plus closing costs to the escrow company when you buy the property. So for $20,000 you control a $400,000 piece of property. Your monthly payments on your mortgages are $2,100 including your taxes and insurance. You receive $1,800 rent on the house. And it is vacant for 1 month out of every 12 months because of finding new tenants. Now this is a very conventional deal but very realistic in our current market.

Let’s take a look at the numbers:

	Monthly	Annually	Total
Costs	$2,100	$25,200	$126,000
Income	$1,800	$19,800	$99,000
Net	($300)	($5,400)	($27,000)

So looking at the numbers this way it does not look like a very good investment. Paying someone to live in your property $27,000 for 5 years. Remember this does not take into account any repairs or tax implications these are just the raw numbers. But let’s look at it a different way. We are going to assume for the sake of argument that the property appreciation is 10% annually using round numbers. This a absolutely achievable in the Seattle market but will vary depending upon area. Here is really what you are controlling:

Purchase Price:	$400,000
Future Value 60 Months 10%annually:	$644,204
Total Equity Growth:	$244,204
Total %	61% total growth

So your investment of $20,000 plus your additional expenses of $27,000 of holding cost will bring you an additional $197,204 over that same 5 years. How many of you would spend $47,000 to make $244,204 bringing you a rough profit of around $190,000. That is really the true path to wealth in real estate investing. The use of leverage is really what makes this happen for you. If you were to just invest the same $10,000 at a 10% annual interest you would only make $6,105 instead of the more than $190,000. So using the leverage only found in the real estate make you very wealthy when used over time.

Now most of you know that I am a big proponent of creative real estate investing and may think that there is something hypocritical about talking about going and getting a loan and investing for the long term. Remember. This is tactics that I use to make money to invest long term for growth. So this is very true of all real estate. So please take the time to develop a strategy to use the best of both worlds.

2007-08-29T08:00:00.000-07:00

The Essence of Wealth

As I sit here spending valuable relaxation time with my wife’s family in the small fishing village of Mabayo, Morong, Bataan in the Philippines, I find myself thinking on the value of everything and the Essence of Wealth. I am sitting at the kitchen table in a small house that has been Evelyn’s family home for over 30 years. It is not much, simply 20 feet by about 40 feet. Over the last two months we have added a second floor to the house and they are right now in the process of building the walls and adding the roof to the second floor.

Listening to the villagers’ talk they consider that wealth. For someone to add that much room to their house they must have a ton of money. In actuality the total renovation; consisting of adding the second floor with a bathroom and four bedrooms, has cost around $12,000. Nothing fancy, mind you, but we have doubled the living space of the house. Consider doing that anywhere in the US and you would have to add a zero to the price in even the least expensive area of the country.

Well Evelyn’s father, brother, sister-in-law with their two children lives in the house. It will be a treat for them once it is done. There will be air conditioning and running water once the house is finished. The AC is considered a luxury to everyone in the village. The running water is more practical but not a necessity. Until now they bring pails of water into the house from the pump in the yard and then use a pail to flush the toilet, or shower or wash the dishes. The conditions are primitive by western standards, but normal here. You get use to it. I lived in Japan for almost three years with only drop toilets and cold running water. In actuality there are more people in the world who live like this than there are those that have running water and flush toilets.

The point that I am trying to make is that real estate is the foundation that all true wealth springs. We were visiting with relatives and found that squatters had taken over some of their property. The matriarch of the family was ill and unable to fight the encroachers. By the time that she had recovered the squatters had built a shack and was claiming ownership. The local politicians were more interested in having the added votes than in seeing justice done so our aunt has lost land that has been in the family for over one hundred years. Property rights are not guaranteed in many countries. We take them for granted in the US.

We have looked at investing in some condos in the Manila area and have two facts that are making us think twice; the above mentioned Property Rights and the ability to use leverage in the form of a mortgage to buy the properties. The Government is constantly besieged by problems. I have been in the country in 1986 when the first People’s power revolution ousted Marcos. I was also here in 2001 when People’s Power II installed the current President. Ever since the coup, there has been massive demonstrations and political unrest. Not a good indicator for the security of property rights.

Then add the fact that you can mortgage a property but you cannot have possession of the property until it is paid off in full. What does this mean? In truth too many things to ever cover in a short article but while I was sitting in a Manila Steak House with my nephew last Thursday evening we came to realize how good we have it in the US. John’s mother-in-law purchased one of those condos that I had mentioned earlier. Paying cash for the unit was easy for her because her family is well off. So for them to come up with $250,000 US to buy a condo in Manila was nothing. But for the majority of people in the Philippines it is just beyond reach.

In the US if you can come up with 20% of the purchase price you can find a loan to cover the rest. But in a lot of places in the world that is not an option. Even with the Mortgage industry heating up and the Sub-prime melt down causing stocks to decline and the economy to go soft. We still have it made. As an Investor in the US market you have to take inventory of your advantages and run with them.

Most of us didn’t have the money to go and buy 10 or 15 houses to get started. We had to learn to be creative and set goals to achieve what we were determined to do. Not unlike everything in life as a matter of fact. Without knowing where we are going sure makes the path getting there awfully long. I honestly thought I knew what my goals were. But alas, I read the 4 hour work week and now my goals have been turned upside down. I am in the middle of revisiting them as we speak and I can’t imagine a better place to do that when I am so removed from the hustle and bustle of everyday life. As a matter of fact I have to take a 1 hour Jeepney ride to visit the nearest internet café to send this to Jennifer. I will not even check my email as it is such a pain to do from a slow internet connection. I know that Jennifer can reach us in an emergency. I hope everyone takes a minute to rethink their goals and to read the book “4 hour Work Week”. It is worth the time, and if you don’t have the time you really need to get a handle on it because you will go nowhere if you don’t.

I look forward to the next episode of this newsletter as we will be talking about ways to accelerate your investing.

2007-08-29T01:19:00.000-07:00

Just in Case You Missed Last Week...Here Are Our Renegade Real Estate Warrior Winners!

You can check out the final scoreboard by clicking here.

But thank you for sticking in there with us. I know that I speak for Karen, Terry, Russell and myself when we thank you all for being there with us for the last couple of busy months.

Now it is time to take what you have learned from these webinars and apply it too your business. Go take some action...

2007-08-22T09:00:00.000-07:00

Renegade Real Estate Warrior Update: And We Have Our Winners!

Congratulations to our winners of each category. And our Overall Winner is: {Name}

You can check out the final scoreboard by clicking here.

But thank you for sticking in there with us. I know that I speak for Karen, Terry, Russell and myself when we thank you all for being there with us for the last couple of busy months.

Now it is time to take what you have learned from these webinars and apply it too your business. Go take some action…

2007-08-15T11:02:00.000-07:00

Choosing the Right Target Market

When investors approach me about where they should look for houses they are looking for me to tell them a general rule of thumb in distance from their house. I remember when I first decided to become a real estate investor I was looking for the same answer. I read Robert Kiyosaki’s book Rich Dad Poor Dad and was looking for the magic bullet. He said to look for properties that were within an easy drive from your house when starting. You know 30 – 60 minutes or less than 30 miles.

That made my decision even tougher because there were so many different types of areas in that range. I could go to one of the highest valued neighborhoods in the country or go somewhere where I could buy drugs easier that finding a house. That really didn’t help narrow down my choices at all.

I have since gone to many different boot camps by many educators and each one said something similar. Others at least specified demographics as well as geographic areas. That helped somewhat, but really not enough. It was still a large area with nothing that was really helping me choose the best area to farm.

I dug in my heals and decided to do my home work. First based upon the type of investing I was doing I knew that I needed motivated sellers, someone who would sell me their house creatively. That narrowed it down somewhat. I knew that I wanted to be able to sell my house quickly once I was ready so I new that it would have to be in that sweet spot of price. I new that I would have to buy it for less that median price and so that helped me choose an area had a preponderance of houses in that price range.

I know that I didn’t want to do a major renovation so I knew that I wanted pretty neighborhoods with newer houses rather than a house that was 50 years old and badly outdated. I wanted people who were more inclined to me motivated to sell creatively so I decided to target people who were behind in payments or about to be behind. I knew that with the sub-prime meltdown the people who had mortgages that had adjustable rates were more likely to be in need of selling their house quickly.

So with all of this information I at least had a likely prospect in mind. In next week’s eNewsletter I will go farther in depth about how I choose where I buy houses in the tough Seattle market.

2007-08-15T08:15:00.000-07:00

Wrapping Up the Renegade Real Estate Warrior Contest!

Well it has been over two months of back to back real estate education from some of the top experts from around the country. I know that I have learned a lot about many different things during the course of these last 70+ days to put into practice in my real estate business.
I would like to thank you for sticking with us during this process. As you know something on this scale has never been tried before in this industry. The speakers were fantastic sports to try out this new concept and I honestly believe that you the listener benefited from their hard work. Every one of the presentations had something to put into your business and help you with one thing or another.

I would also like to take this moment to say thanks to you for putting up with the technical issues that we had as well as the fact that some of you had a tough time listening to the replays online. For all of that I apologize. As you may know when you put something technical like this on, you have to target the most common denominator: Windows over a slow broadband connection. This is especially tricky with video over the Internet. We have tried to alleviate most of the issues and have packaged these up in DVD format for those of you who could not get to them online. If you have not ordered one before you can find out more information about this by clicking here

There were also some last minute schedule changes when a speaker was unable to attend or had a conflict and could not fit it into their schedule after all. As you know some of our speakers are comfortable with the Webinar technology and others were not. We felt that it was important for you to be able to get there information even though they decided not to hold a webinar.
We are close to winding down from this contest only one and a half more weeks left. We still have some great speakers to come including the hosts of this contest. I hope that you have voted for your favorites. The scores are being tallied up to this point and a up to-date scoreboard will be available towards the end of the week. As always Renegade Replays at www.RenegadeReplays.com is the hub of this contest. You can always check back on this website for updates and links to replays. The scoreboard will be available at this site.

2007-07-05T15:42:00.000-07:00

Townhouses and Condos in Downtown Bellevue.

I ran accross this article that was very enlightening regarding the infill of down town Bellevue. Understanding the urban density issue will make you a more powerful real estate investor.

Local News Town houses pop up among the Bellevue high-rises Seattle Times Newspaper

2007-06-12T22:37:00.001-07:00

Death, and what to learn from it...

Last Saturday my wife, daughter and two of my daughters friends spent the afternoon at Bellevue Square Mall. The girls went window shopping while Evelyn and I just wandered around watching everyone spending money. We had a Cuppa and just enjoyed each others company. We were planning on spending the rest of the day at the mall, going to a movie and then eating at PF Changs.

While we were in the theater my phone starts to vibrate. I never answer the phone so I let it be. Then in rapid succession it rang 3 more times. I don't know about you but whenever I receive many phone calls back to back I know that there is an emergency. Let me explain a little bit. I am the last of 11 kids and have hundreds of relatives on both sides of my family.

My parents were the same age as most of my friends grandparents. What does that mean. When you have a large family and many are older you have a disproportionate amount of deaths in your family. By the time I was 15 I was a pallbearer at several funerals. I know what those phone calls meant. Someone died or was in the hospital about to die.

I pulled out my phone and looked at where the missed calls originated. Montana, California and here. Family all of them. The last time I had received this type of call was when my brother was rushed to the hospital with a heart attack. The time before that was my mothers passing last year. Before that was my brothers heart attack. I could go on and on but I remember those calls since I was a little kid. "Son, it's your grand father.", "Paul, your brother was killed", "Paul, your uncle or aunt or father, etc..." Did I tell you I dread phone calls?

My Mother was sickly for most of my life. She had several strokes and was in the hospital quite a bit. For the last 10 years of her life she was in the hospital many times. Many of those we thought she would pass away so we rushed back to Montana to be with her. It was our duty. It was our responsibility. We needed to be there. I needed to be there.

So, four phone calls in less than 5 minutes by different relatives were not good. I knew it. Being in the middle of the movie and having Rachel and her two friends with us. I decided not to leave the movie. I tuned out. Frankly I can remember the last half of the movie. I was trying to figure out which of my family was gone. I have been worried about my brother for the last year. I expected it to be him.

Let me tell you a little bit about my family. Like I said I am the last of 11 children. My father was a hard working Miner. My Mother was a waitress until she had all the kids and then she staid home to raise us. There were 7 older children and then the 4 younger ones. Kind of two groups. The eldest of us was Judy, then Steve, Cathy, Rick, Neil, Tom, Linda, Dan, Laura, Anne and myself. The difference in ages were right around 20 years. Meaning that I was literally raised with my nieces and nephews.

My brother Steve, was in the Army when I was a baby, spent 2 tours in Vietnam. Judy was married and lived in Blackfoot Idaho. Cathy and Rick were married the same year and so my family grew. Neil moved to Detroit to get a job at Chrysler. Tom went in the Marines and Linda got married by the time I was 4. So my big family grew and shrunk all at the same time.

I Only saw Judy during the summer when we went to visit for a couple of days or when she brought her children up to stay with us for the summer. Steve was killed in a plane crash in 1980. I never really got to know him. I spent a couple of hours alone with him the summer before he died.

I didn't know Neil until just after my grandfathers funeral he took me to Detroit to spend two weeks with him when I was 11. (Best time of my young life). Cathy and her family moved to Miles City so I didn't get to know her until they moved back when I was in high school. Tom was the brother I had known only after he moved to Seattle when he got out of the military. I would say that I am the closest to him of all the brothers.

Rick was the brother that I spent the most time with. I literally grew up with his kids. I went to Jr. High and High School with my niece. He was more like a father figure than a brother and like most kids I only needed one father. So we had a strained relationship for many years. I was like the kid that did everything to distance myself from him.

Linda was the sister that I clung to. She was the one who raised me. Her children were only 5 and 7 years younger than me and I spent most of my time with them when I was young. Dan, went in the Navy when I was 9 years old and was the brother that I always fought with. I did everything I could to do everything just a little bit better than he could. I don't know why I felt that way about him. I did follow him and my sister Laura into the Navy. Best thing I ever did.

Laura was the sister that I always followed when she changed churches. She was searching for something and went from religion to religion searching for it. I went with her. She is a very caring person but always looking for an outside influence to help her. I recognise that and appreciate her searching.

Anne is the person that I was always closest to. She is only 5 years older than me, so she was the last to leave the home. I was 12 when she married and moved away. She took care of me. She was my friend and confidant and to this day someone that I appreciate having around. I found myself everywhere I went having a friend who was always like Anne. There for me and fun to be around. Anne and I will always be friends as well as siblings.

There have always been issues in our family. With one this large you must expect that. We have grown apart and let contact lapse between us. There are always the memories.

Back to the phone call. After the movie lets out I tell Evelyn that something happened and that I think that someone has died. I check my messages and find the typical "Paul Michael, call me." or "Paul you need to call me back right away." and finally the one that breaks my heart is the one from my niece that says "Paul, this is Kate, would you please call me right away."

Kate is Judy's oldest daughter. She is one of my closest friends and is really more like a sister than a niece. She spent every summer with me when we were growing up. I knew it would be bad. We had just talked that morning on the phone. It narrowed it down to one of two people that it could be. I would call her first.

She breaks the news to me that yes someone had died. It was her mother Judy. She had a heart attack or a stroke. Danny, Judy's husband, called the ambulance and they couldn't revive her.

Judy was gone. Not yet 60 years old and was less than two years away from retirement.

Gone.

Leaving her husband Danny, the best thing that ever happened to her, alone in Kansas.

Leaving Kate and her two sisters without a mother and their children without a grandmother.

But she did leave many memories for everyone...

My remembrances of Judy;

As a little kid who went down to the farm where Judy lived every summer for a couple of days. This was our only vacation. The only one we knew until I was 11 years old. She was a strong woman. Worked two jobs and was very strict. She was a great cook. Liked to laugh and smoked like no tomorrow. Judy was the hardest working person I ever knew. She worked from Sun up until sundown and then worked some more.

I didn't get to know her much as a child because ,like my mother, she had a rule that if you were in her house while the sun was up you were put to work. So we were always outside. As I grew older she had not come up to Butte as much and when she did I was out and about. When Evelyn and I moved to Las Vegas in 1991 we did have the opportunity to get to know her and Danny better. She was always a worker and I loved her.

I know that she loved the outdoors and was planning on selling her motel in the next couple of years so that she and Danny could move back to Montana to live in a cabin in the mountains.

Every year they spent a week to 10 days up there in the back country but she always made time for our Mother. She was a good woman. A strong woman. and she worked herself to death. She worked so that she could save enough money to retire to Montana and enjoy her retirement with her husband and family. She now will never see that dream.

What can I take from this? You have to set priorities. You have to have goals that are more immediate than retirement in some future date. Judy is not the first person who was not able to appreciate her retirement. The tales are many.

One of my college friends had a father that was an executive at Chrysler. His father retired and less than a couple of months into it had his mother die. He told me that his father worked for 30 years so they could have a grand retirement only to have his vision dashed within months.

I will not wait until I am 60 or 65 to retire. I will not save every penny I have to live a grandiose retirement. I will set my goals and priorities for the future but live my life right now. I will not put off for tomorrow what I should do today.

I challenge you to LIVE your life to the fullest now. Not then. Make the money you want and need but don't wait to start. Don't be afraid to challenge yourself. NEVER SURRENDER your life to the norms when the extraordinary will do.

I love my sister Judy. She was a great person. I will miss her and will remember her always.

I will learn from her mistakes and not make them myself.

This is a wake up call.

For all of us.

Business & Technology | Local home sales cool off; why are prices still hot? | Seattle Times Newspaper

2007-06-07T10:39:00.000-07:00

Seattle Real Estate prices still defy reason acording to the Seattle Times.

Condo prices are rising a staggering 17.6% on average. There are some good tips on where to look for deals when buying properties. THe flip side is these same deals mean that it will be harder to sell when it is time to do this.

Read the article and let me know what you think?

Business & Technology Local home sales cool off; why are prices still hot? Seattle Times Newspaper

Real Estate | Automated appraisal no real substitute for one done in person | Seattle Times Newspaper

2007-06-02T15:51:00.000-07:00

When we begin investing one of the most difficult things is to determin the value of real estate. I know that we advocate having an appraisal done to determine not just current value but also after repaired value. This article is really interesting because some investors are using technology to determine valuation rather than using an appraiser.

This article talks about the fight going on between the traditional appraisors and the online sources. Technology is making everything competative and as a result we consumers will have many more options.

The question is whether we can trust the stuff we get for free online. The answer is up to you as an individual.

Read the article it is interesting.

Real Estate Automated appraisal no real substitute for one done in person Seattle Times Newspaper

Real Estate | Lender lays off staff in Bellevue | Seattle Times Newspaper

2007-05-12T10:49:00.000-07:00

Sub-Prime woes reach the Bellevue Area.

Getting loans to buy a house is not the only issue with the Sub-prime lenders going belly up. We had 40 local employees loose their jobs.

Are we at the tip of the iceberg? or half way down the slope?

Real Estate Lender lays off staff in Bellevue Seattle Times Newspaper

Real Estate | Buying a home here: You'll pay even more | Seattle Times Newspaper

2007-05-09T09:38:00.000-07:00

This article in the Seattle Times as well as a news report on King 5-TV the other night were very indicative of the Real Estate Market in Seattle.

While we are slowing we are still very strong. Much to the consternation to the rest of the West Coast. Where housing has slowed and prices declined in many or coastal areas like LA, San Diego and San Francisco the market here in Seattle has seen strength.

I know that houses are still tough to find because people can list and sell or even sell FSBO and get a quick sale.

Real Estate Buying a home here: You'll pay even more Seattle Times Newspaper

2007-05-07T07:54:00.000-07:00

Investing in Foreclosures have always intrigued want to be investors. People think that they can come in a buy a property on the court house steps and make a killing.

I have been to many investor auctions around the country and am always amazed that people will pay top dollar on such a risky strategy. This is one of the reasons that I recommend investing in Pre-Foreclosure properties.

Frankly this is a lot of work and requires a marketing budget. There are many people who are afraid of working this much and would rather pass on the opportunity. Which is okay with me.

If you are are still interested in the strategy of investing in properties in foreclosure read the following article.

Foreclosure Investing is not as it appears

2007-05-07T07:52:00.000-07:00

This is a great primer on Mortgage Lending and will apply to all real estate investors as well as the clients they are selling their properties to.

Real Estate Subprime market news not all bad Seattle Times Newspaper

2007-05-07T07:48:00.000-07:00

Loan Modifications and Shortsale tax consequences. This is a very good simplistic explanation of how the IRS looks upon these procedures.

Real Estate Hey, IRS, ain't that a kick in the head? Seattle Times Newspaper

2007-05-07T07:42:00.000-07:00

Here is another piece concerning sub-prime loans and what the reporter describes as predatory lending. I am always constantly amazed that people who are stretching to get into a home or stretching to do a cash out refinance are complaining after the fact that they have been put into a precarious position.

This reporter basically absolves the borrower of everything they did wrong leading up to being put into a position where they may end up going into foreclosure. It is a very sympathetic piece to the person who puts themselves into harms way with their financial lives.

I am absolutely amazed that these people where told no many times as well as attended a first time home buyers class to determine their eligibility. They learned that they should not buy a house at this time in their lives. Yet they went about researching for a way to do so.

People must be held accountable for their own actions. The borrowers put themselves into debt in many ways. They then sought another avenue to buy a house after they were told they could not afford one. It is not like they laked for a place to live if they did not buy a house. They wanted to buy a house so they did.

I am not absolving the lender no matter how unflattering a light the reporter put her in. She offers a service to borrowers when they need a loan for what ever reason. She gets paid on commission for doing so. I don't doubt that she puts much effort into closing as many loans as she can. And no I don't feel sorry for her not being able to pay her mortgage if she was unable to close loans. A blind man could have seen this coming from a thousand miles away. You can read an article I wrote last September on this very topic on my website.

Local News Borrower, beware: Debt disaster looms as rates rise on easy-money mortgages Seattle Times Newspaper

2007-05-01T09:34:00.000-07:00

This will shed a little bit of light in the realm of Title insurance. We always pay for this insurance and most investors have no idea what they are paying for. When you come to our Boot camp in May there will be a representative of a title company there to ask questions. This will let us better understand what we need to do to make sure that we are covered and what Title insurance actually is and does.

Real Estate Cozy setups swelling price tag of title insurance Seattle Times Newspaper

2007-04-29T10:16:00.000-07:00

I thought this was an interesting article regarding new construction and Pre-Construction purchasing of homes for the purpose of turning for a profit:

Flippers flop as housing market cools - Yahoo! News

2007-04-25T19:38:00.000-07:00

Another one bites the dust. The Sub-prime lenders are going by the wayside rapidly. I was interviewed by them a few months ago for their Podcast that went out to 42,000 mortgage brokers around the country.

It is amazing what a mess the mortgage industry is in right now.

Mortgage Investment Lending Associates shuts down - Puget Sound Business Journal (Seattle):

2007-04-25T10:06:00.000-07:00

I was interviewed for this article in the Seattle Times by the reporter. The reporter made me sound much more neutral in the article than I really believe that I am. In my opinion I feel that the contractors are looking out for themselves and trying to penalize investors for riding on the builders coat tails.

There is definitely a danger having too many investors in any one project. But I think that there should just be a cap on the number of investors rather than these silly penalties.

As most of you know I am not a big fan of this type of investing anyway. I think it is for the lazy investor who does not know any better. I really think that anyone getting into this risky type of investment needs to ensure they know the contracts inside and out and really has the money and credit to weather any down turn in the market.

Real Estate Tactics in place to deter buyers from flipping Seattle Times Newspaper

2007-04-16T10:14:00.000-07:00

This article is a good general read for people who are in the market for a mortgage. It applies whether you are a regular home buyer or if you are an investor.

Real Estate Shop around for the best mortgage deal Seattle Times Newspaper

2007-04-15T09:37:00.000-07:00

This is how the banks are reacting to the increase in Foreclosures. I am interested in how this will work for those people in foreclosure. Most of you know that my wife Evelyn is a Forbearance specialist. Meaning that she helps people stay in their home while they are in foreclosure.

It is a booming business. But do be careful because you are helping people who needed it desperately. Do not promise more than you can deliver and keep your ethics at the front of your mind.

Real Estate Lifesavers for those drifting toward foreclosure Seattle Times Newspaper

2007-04-04T09:03:00.000-07:00

How will Technology change the way people buy and sell houses? Will this affect real estate investors and how they can get a deal?

What will you say when you are negotiating with a seller and they bring out the value from Zillow? Are you confident enough and knowledgeable enough to respond to their assertions regarding value?

Did you know that most appraisers are very skeptical about the values that Zillow says the house is worth?

What's that house's story? Zillow users can ask - Yahoo! News

2007-03-30T08:14:00.000-07:00

How will this affect the market? Is this a good idea or just another government intrusion into the private sector?

Local News Measure requiring new-home warranties looks dead Seattle Times Newspaper

2007-03-26T11:26:00.000-07:00

More of the Sub-prime fiasco. This is going to get worse before it getts better.

Real Estate Subprime market sees possible domino effect in Colorado market Seattle Times Newspaper

2007-03-18T00:03:00.000-07:00

The 9 areas that are the most affordable to live in Seattle. The rise of the home prices and the slight increase of buying power. How they compete against each other and what makes us think that the prices of homes will continue to climb.

The Seattle Times: Business & technology: Home Values

2007-03-16T10:20:00.000-07:00

One of the reasons that as an investor you need to keep abreast of what is happening in your marketplace. How can you ethically take advantage of these opportunities?

ABC News: For Some, Foreclosure Wave Means Opportunity

2007-03-09T09:23:00.000-08:00

As an investor you need to read this article regarding foreclosures.

Net zeroes in on foreclosures: Real Estate: The Seattle Times

2007-03-07T10:09:00.000-08:00

I received an email from a great lady who attended one of my small group presentations. She asked a question that I get all the time:

------------------------------------------------

Paul, I wanted to thank you for offering the "Subject To" class earlier this week through Jensen-Swanberg. I really enjoyed it, and look forward to your presentation at REAPs the end of March.

I forgot to ask you to explain what your opinions were about direct mail postcards vs. letters. You track your results, so clearly you have some well-formed opinions. would love to hear them.

All the best,

Wendy C.
Seattle, WA

------------------------------------------------

Thanks Wendy,

That is a great question. Two points are key in what you ask. First the direct question about which works better for me. The Second the acknowledgment that I track my leads and response rates.

You can and should ask what works for others in your industry but most importantly is that you should try it for yourself. And even more important is to track the results for yourself.

Why you may ask? because my market my not be the exact same as yours. Even though I am a Real Estate Investor just as you are. I may be in a different target market both demographically as well as geographically. I can tell you that I mail different types of letters to people in Pre-Foreclosure than I do to people who are Owner Occupants. The letters I use in Bellevue are different than those I would use in Everett or Tacoma.

I know that the Yellow letter works very well in the working class neighborhoods. I also know that I have received better results using a more sophisticated approach in Bellevue, Kirkland and Mercer Island.

But to answer your question specifically about postcards. I prefer letters over postcards for the first couple of contacts. More copy in front of the prospect. You can get more information to them to spur the thought process of why selling to an investor may be right for them.

Also I believe as Dan Kennedy teaches that if you only send out one mailing to save your money and don't do anything at all. In other words a multi-step campaign is the way to go. Your responses will be greater and you will establish a relationship with your target market.

As I have mentioned in the past, I have purchased property from sellers who have kept my letter for over a year and then called me when they were ready. Do you think that someone would do that with a postcard or an ad in a newspaper? I don't believe they would.

I could go on and on about that but I won't. I will recommend that you read two of Dan Kennedy's books that you can find by clicking the links below and buying them at Amazon.com.

Ultimate Marketing Plan And the: Ultimate Sales Letter

I hope this will help you.

Dedicated to Multiplying your Successes!

2007-02-20T10:22:00.000-08:00

My Rant for Presidents Day:

As I am writing this blog entry I am sitting at 33,000 ft in seat 11B of an American Airlines MD80 flying back to Seattle after spending the last 5 days in Washington DC with Dan Kennedy and Bill Glazer in a seminar on Business Consulting and Coaching. I will post it in the morning.

As I was waiting for the plane to board while in on a layover in Dallas / Fort Worth Airport, I was visiting with a Ranger Sergeant First Class who was on the standby list waiting to get home to Fort Lewis. He was on a two week leave while serving in Baghdad with the Stryker Brigade. There were about a half a dozen soldiers, all on their way back home. I only visited with him for a few minutes because most military folks are private while dealing with civilians.

Having served in the Navy for a couple of hitches I know this and did not pry. I did though share with him that I had been stationed in Bremerton and appreciated his service and for the sacrifices that they were all making while being Over There. I remember what it was like coming home after being gone for the better part of a year and sitting in an airport waiting to get home to my loved ones.

Some people, here in the states, profess admiration and respect for military men and women in public and it is almost hip to say that they support the troops but not the war. Crap on that. You can’t vote in congress on Friday on a non-binding resolution and then go home over the holiday weekend and tell the loved ones of those serving that you support them and their serving members. We may be uneducated and poor like John Kerry said but we aren’t stupid.

There are many ways that people profess one thing and then demonstrate another. Take American Airlines as an example. There were a long line of standby passengers waiting to get on the flight. Including these military members and some deadheading flight crews going home I imagine or traveling to catch-up with their flight assignments. Of course they had first priority to get to Seattle. I did go up to the flight counter and ask the person behind the counter if the Military passengers would make it on the flight. I was told that they would not. I did specifically go ask them if I could relinquish my seat to the above mentioned Sergeant First Class. I was told that they could not do that because they could not trade one name for another.

I may be a little dense but isn’t that what they do when they when they ask for volunteers to get bumped? When I spoke with the gate agent I let her know that all I was looking for was to swap places with the soldier and be put on standby. I wasn’t asking for the pittance they give to be bumped, frankly I make more than that while I was waiting for the plane in Dallas. No, I was just trying to show my respect for the hard working soldiers while they are home from battle looking to spend some time with their family.

I remember when the war first started when there were a few returning soldiers receiving a standing ovation from passengers on a plane. After landing, the flight attendants asked the other passengers to remain seated while the soldiers get off the plane so they could have their homecoming in the baggage area. That airline was definitely not American Airlines, it was Alaska Air. That is one of the many reasons that I fly them whenever I can and stick with them when they have their publicized messes.

If I ran an airline, I would grant all military personnel returning from a war area, the same privileges that an elite frequent flyer receives. Those elite programs are designed to reward those travelers who have given the most to an airline measured by actual miles traveled. They get bumped to first class when there are seats and are put at the top of the standby list. Those are not terrible things to ask. Give those service members the same rights and privileges because they have given more to the airlines in terms of service to the country than even those of us who travel 50,000 or 75,000 mile every year.

I did want to say that as a business person and entrepreneur I understand the reasons for getting the airline flight crews back to their base but I believe that other passengers would have given up their seats and flown on the next flight to help get one of the service members home so they can spend more of their military leave with their family rather than in an airport half the country away.

The members of our armed services deserve better from all of us. Politicians, Airline Executives, flight crews, gate agents and yes us their fellow passengers. I was willing to be inconvenienced. I was not flying for pleasure and I can sure tell you I was ready to get home to my loved ones after being away for almost a week, but in my opinion, it was the least that American Airlines would let me do for those members who serve.

I just want to thank those of you who are serving, have served, or will serve. And especially to the wives and children who take the brunt of it while we are away. You have my undying gratitude and admiration. Sincerely.

2007-02-11T10:59:00.000-08:00

Is it always the best for you to use the contractors preferred lender when buying new construction? I thought that this was a very insightful article.

Buyer should beware of builder-lender ties: Real Estate: The Seattle Times

2007-02-01T07:42:00.000-08:00

There has been more growth in the values of homes in Seattle. It has been making it difficult for people to find a house close to the city to buy and affordability live.

What does that mean to investors? What are the opportunities to us out there. I see several right off the top of my head. Whey don't you take a shot at answering them though. Show off how smart you are.

The Seattle Times: Local News: Fewer can afford to buy a house in King County, report says

2007-01-24T15:10:00.000-08:00

Most areas of the country are not as lucky as we are.

City's home prices to keep soaring

2006-11-21T15:56:00.000-08:00

Real Estate investing as an occupation has been fantastic for me. I know that I could never afford to do the things that I do when I was working my full time job. I had people always telling me what to do and where to go. I had meetings all day with little or no productive time.

I am so glad that I have invested in my education, learned what works here in Seattle and the region and then taken action and implemented a strategy.

Real Wealth for Living Well... Building your Real Estate Investing Lifestyle.

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They Missed It!

The Secret That I Found Was In The Coaching And Mentoring

Understand The Mentoring Relationship

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I Guess I Hit A Nerve With My Article!

I received more emails from members than I have ever received before. All in regard to listening to advice from someone with a vested interest in how you invest.

You Gotta Love Creative Real Estate Investing!

The ability to control a property without going to the bank or having big money tied up is great.

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It is becoming more and more obvious too me that people are spending too much on the lack of education.

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Treasury near subprime aid deal - Yahoo! News

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A little background…

“Subject To” Solutions…

The punch line is…

Sub-Prime meltdown and the "Subject To" solution.

Sub-Prime Meltdown and the Subject To Solution

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They were upset and ready to kill Columbus to go home.

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Congress calls for "mortgage czar" - Yahoo! News

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Business & Technology | Local home sales cool off; why are prices still hot? | Seattle Times Newspaper

Real Estate | Automated appraisal no real substitute for one done in person | Seattle Times Newspaper

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Know Your Exit Strategy
Before You Buy That House!

Sub-Prime Meltdown and the
“Subject To” Solution – part 2