rei voice magazine june 2011
DESCRIPTION
Sound Opinion--Wise Decisions: Voice of the Profitable Real Estate Investor.TRANSCRIPT
June 2011 REI VOICE �
SHOPPING FOR A DEAL
LEVERAGING DISTRESSED ASSETS • TURNING FORECLOSURES INTO OPPORTUNITIES • 5 TIPS FOR FINDING DEALS
www.reivoice.com June 2011
SHOPPING FOR A DEAL
� REI VOICE June 2011
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ANALySIS
6In Intimate Detail: Phoenix, AZREI Voice publisher Geraldine Barry interviews Alan Langston about the Phoenix market. As director of Arizona Real Estate Investors Association, AZREIA, and president of the Phoenix Real Estate Club, Langston is an expert on the territory.
8Bank REO Inventory Rises to Record HighsRobert Campbell, market timing expert, projects a whopping 45 to 50% peak-to-trough total decline in real estate values before the correction is over—and he has the numbers to back up his projection.
10Playing Foreclosure RouletteThe banks’ extend-and-pretend practices create havoc with auction investors at the courthouse steps. It’s impossible to tell which properties are going to sale and which will be postponed to a later date. Michelle Lenahan, Director of Customer Service & Training for ForeclosureRadar.com provides perspective on the banks’ frustrating tactics.
ADVICE
12Bumpy Ride for Distressed Property BuyersExperienced investor Tom Wilson has purchased and turned over �00 properties into money makers. He discusses whether distressed properties a smart investment for novices.
BASICS
16Property Management: A Time-Saving InvestmentAre you penny-wise and time foolish? Investor and portfolio manager Chris Clothier makes the case for property management as a key component of any real estate investment strategy.
20Ignore City Hall at Your PerilReal estate attorney, Jeffrey Hare, explains how code violations can stop a project cold, or worse. His advice? Don’t ignore the obvious.
TRENDS
22Leveraging Distressed Assets to Your AdvantageYes, you can purchase multiple properties for as little as $�5,000. REO Queen, Lori Greymont, presents five principles for converting empty properties into cash-producers.
24Short Take on Short SalesNatalie Knowlton, short sale expert and third-party negotiator with over �00 approval letters negotiated, explains how short sales benefit both investors and underwater owners.
FEATURES
26Facebook for SmartiesSocial media expert and Vice President of The Norris Group, Aaron Norris, over-delivers on his promised tips for Facebook engagement. His great advice will bring you new clients.
30 Ger’s Top 5
INVESTOR RESOURCES
29 The best of the best. Phone/email/web contacts.
TABLE OF CONTENTSSOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR
4 REI VOICE June 2011
In 2008, Nicholas Carr ad-vanced the term, “the Google effect” to explain how the inter-net is changing our reading and thinking habits. In Silicon Valley, we are experiencing a different Google effect, the rebounding of high-tech companies such as Microsoft, eBay, Apple, and Facebook–all companies that are expanding and thriving in our lo-cal market. These businesses are driving employment and occu-pancy rates higher, which in turn is driving rents upwards. Accord-ing to Michael Pierce, President of Prodesse Properties, “Studios in Mountain View have gone up $300 per month in the last year.” These are properties Michael manages.
As a smart property manager and investor, it’s not surpris-ing that Michael is realizing an increase in rent; however, his micro-market is Mountain View—well within the Google-effect sun shadow. Travel just five miles to the micro-market of East Palo Alto and you’ll find the Google-effect absent and a real estate market that has yet to bottom out.
As you consider your real es-tate investment options, remem-ber the saying “Think Globally, Act Locally,” then forget the global part. In real estate investing “Re-search Locally, Act Locally” in whatever micro-market grabs your interest.
PUBLISHER’S NOTE
WELCOMEWelcome to another issue of REI Voice. In this issue, we focus on distressed properties. They provide both a challenge and an opportunity to those involved in real estate. While we often speak of the real estate market, please remember that all real estate is local. There isn’t one real estate market, but many—it is like the weather with multiple micro-climates. The real estate micro-markets act somewhat independently, with some going up while others continue to decline in value.
GERALDINE BARRY
Publisher
President of SJREI Association
REI Voice™ MagazineA publication of SJREI Association™
PublisherGeraldine Barry | 408-264-3198
editor-in-ChiefSusan Hare | 408-391-8068
Advertising sAlesMeghan Koslowski | 408-264-3198
Art direCtorKevin Bell
direCtor, AdministrAtionMeghan Koslowski | 408-264-3198
PrinterWestern Web
Western-Web.net
SJREI Association is a member of NREIA®
REI Voice™ is a publication of SJREI Association™ www.SJREI.org
Reproduction or use of any editorial or graphic is prohibited. To request reprints or reprint rights, contact [email protected].
REI Voice Magazinec/o SJREI AssociationP.O. Box 90542, San Jose, CA 95109-3542www.REIVoice.com
Copyright © 2011 SJREI Association. All rights reserved.
June 2011 REI VOICE 5
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My colleague, Alan Langston, is the founder and executive director of the Arizona Real Estate Investors Asso-ciation (AZREIA), the American Rental Property Owners and Landlords As-sociation (ARPOLA), and president of the Phoenix Real Estate Club. Organi-zations under his leadership serve over 3,000 real estate investors. As president of the Phoenix Real Estate Club, Alan conducts highly interactive network-ing meetings to keep real estate inves-tors up to date on market conditions. When I wanted details about the Phoenix market, Alan was my first call. Please enjoy our interview.
Q: What are the economic
drivers in Arizona?
Housing, tourism, health care, biomed and high tech drives Arizona. Arizona currently outpaces the rest of the country in job growth in both the health care and hospitality sectors.
Q: Describe the real estate market
today in Arizona, then more spe-
cifically in the Phoenix market?
The market is dominated by dis-
tressed proper-ties. While our volume is as high as it was in the boom years, well over 50% of the sales are distressed prop-erties. The Phoe-nix market is more impacted (at 65%) than the other major
metro areas. As of the end of April in Greater Phoenix, 45% percent of the sales were REO and another 20% were short sales. The Greater Phoe-nix market hit another price bot-tom this February. Prior to February 2011, the initial price low had been in March 2009. I expect prices to rise, but very slowly. In general, the Ari-zona real estate investing market has never been better with low prices and strong demand for rental property. With traditional sales representing 35% of the market, we still have a market that supports owner to owner sales and rehabs.
ANALySIS
An interview with Alan Langston by Geraldine Barry
ALAN
LANGSTON
480-990-709�
AZREIA.ORG
ARPOLA.ORG
IN INTImATE DETAIL:PHEONIX, AZ
� REI VOICE June 2011
Q: What are investors doing to par-
ticipate in the market? As president
of the local real estate investors asso-
ciation I know you have your hand
on the pulse of what is happening.
Traditionally, when investing in Arizona and specifically in Phoenix, in-vestors relied on appreciation and not cash flow for buy and holds. That has completely changed. In this market in-vestors are realizing tremendous cash flow and what most believe will be ex-ceptional future appreciation. The fix & flip market is also viable, but not as strong as 12 to 18 months ago.
Q: If one buys for cash flow - when
do you anticipate appreciation hap-
pening in your market again?
Tough question. Most savvy inves-tors are building in some apprecia-tion when they buy in this market. Our prices are low and investors are buying well below the median pricing. If your question is more general, then market wide appreciation will happen once we work through the distress inventory. Our prices right now are so far below the cost to build that many of us believe the pric-es will recover to the replacement cost rather quickly as we near absorption of the distressed properties.
Q: How are rental rates? Are
they going up or down?
Throughout the entire drop in the real estate market rental rates have continued to go up with short periods of being flat. Rates are currently going up and demand for single family rent-als remains high.
Q: What about occupancy
rates in Phoenix?
In single family homes, the rate is 4% or less for anyone that knows what they are doing. Most of our members can turn a vacancy in just a couple of weeks. Marketing your rentals is rela-
tively easy. There is no need for con-cessions. On the multi-family side the vacancy is around 10 – 12%. Conces-sions are waning and are only needed in some areas of Greater Phoenix.
Q: Do you think that market
has hit bottom?
Depends on how you define the bottom. I do believe it has hit bottom from a price perspective. Also, our foreclosures have been declining hav-ing hit their peak back in December of 2009. Demand is strong right now and inventory levels are very low, which will continue to put upward pressure on price. Some price sectors have been rising for a few months.
Q: What is your long-term prog-
nosis for the market? Do you
see it declining further?
Most economists believe the Great-er Phoenix real estate market will re-cover in the next three to five years. As an investor, I’m not sure it matters except that you have to know your exit strategies from the start. In this market you need to be prepared to hold the property for a few years if you want to see appreciation. If you are fix and flip-ping, you need to plan on longer hold times. Can our market decline further? Anything can happen, but currently our market is getting better.
Q: What are the opportunities avail-
able to out-of-state investors?
Plenty. We have investors in our market from all over the world as it is easy to see the value in the Greater Phoenix market. Here is some infor-mation from May’s Maricopa County (Phoenix) Housing Opinion written by Tom Ruff from an analysis of af-fidavits.• There were 8,751 home sales
• 2,718 home buyers or 31%
were from out of state
• The median price home
(new and resale) for an out-of-
state buyer was $124,500
• 60% of out-of-state buy-
ers purchased with cash
• 69% of out-of-state buyers plan to
live in the homes they purchased
• In April 2005, Californians bought
2,153 homes; Canadians, 38
• In April 2011, Californians bought
453 homes; Canadians, 540
• The top-ten list by state and the number
of buyers: CA, 453; WA, 194; CO, 124; MN,
95; NY, 86; OR, 72; TX, 66; IA, 61; WI, 59
• Maricopa had a least one buyer from all
50 states with the exception of MS and VT
• The median price for inves-
tors was $71,250…. 24% of all
sales... 69% paying cash
Q: What do out-of-state inves-
tors need to be wary of entering
your market place? A lot of them
were burned when the market
crashed in �00�, and they got
side-swiped when properties lost
50% of their previous value?
A lot of in-state investors lost mon-ey in the market crash as well. Out-of-state investors need to be wary of the same things in-sate investors need to be wary of. Let’s take Greater Phoenix. There are 30 separate submarkets in Greater Phoenix. An investor needs to understand the specifics about the area they are investing in as they are all dif-ferent. They need to analyze the market based on their investment strategy. Is the investment property right for rental or fix and flip or neither? How many rent-als are you competing against? What improvements need to be made to the property as a rental or to resell? Mistakes can be made in any market including Arizona and the Phoenix area. Investors need to stick to the fundamentals.
Q: What three things would
you recommend that investors
keep in mind as they explore
the Arizona market place?
Know the submarket you are in-vesting in. Drill down even further to understand the neighborhood. Invest based on the current return and not future appreciation. Make informed investment decisions.
Q: As an investor yourself,
what are you investing in?
What is your strategy?
I invest in commercial office, some residential and a little land. I hold for the long term and employ very conser-vative investment strategies.
Q: What are your criteria for
investing in a given market?
I look for distressed commercial property with under market rents where the property can be reasonably rehabbed and the rents raised to re-flect the market. I also look for build-ings that can serve a niche tenant as I find it makes the marketing easier and the turnover less.
Q: What resources to you use to
research the market place?
We are fortunate in Arizona, and especially Phoenix, that there are many tools available to help un-derstand the market. These include the Cromford Report, Information Market, NetValueCentral and a few of the very sophisticated wholesal-ers. Many investors use the Mar-ket Update that AZREIA publishes monthly. Also, nearly every national data source has information on our markets. One of the best ways to gather information continues to be to attend AZREIA and Phoe-nix Real Estate club meetings and subgroups. There is nothing that compares to talking with and shar-ing information with other investors in your market.
IN INTImATE DETAIL:PHEONIX, AZ
June 2011 REI VOICE 7
8 REI VOICE June 2011
inventory of 2.2 million homes, we find they outnumber March foreclosure sales by a factor of over 45 to 1.
Other highlights of the LPS
March report include:
• Loan delinquencies have
declined and foreclosures have
increased across all mortgage
product lines.
• Almost ��% of all loans in
foreclosure have not made a pay-
ment in over two years. This is
a record high – and up from ��%
from a year ago, March �0�0.
• There is almost three times
the number of foreclosure starts
vs. foreclosure sales.
The data from LPS all points to the simple fact that the fore-closure pipeline is bloated with over overhang (also referred to as “shadow inventory” by many) with problem loans that will ulti-mately get thrown on the market
as bank-owned REO sales. How bloated? As reported in the No-vember 2010 issue of the Camp-bell Real Estate Timing Letter, there would likely be at total of 7 million distressed properties hit-ting the re-sale market as either REOs or short-sales in the not-so-distant future. This is what the data from LPS is showing as well.
Be aware that the falling U.S. housing market we are now wit-nessing is caught in a self-rein-forcing, negative feedback loop, whereby falling prices bring more distressed supply to the market-place because more and more homeowners with mortgages are now underwater – which in turn causes them to “walk away” in greater and greater numbers. Also, a growing number of hom-eowners that are not upside down on their properties – and thus do have equity – will likely decide to put their homes up for sale to try to preserve their capital before it
shrinks even more. On the other side of the vicious
cycle coin, while supply tends to increase during a housing mar-ket downturn, demand tends to decrease. And the reason is fairly simple: Why should I buy a house today when prices are likely to be cheaper tomorrow?
Bottom line: The rising trend in foreclosures and bank-owned REO inventories – which are the mortal enemies of housing prices – means that today’s national home price indexes as measured by both Case-Shiller and Clear Capital have nowhere to go but down. Reversion to the mean cal-culations suggest another 15 to 20% fall in prices from current lev-els, which would result in a 45 to 50% peak-to-trough total decline before the correction is over.
For information on The Campbell
Real Estate Timing Letter, visit
RealEstateTiming.com
An Extract from the May 15, 2011 Campbell Real Estate Timing Letter
The March Mortgage Monitor released by Lender Process Ser-vices (LPS) shows that bank REO inventory stood at 2.2 million homes at the end of March – an all-time high – while foreclosure starts increased by 33% since the end of February.
As shown in the chart: loan de-linquencies continued to decline in March, dropping by more than 11% month-over-month – falling to the lowest level since 2008 – as more delinquent loans were either cured or moved into foreclosure. It is important to note the impact of seasonality – namely that the first quarter of almost every year shows a drop in new delinquencies – and his-torically March is consistently the month of the largest first quarter declines.
Also know that while loan de-linquencies are falling, be aware that they are still highly elevated – and are about 1.8 times the 1995-2005 average. Foreclosure inventories, however, are not only even more elevated – but they are rising and not falling – and cur-rently sit at a level that is an in-credible 8 times historical norms.
LPS reports there are cur-rently 2.0 million loans that are more than 90 days late, which – as shown in the chart, “cure rate for delinquent loans” (Nov 2010 Campbell Real Estate Tim-ing Letter) have almost a 100% probability of ultimately becom-ing a bank-owned REO. If we add these 2.0 million homes that are 90+ days late to the current REO
ANALySIS
THE NEW REAL ESTATE PARADIGM
Robert
Campbell has
had a multifac-
eted �0-year
real estate
career as a real
estate investor,
developer, bro-
ker, and market
timing expert.
The son of
a San Diego
homebuilder,
he spent many
hours as a
youngster tag-
ging along with
his dad and
later worked on
his father’s con-
struction sites.
Mr. Campbell
quickly learned
that there was
far more to real
estate than
dirt, concrete,
lumber and
building materi-
als. He learned
that real estate
markets are a
lot like roller-
coaster rides,
where spectac-
ular climbs are
frequently fol-
lowed by spec-
tacular falls.
June 2011 REI VOICE 9
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ADVICE
Playing Foreclosure
Roulette
Playing Foreclosure
Roulette�0 REI VOICE June 2011
By Michelle Lenahan
Round and round she goes where she stops nobody knows! This is really what it feels like to be an auction investor right now at the courthouse steps. You never can tell which properties are going to sale and which will be postponed to a later date. We are in unprecedented times in terms of the number of postponements and delays in the foreclosure pro-cess. Knowing which homes are actually going to sale is anyone’s guess.
Sean O’Toole, the founder of ForeclosureRadar wrote, the initial Foreclosure Roulette blog (http://www.foreclosuretruth.com/blog/sean/foreclosure-rou-lette/) almost a year ago, talking about the banks’ extend-and-pretend practices and why there will continue to be delays in the foreclosure process. Some ex-perts will tell you that the banks are trying to control the inventory of REO properties to somehow protect the market. The reality is that lenders are trying to manage their way out of this mess, which means slowly modifying, short
selling and foreclosing on the de-linquent inventory. This insures that it will take years to finally dig out from under the negative eq-uity that plagues the nation.
As of March of 2011, in Califor-nia it now takes on average 302 days to foreclose. This is a process that should take approximately 111 days. These delays can be sub-stantially longer depending on the lender, as you can see in the Short Sale Report at ForeclosureRadar.com. One lender in particular is taking over 767 days to foreclose. In fact, this lender now has active trustee sale dates on over 2,600 properties in California that had an original Notice of Default filed in 2008. This represents over $917 million in loan origination that has ballooned into the published bids of close to $1.2 billion.
Those of you who have been paying your house payment or rent each month may have mixed feelings when you calculate that these folks have not made a pay-ment in over 3 years. The ques-tion remains, are the owners really benefitting from these delays? If you consider that FHA will lend again to homeowners just 3 years
after a foreclosure, these delays have really placed these folks in a perpetual state of foreclosure. They are not recovering and re-starting their lives, they are simply holding on until the bank decides when they can finally close this chapter and move on. The only proactive action a homeowner can take is to try to modify their loan or short sell their property. When you look at it from that perspective, you can see that this practice may have done more damage to people over the long term than anyone can really cal-culate.
What this means to investors is that there is a huge opportu-nity today and for years to come. Based on these delays, it is im-portant to keep your peripheral vision sharp when looking for the best opportunities. The very best investment may be a short sale, could be an REO purchase, or may be found at a trustee sale. The key is to understand the game you’re in and be prepared to step up and play when the time is right.
Contact Michelle Lanahan at
Playing Foreclosure
Roulette
Michelle Lenahan is
Director of Customer
Service & Training for
ForeclosureRadar.
com. Ms. Lenahan
began her career as
property manager for
a large real estate firm
in San Francisco, and
then transitioned into
escrow, wholesale
lending, and the title
industry before joining
ForeclosureRadar.com.
With a passion to under-
stand and explain real
estate related issues
to others, her role is to
teach agents, investors
and homeowners to
understand the foreclo-
sure market and to cre-
ate the best opportuni-
ties for themselves.
Playing Foreclosure
RouletteJune 2011 REI VOICE ��
ADVICE
By Tom Wilson
So, you want to jump on the distressed property bandwagon? Well, hang on; it can be a bumpy ride. I’ve purchased over 260 of these properties. The first three or so were the real estate equivalent of elementary school--skinned knees, huge learning curve, lots of unexpected bills. The next dozen properties were like high school and college: still a lot of learning, but definite progress and profit potential. Ask anyone who has done a lot of deals. You don’t really hit the grad-school equivalent of real estate investing until prop-erty number 20. Even then you’ll still learn something new every day, but you’ll have the experience and resources to see you through.
When individuals who haven’t completed an elementary education in real estate investing want to begin with something as challenging as a distressed property, I’m tempted to shout, “Put your money under your mattress!” There are a lot less risky ways to invest in real estate. What are the signs that an individual is on the road to probable disappointment or disaster? He or she says one of the fol-lowing:
“Foreclosures must be easy to find.
I read about them every day in the pa-
per and everyone seems to be buying
them.”
Everyone seems to want to pur-chase foreclosures, but very few are successful. Good quality properties at a sufficient discount are in short sup-ply relative to the demand. Oh, there are plenty more coming down the pike from the shadow inventory, but the banks are releasing them at a very low rate to avoid damage to their balance sheets.
My company purchases about 6 properties per month, however, good value ones are so difficult to find that we average 48 offers for every one that we have won over the past two years. And that win rate is with a full time staff. There is simply no free lunch; finding high value quality properties is real work. Most buy-ers over pay because they don’t fully calculate the true costs of getting the property renovated and rented.
“I think it is safe to buy; the market
must have hit bottom by now.”
In fact, the double dip is already here and property values in the ma-jority of U.S. cities are projected to go down farther before they hit bottom. Realty Trac reports that we currently
have $1.5 trillion and 41 months of ex-isting inventory to work through, not even considering the shadow inven-tory. It will be difficult for the market to recover before we clear out the toxic loans.
Most respected economists project that it will take 3-7 years in most re-gions before the backlog of foreclo-sures is off the books and the market turns around. Moody’s Economy projects that it will be 2033 before California returns to its prior peak. It is critical to buy in a region and neigh-borhood that is at low risk of further declines. One gauge is to find out how much negative equity there is in a par-ticular neighborhood and how much it has declined so far. The more it has declined from the peak, and the more negative equity there is, the more likely it is going down farther.
“The only cost after purchase should
be just a little paint and carpet.”
I wish I knew how many times I have heard this from a new buyer or an agent. In fact our company spends on the average an additional 17% of purchase price before a property is leased or ready to sell. And these are properties that need just cosmetic at-tention! Some of the typical costs that are in addition to the initial rehab es-
BuMPY RIDE FOR DISTRESSED PROPERTY BuYERS
Tom Wilson has
been investing
in real estate
since the 70’s.
He first invested
as a part-time
activity, and
then after
thirty years with
some of Silicon
Valley’s pio-
neering tech-
nology compa-
nies, Mr. Wilson
put his business
and manage-
ment experi-
ence toward
fulltime real
estate invest-
ing. Wilson
Investment
Properties
offers high-
cash flow, fully-
leased invest-
ment proper-
ties.
�� REI VOICE June 2011
BuMPY RIDE FOR DISTRESSED PROPERTY BuYERS
June 2011 REI VOICE ��
timate are: closing costs, debt service, taxes, insurance, advertising, lease up fee, property management fee, utili-ties and additional surprise real rehab costs, just to name a few. What one thinks is a nice rent ratio at purchase turns out to be something consider-able less by the time the first rent check is deposited.
“How hard can it be? I think I’ll do it
myself.”
I won’t say turning a distressed property into a profit maker is rocket science, but there are many moving parts, and the cost of mistakes and delays is high. I highly recommend getting an experienced partner or pur-chasing from a reputable source with a lot of experience. Don’t reinvent the wheel; your elementary education will be too expensive. Wait until you’re a graduate-level investor to purchase and turn distressed properties on your own. All indicators are that distressed properties are here to stay for quite a while--you have time to learn without breaking your bank.
I enjoy assisting new investors and welcome your questions.
Contact Tom Wilson at
408-8�7-�8�7
�4 REI VOICE June 2011
2011 Real Estate
SF Bay Expo
Thank Youto All of OurExhibitors &
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Attendees gathered information, listened to marvelous speakers, shopped, and networked.
And you made it possible!
We hope you join us again in 2012.
SFBayExpo.com
June 2011 REI VOICE �5
JUNE:
»» �/� & �/�
Update on the CA Market with statistician and economist
Mr. Robert Campbell
»» �/��
Mid-Peninsula Meeting
JULy:
»» 7/� & 7/7
East & South Bay meetings - Bruce Norris
»» 7/�9
Mid-Peninsula Meeting -
AUGUST:
»» 8/� & 8/4
East & South Bay meetings -
»» 8/��
Mid-Peninsula Meeting - CSR – Commercial Investing Update
SEPTEmBER
»» 9/7 & 9/8
East & South Bay Meetings – Sean O’Toole of Foreclosure Radar
»» 9/�0
Mid-Peninsula Meeting -
SAVE THE DATE!!
I Survived Real Estate �0�� October �4 - Nixon Library, Yorba Linda, CA
CALENDARREGISTER ONLINE AT WWW.SJREI.ORG
SOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR
MARK YOUR CALENDAR NOW & REGISTER ONLINE AT WWW.SJREI.ORG
SETTLING DEBT WITH DIGNITYLearn the Benefi ts of Short SalesA Free Service for Homeowners
Do you know a homeowner who needs help? Are you an agent or loan offi cer who would like to receive a referral by partnering with me? Short Sales demand a certain level of expertise and tenacity. I’ve procured $11,000,000 of “forgiven” debt for homeowners—that’s an 87% success rate. Call me for a free and confi dential telephone consultation. For free weekly industry updates, subscribe to my blog: www.NatKnowsShortSales.com.Together we can help families take back control of their lives with dignity.
Disclaimer: We are not associated with the federal government • Our services have not been approved by the government or the lender • The lender might not agree to change the loan • A person can lose the house and damage their credit if they stop paying the mortgage • Seller has the right to reject the banks offer without any charge from us • fees can only be charged at the close of escrow. Anyone who offers you assistance is required by law to disclose the above information. Realtor Associate of USA Realty & Loans. DRE 01885366
NICK OF TIME SHORT SALES
NATALIE KNOWLTONDirector of Short Sales
[email protected] www.NickofTimeShortSales.com
I’ve personally negotiatedover 200 short sale approval letters!
BASICS
�� REI VOICE June 2011
by Chris Clothier
When I first began investing in real estate, I was counseled over and over again from other investors about man-aging my own property. They touted the benefits of saving the management fees and earning the tax write-offs, as well as being firmly in control of who was oc-cupying my property. It all sounded so great and their words seemed to be filled with years of wisdom. Yet, they were trading their most precious commod-ity—time—for a few dollars.
I see this same penny-wise, time-foolish mentality today with people who purchase REOs, foreclosures, and short-sales. It’s better than OK to look for property deals. The majority of money is made by buying right and people with the talent to find deals are spending their time wisely –when finding deals. When they spend their unique talent managing properties, how are they building wealth?
However you come to the decision that real estate is your wealth building strategy, do not waste time fretting over whether or not to manage your prop-erties yourself. Are you interested in building wealth or developing a second job? Time is your most precious asset and it can be used to improve every as-pect of your life or it can be used to fix
toilets and collect rent. I prefer to leave property management to the experts and spend my working time using my expertise--finding and evaluating in-vestments--and spend my spare playing with my family.
Besides putting your time to better use, consider the other benefits of us-ing a professional property manage-ment company. High-quality property management companies have systems and processes specifically designed to create efficient work flow. From occu-pancy to management to legal issues, the company will have the processes in place to handle your properties. Those efficiencies are what lead to increased revenue for an investor, less strain on the investor’s time, and a reduction in costs incurred by the investor just to name a few.
Revenue can actually be increased, even after management fees, by reduc-ing the number of days a property sits on the market waiting to be occupied. A quality management company will already have applicants ready to rent properties and a process to begin mar-keting a property immediately. By in-creasing the number of days a property stays rented, the company is increasing your revenue.
Finally, your costs can be greatly reduced by using a management com-
pany. Simply in terms of having policies in place and a procedure for tenants to report issues or make requests, a man-agement company can quickly answer and decipher which calls are important and necessary and which are issues to be handled by the tenant. As property owners doing our own management, the tendency is to keep the tenant happy because we fear having to repeat the rental process, therefore we often spend money on unnecessary expenses.
There are many landlords who ad-vise keeping overhead small in order to save a dime. In other words, spend as little of your hard-earned rent as possible and do as much work as pos-sible. In my book, building a portfolio of investment properties is a logical way to build wealth and provide for my family. But property management? I have more profitable things to do. Before managing your own portfolio, consider the value of your time and use your time where it will give you the best return: it is not in managing your properties, it is in finding the best prop-erty management company you can and then doing what you do best. The gains you make will be huge!
Contact Chris Clothier at
877-77�-9998
PROPERTY MANAGEMENT: A TIME-SAVING INVESTMENT
Chris Clothier is a self-
made entrepreneur
who has worked with
other members of
the Clothier family to
build MemphisInvest.
com, the largest real
estate investment
firm in the Mid-South
and the largest, pri-
vate property seller
in West Tennessee.
Along with his family,
Chris is passionate
about assisting real
estate investors and
real estate invest-
ment companies and
actively supports
others in their goal of
building long-term
sustainable wealth
through real estate.
June 2011 REI VOICE �7
�8 REI VOICE June 2011
BE A PART OF SOMETHING AMAZING!BECOME A MEMBER TODAY
(408) 264-3198 or www.SJREI.org
W hether you have yet to purchase your fi rst investment property,
or are working on your hun-dredth deal, you’ve found the bay area’s source for sound, principled advice and network-ing. As investors ourselves, we understand the challenges that investors face, and customize our programs to address real-life situations and scenarios.
MEMBER BENEFITSHear the best speakers, get the best adviceOur educational meetings are delivered by recognized experts in their fi eld. They keep you up to date on issues such as market timing, new legislation, and techniques that may affect or enhance your real estate investing.
NETWORK WITH INVESTORS, BUYERS, SELLERS, AND THE PEOPLE WHO SUPPORT THEMAll successful people rely on a network. Bringing like-minded people together to share information, assistance, and resources is a core goal of our chapter meetings.
STAY MOTIVATED, AVOID PITFALLSWho but another investor understands the doubts, challenges, and successes of real estate investing? SJREI Association fosters a positive climate of mutual support and sound advice. Your questions are respected, your participation is valued.
THREE CHAPTERS• South Bay• East Bay• Mid-PeninsulaMembership entitles you to free admission to your local chapter’s monthly educational and networking programs and much, much more.
THE BAY AREA’S MOST DYNAMIC INVESTORS ASSOCIATION
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Annual Membership Dues $500 $225
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Network with other investors at each event
Free registration & attendance at all chapter meetings: Mid-Peninsula, San Jose, East Bay
Invitation to annual Leadership roundtable
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Personalized name badge with ex-pedited event check-in
On-line community: member profi le, read and post messages on message boards
Hundreds in discounts for goods and services through National REIA affi liation
Discounts on workshops and special events
Invitation to Quarterly Insider Luncheon
Audio library of past events
New member orientation
June 2011 REI VOICE �9
Going Beyond Real Estateyour number #1 source for all your real estate needs
For more information on the showcall 408-892-3376
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Jeffrey B. Hare, Attorney at
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�0 REI VOICE June 2011
IGNORE CITY HALL
AT YOUR PERIL
TRENDS
If you have a deal, we’ll turn it into dollarsStop chasing money. It costs a bundle and a couple of ulcers to flip a house. We have the systems, know-how, and financing to flip and sell just about any commercial or residential property. Let us do the heaving lifting. Bring us your deals and walk away with cash or a piece of the action. Confidentiality guaranteed. Whether you have a line on a property right now, or will in the future, give us a call. Mention this ad for an extra $500 on the first deal we do together.
800-518-0215 www.AscentPS.net
SOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR
June 2011 REI VOICE ��
By Jeffrey Hare
A compliance order from the lo-cal Code Enforcement department at City Hall can be very unwelcome news for the investor looking to quickly flip a distressed property. Typical notices include building or zoning code violations; notice of substandard housing conditions, and other public health and safety requirements. The results can be frustrating and expensive, but they don’t have to be. With a little extra effort and sound advice, you can ef-fectively manage this situation.
Unlike purchasing a home, where the buyer is provided a multitude of disclosure forms and has both the time and opportunity to con-duct thorough inspections of the property and the neighborhood, investors often purchase property sold on an “as-is” basis, with limited ability to conduct such inspections. In some instances, the buyer will have little or no recourse against the seller. Many distressed properties are already the subject of local Code
Enforcement action, just waiting for the new owner to show up. In some cases, the cost of repairs may be the tip of the iceberg: there could be much more severe consequences, including civil penalties and even jail time.
One client purchased what they thought was a duplex in a quiet resi-dential neighborhood, only to find out the propert was zoned for single family use. In addition, the prop-erty was located within a Historic Zoning District, and all modifica-tions had to conform to the City’s historic preservation guidelines. The property could not be occupied – or rented – until it was in full com-pliance. The delay took over two years. Another client discovered the hard way that substandard housing conditions could lead to condemna-tion and immediate displacement of all of the tenants. It is illegal to collect rent for substandard hous-ing, and tenants often discover how to report violations to avoid paying rent. Failure to comply with Code Enforcement orders can result in
civil penalties amounting to thou-sands of dollars, enforced by liens recorded against the property. In extreme cases, the property owner can be sentenced to jail.
Another client discovered that the cute “guest cottage” on a prop-erty they had purchased had actu-ally been a garage illegally converted without permits. Illegal conver-sions, additions and other modifica-tions to the property, often without proper permits, are a common but expensive problems for investors. Moreover, the renovations must be done in accordance with current codes, with permits, and by licensed contractors.
What can you do? First, look be-fore you leap, and budget accord-ingly. Hire a competent inspector who can give you a realistic esti-mate of required repairs – including cost of permits – before you write the check. Find out whether local zoning and building regulations will allow you to use the property as you intend. Some cities provide databases of pending code violation
actions online, and you can always phone the city to inquire before you buy.
Second, if you get a letter from Code Enforcement, respond. Ig-noring the issue will not make it disappear. The ultimate objective is compliance; the best use of time is find creative solutions. Work with the inspectors and city staff – don’t yell at them. Cooperation will yield valuable results in most cases. A lawyer who understands local gov-ernment regulations can provide valuable assistance.
Fighting city hall can be both ex-pensive and futile when it comes to health and safety regulations. After several delays, one property owner begged a Judge for a 30-day exten-sion to comply with the Code En-forcement order. The Judge granted the extension, but told the owner to bring his toothbrush if he came back to Court. The owner complied.
Contact Jeffrey Hare at
408-�79-�555
TRENDS
�� REI VOICE June 2011
By Lori Greymont
There’s a house on Vine Street in Atlanta. The homeowners de-faulted and the bank foreclosed. Then the property was listed at 80% of its value by an agent specializing in REOs. The three-bedroom, one-bath house in a de-cent working class neighborhood didn’t sell. So the agent dropped the price. And dropped it again. Why wouldn’t the house sell? It was in good, not great, condition. The house didn’t sell because no one in the neighborhood could get a loan. Finally, the asset man-ager had to get the distressed property off the books. He slashed the asking price to $10,000 and listed it with other similarly priced houses, and then sent the bargain list to investors.
Distressed assets can be huge money makers for savvy inves-tors—as long as they follow the five principles for converting empty properties into cash-pro-ducers.
1. Concentrate Efforts. Decide in advance which areas of the country you’d like to invest in. You’ll find the best bargains in the mid-west and southeast. Focus on a few cities and learn as much as you can about them. Other inves-tors are a great help with this in-vestigation. Also read local blogs. What are properties renting for? What is the inventory?
2. Do Due Diligence. Once you have focused on a few areas, start perusing lists of distressed assets. You’ll want the newest house you can find AND with the least liens. Make sure you adjust the offer price to be in line with the neighborhood’s other distressed homes. All distressed
properties have liens, usually tax liens, but sometimes water or sewer liens. Factor those into your purchase price. Most on-line real estate sites can’t help much with understanding prop-erty condition. There is no substi-tute for feet on the ground, which leads us to….
3. Build a Team. Because you’ve concentrated your efforts, it’s a lot easier to find someone willing to drive by a property and peek in the windows. This banking meltdown has allowed the creation of many support businesses for the banks to look at, price and manage their own distressed assets. You can search the internet for “Distressed Asset Management”, “BPO’s”, “Drive-By Services” or a host of other
words and pull resources that are your feet and eyes on the ground. Plug into the existing network of professionals and within a day or less you will know if you found a gem or not. And when you work with someone you like, call them back for repeat business. Rela-tionships are also key.
4. Sell Quickly. There are more properties on the market than anyone can buy so how do you sell your property ahead of the neighbor? Finance your buyer. There are many creative financ-ing methods that you can em-ploy that offer you control and a great return. If your buyer can be approved by you, they can make a decision in days and be in the home in less than a week or two. This helps preserve your
asset from vandalism, decay and overhead costs that you have to pay if it sits vacant.
5. Get in the Game. There is nothing more expensive than cost of lost opportunity. We all know that inflation is here to stay for the next few years. If our gas and groceries cost more today, won’t our housing cost more in a few years? The best time to buy properties has never been when the market is going up—the best time is actually right now. Where else, outside of a game of Monopoly, have you been able to purchase multiple properties for as little as $25,000?
Contact Lori Greymont at
888-�98-0�5�
FEATURE
LEVERAGING DISTRESSED ASSETS TO YOuR ADVANTAGE
Lori Greymont
is CEO of
Summit Assets
Group. She
offers educa-
tional presen-
tations around
the U.S., trains
and mentors
people new
to purchas-
ing distressed
assets and
coaches
on creative
financing tech-
niques. Her
company sells
single fix and
flip properties,
bulk lists, and
tenanted cash-
flowing prop-
erties.
June 2011 REI VOICE ��
THE CREDIT RESTORATION EXPERT HANNAH FLIEGELThe current economy has left investors reeling – Hannah has the expertiseto assist with increasing your credit score.
BEGIN REBUILDING YOUR CREDIT RATING AFTER BANKRUPTCY TODAY!www.HowDoYouScore.com
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415-999-9348CALL FOR DETAILS
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�4 REI VOICE June 2011
ADVICE
Short sales can be a boon to investors and an escape hatch for underwater homeowners. Buyers benefit from low short sale invest-ing prices, while sellers can get rid of mortgages they cannot af-ford. Lenders, on the other hand, eliminate non-performing loans without going through the whole foreclosure process, which can be much longer and more costly to them than a short sale.
When investing in a short sale remember two things: patience and patience. The lender must sign off on any short sale offer. The lender will also want assurance that there is no financial or other agreement between the buyer and the seller, and will prohibit the seller from ever again renting or owning the property. While some investors may choose to identify troubled ho-meowners and initiate the short sale paperwork, caution is advised. There are many federal regulations to pro-tect homeowners. The other path is to work with a listing agent. Agents can and do earn commission on a short sale. A few points out of your pocket may be worth having some-one with short sale expertise respon-sible for ensuring that the transaction is done properly.
Natalie Knowlton, Director of Short Sales for Nick of Time Short Sales is a third-party negotiator who has been working with short sells longer, and has more train-ing in the legal and ethical issues than just about anyone else in the field. As a professional involved
in short sales, we asked her what inves-tors ought to expect. “First, be prepared to agree to the lender’s terms. I’ve seen ap-proval letters that state no resale for 30, 60, or 90 days. If you intend
to flip a property this is an issue. Also, if the buyer intends to fi-nance the purchase, their lender may have seasoning issues.”
Asked about her challenges work-ing with homeowners, Natalie said, “Too many struggling homeowners buy into the myths about short sales. For example, they incorrectly think that they are ineligible if they own their own business, if they are cur-rently working, if they are current on their payments, if they have a retire-ment account, if it is an investment property, if they are collecting rent on the underwater property, or if they own several properties. None of these things necessarily disqualify a short sale.”
What are the positive outcomes that Natalie has seen? “My favorite outcomes are approval letters from the lender saying ‘will consider the Note paid in full,’ ‘full and final sat-isfaction,’ ‘agree to settlement short of full payment,’ and ‘we waive any deficiency rights.’ These are all wins for the seller. I’ve also seen approv-
als for investment properties with full satisfaction, investors who receive money at closing ($4,100 in one case), home warranties and pest inspections paid by the bank, past due HOA fees negoti-ated down and paid by the bank, investors who collect rent during the short-sale process, and second lenders agreeing to satisfaction. I’ve also seen 6% to 7% real estate com-missions go to the agents involved while I handle the paperwork as a third-party negotiator.”
“I’ve seen lives change and be-come better than the underwater owner ever imaged. One person thanked me for giving him his dig-nity back. People aren’t struggling with mortgage payments out of choice. And people shouldn’t be paying their mortgage with their retirement account when a short sale may be an option.”
If short sales are so wonderful, why aren’t more real estate pro-fessionals involved in them? “The rules and regulations required to run a legitimate business are very exacting,” Natalie said. “I fully com-ply with all government regulations and it takes a great deal of time and limits the way I can promote my business. Meanwhile there are oth-ers in the market making grandiose claims and defrauding the public. I must, and do disclose the following to all my potential clients: ‘I am not associated with the government and my services have not been approved by the government or the lenders. The short sale lender
might not agree or approve the short sale. A homeowner could lose their home and damage their credit if they stop paying their mortgage. If the offer is accepted or rejected the homeowner/seller does not have to pay our fee. The lender will. Hom-eowner/Sell-ers have the right to reject their bank’s of-fer without any charges from us. I’m a licensed agent DRE 01885366.’”
Parting thought? “Keep your money in your pocket. Distrust any-one who asks for a fee to assist with a short sale. We offer free consulta-tion to homeowners and investors, and we get paid by the lender if a short sale is approved. The money for a short sale should not come out of the homeowner’s pocket.”
Short take on Short SaleSNATALIE
KNOWLTON
�50-900-4�08
Natalie@
CALSSP.com
June 2011 REI VOICE �5
Short take on Short SaleS
OTHER TRUTHS ABOUT SHORT SALES
• Short sales are not for everyone
• A short sale is possible even after a Notice of Default is recorded
• HAFA will not save the world and give everyone $3,000
• Bankruptcy may not be the best option for preserving credit
• A 1099 does not always mean you will pay taxes
• Underwater investors may receive a refund on their taxes due to a short sale
• The homeowner may owe the lender money if it the property goes to foreclo-
sure—not always so with a short sale
• Homeowners can buy another house after a short sale
• Investors can and do buy short sales
• Short sales can be purchased in a LLC
by Aaron Norris
If you did the homework from last issue of the REI Voice, you observed a two-year-old and a 70-year-old using a smart phone and/or tablet computer. Were you amazed?!
What’s so wonderful about technology is that far more devel-opers are focusing on user inter-face (UI) and experience. An iPad is a perfect example of beautiful interface design. A two-year-old and a senior can both have an amazingly tactile, intuitive, and fun experience without having to know much about the technology they’re using.
Facebook is another of these intelligently-built and addictively interactive sites. It has exploded to over 600 million users since it launched in 2004. Here you can see which sexy actress your grand-ma most resembles or reconnect with your 3rd grade crush. Or, you can use it strategically for busi-ness.
It’s still shocking to see so many small businesses com-pletely ignore Facebook as a seri-ous business tool. Hopefully the accompanying chart puts it into perspective.
You may be wondering why Facebook has more profiles than people in both San Francisco and Sacramento. I have a question in to Facebook on this matter, but it’s most likely due to pages/profiles for things like business, nonprof-its and brands.
In comparison, Mercury News and the San Francisco Chronicle have daily circulations of 577,665 and 235,350 respectively. (Source: Audit Bureau of Circulations.) Not bad, but Facebook has almost as many Gen Y’ers as it does total
subscribers! Granted, print and Facebook
are extremely different mediums. Both have their benefits, but the numbers in social media are pret-ty exciting. Properly leveraged, you could be potentially reaching and engaging very targeted demo-graphics.
Enough about numbers — I promised you some tips to en-gage. Hopefully I’ll reach both those that are beginners and avid Facebook addicts. STEP �: BE INTERESTING
Ask someone extremely honest and close to you if you’re interest-ing or not. If you’re told you’re as interesting as a door knob, don’t worry. Simply skip to step 6 and read the book, Tipping Point. It’s time to figure out if you’re a ma-ven, connector, or a sale person. Knowing is half the battle. And
when you know, you can use what you’ve got to get what you want. STEP �: CREATE TWO SEPARATE
ACCOUNTS
If you’re just beginning with Facebook, create an account. Use your personal email address and only invite close friends and fam-ily. Have someone familiar with Facebook settings review important privacy information and settings. Then? Play! Learn the site, the tools, and the games. Learn how to post pictures, post a status update, and make sure you know the difference between posting on a wall and sending a private message. Then listen, but not in the auditory sense. Spy on what other people are doing in your network and get to know the rules of engagement.
For those where your personal network is almost 100% uninter-ested in your work and you plan
to use Facebook for business pur-poses, consider opening a second account using your business email (it must be a different email from your personal account). Use this exclusively for engaging in business, for networking, and for customer service. Separating to a business account gives you more freedom to talk about work with-out your personal friends finding you annoying. It also allows you to friend acquaintances without showing them high school photos of you with a mullet or foot-high bangs.
In all seriousness, use common sense and watch what you post online. If you’ve created a net-work of acquaintances, they don’t always need to know where you are at, what your kids are doing, and how many times you brush your teeth. Facebook has built in
FEATURE
FACEBOOK FOR SMARTIESAaron Norris is
Vice President
of the Norris
Group where
he is respon-
sible for busi-
ness devel-
opment and
production of
TNG’s award
winning radio
show, events,
and education-
al seminars.
Mr. Norris is
also principal
at Palisoul,
Norris, +
Conroy, a
marketing
and strategy
team based
in Southern
California
and hosts the
marketing
and business
podcast, The
Cocktail Party
Statement.
The number of Generation Y (ages 13-30), Generation X (ages 31-46), and Baby Boomers (ages 47-64) on Facebook
compared to the new census numbers for San Francisco, San Jose, and Sacramento.
Source: Facebook and US Census Bureau 2010 dataset.
226,860
500,340
564,940
805,235
125,960
248,940
329,620
945,942
191,080
315,120
393,060466,488
Comparison of Facebook Profiles to General Population
SAN FRANCISCO SAN JOSE SACRAMENTO
Facebook Demographics (by age): ��-�0 ��-4� 47-�4 General Population
�� REI VOICE June 2011
FACEBOOK FOR SMARTIESsome rich privacy features and filters to separate who sees what but some might prefer a separate profile only for business.�. CREATE A BUSINESS
OR FAN PAGE
Facebook has made a lot of changes to the way fan pages work in the last few years. Creating a business page al-lows you to post information strictly on your business ranging from address and times open to pictures and web links. This is not as personal as having a personal Facebook account but could easily replace the need for it as long as someone monitors and updates the page regularly.
These pages have some additional benefits. Putting in your physical ad-dress allows people to “check in” to your location when they visit you — thanks to GPS technology. You can also install several apps to al-low things like your blog, Twitter, and YouTube accounts to automati-cally post content to your Facebook page. These pages can also be used for the “like” buttons on your website and or to advertise on Facebook and reach more fans. 4. SHOW UP
Many people make the mistake of creating an account and disappear-ing. This reminds me of an 8th grade dance. No one is going to talk to you cowering in a dark corner. Post inter-esting content, become an indispens-able resource, and engage those willing to “like” your page. If you can’t do these things, see number one above. 5. ADVERTISE
Once you’ve set up a page, why not post an ad to get even more followers? The best way to start is create a simple ad delivered to friends of friends. Set a very low cost per click or cost per thou-sand (you get charged when Facebook delivers your ad 1,000 times). Your ad will then only be delivered directly to the networks of the people who al-
ready love you. Word-of-mouth friending is a great
way to test the waters of Facebook ads. Be sure to watch your progress and budget. Don’t be afraid to try differ-ent wording and graphics to see what works and what doesn’t. I promise it’s much easier than you think if you give it some time. �. HIRE SOMEONE
Facebook marketing can be extreme-ly complex depending on your product, budget, and how much time you per-sonally have to spend managing pages.
However, it’s worth it. Facebook is ex-tremely detailed on what demographics can be reached. Unlike paid advertising on Google, Facebook can easily target genders, ages groups,
education levels, hobbies, and interests. Imagine delivering your ad over and over only to single women over the age of 50 who like the book How to Win Friends and Influence People and live in San Francisco. Yep, it’s that powerful.
It’s absolutely acceptable to hire someone to help you manage Face-book. However, not your 13-year-old niece who knows nothing of your business and who might litter your wall with LMAO, LOL, BRB, and a host of other acronyms you know nothing about.
Treat Facebook like any other serious advertising channel.
Make sure whomever you have manag-ing it understands your product, your values and mission, and how you expect them to engage your fans and potential customers.
Facebook leveraged correctly can be an incredible tool for customer ser-vice, networking, and referrals. It’s not just for college kids anymore.
Contact Aaron Norris at
95�-780-585�
June 2011 REI VOICE �7
�8 REI VOICE June 2011
branding. marketing. strategy & implementation.SusanHareMarketing.com408-391-8068Susan@SusanHareMarketing.com
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June 2011 REI VOICE �9
ACCOUNTING
michael gray, CPA408-918-3162
www.realestateinvestingtax.
com
richard smith & Associatesrichard smith
408-446-5551
www.richardsmithtax.com
BROkERAGE/AGENTS
Csr real estate servicestuart baeriswyl 408-373-6766
www.customerservicereality.
com
FINANCIAL ADVISORS
bay Area Plannersdavid beck408-725-7135
info@
retirementplannersonline.com
www.
retirementplannersonline.com
INSURANCE
brighton financial groupvernon Williams408-931-6582
www.farmersagent.com/
vwilliams
American general life & Accident insurancesandy Zhara405-297-8577
IRA
entrust Administration inc.lamarr baxter916-509-7271
www.entrustcalifornia.com/
oakland
irA services trust Company michael mcnair650-593-2221
LEGAL SERVICES
Chillag & Associates, P.C.nancy A. Chillag650-321-6796
www.chillag.com
Jeffrey b. hare, APC408-279-3555
www.jeffreyhare.com
PROPERTy SERVICES
dryfastKarla Cruz415-861-8003
www.dryfast.net
ertenviornmental remediation technologies, inc.frank valerga408-896-7124
www.ertinc.com
thrasher termite & Pest Control inc.Janet thrasher408-354-9944
www.thrashertermite.com
REAL ESTATE INVESTmENTS
ACe Capital groupbrian Kammerman650-364-3330
www.ace4wealth.com
bay Area equity groupAdrienne Poche408-369-9244
bayareaequitygroup@gmail.
com
www.bayareaequitygroup.com
Carolina liquidatorAlex franks803-325-1925
www.carolinaliquidator.com
memphisinvest.comChris Clothier877-773-9998
www.memphisinvest.com
real equity investment groupPriyam sawhney925-639-3674
www.realequity.cc
stonecrest investments llCsteve freeman408-557-0700
www.reo4sale.net
summit Assets grouplori greymont888-298-0652
www.summitassetsgroup.com
the norris group 951-780-5856
www.thenorrisgroup.com
the real estate marketplaceKenneth mcninch650-489-5712
www.theremarketplace.com
Wilson investment Propertiestom Wilson408-867-1867
www.tomwilsonproperties.com
SHORT SALES
nick of time results teamnatalie Knowlton650-900-4608
www.nickoftimeresultsteam.
com
TRAINING & EDUCATION
black belt investorssensei gilliland951-280-1900
www.blackbeltinvestors.com
California Apartment Associationrachelle hepburn408-342-3500
www.caanet.org
foreclosure radarsean o’toole925-513-7175
www.foreclosureradar.com
going beyond real estateles isralowKDOW 1220 AM
www.goingbeyondrealestate.
com
real Wealth networkKathy fetke925-280-2830
www.realwealthnetwork.com
OTHER SERVICES
susan hare marketing susan hare408-391-8068
susan@susanharemarketing.
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www.susanharemarketing.com
everyCircle.comCesar Plata408-352-5932
www.everycircle.com
SOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR
HELP REAL ESTATEINVESTORS HEARYOUR VOICE —ADVERTISE IN
REI VOICE MAGAZINETODAY
Contact Meghan [email protected]
INVESTOR RESOURCES
�0 REI VOICE June 2011
by Geraldine Barry
We hear that the market is ripe with deals. So why is
it so hard to find one? One of the investors I know, a
sharp go-getter, told me, “Ger, the money isn’t the
problem. I can’t find deals.” Of course this investor
could easily find properties to purchase, but as
I said, he’s a sharp fellow, he’s looking for deals:
properties that will turn a profit for an investor. Here,
then are my top five tips for finding deals.
1LISTEN TO THE ADVICE from ForeclosureRadar.com and “Keep your periph-
eral vision sharp. While you’re pursing one deal, keep your eyes open for
others.”
2BE OPEN TO DIFFERENT TYPES OF PURCHASING OPPORTUNITIES—
REOs, foreclosures, short sales, auction properties, and even the house down
the street.
3DESPERATION LEADS TO BAD DECISIONS. Sure we all want a deal, but not
so badly that we over-pay. A bad deal is no “deal” at all when it becomes a dead-
weight consuming your time and resources. Consider the true cost of your invest-
ment and run the numbers; you need a solid margin for error particularly if your
goal is to flip the property. If the numbers don’t make sense - move on quickly,
don’t waste time and energy.
4WRITE OFFERS. Lots of them. You need the odds in your favor to win a good
deal. Having several options will help you walk away from a mediocre deal (see tip
#3).
5LET PEOPLE KNOW WHAT YOU DO. Move beyond just networking with other
investors. Expand your horizons. Let everyone you meet know what you’re look-
ing for. You best lead may come from the person on the treadmill next to you at
the gym. People love to help other people. It’s part of our nature. Be helpful and
open to help others, work consistently toward your goal, and you will see amazing
things happen!
Geraldine Barry is founder and president of SJREI Association, the premier educational and networking association for real estate investors in Silicon Valley. Under
Geraldine’s leadership SJREI has grown from a half-dozen investors to a vibrant three chapter organization with over 400 investors attending monthly meetings.
She has interviewed many real estate pros such as Bruce Norris, John Schaub, and Jon Freeman all of whom have been guests of SJREI. In addition to leading SJREI,
Geraldine is an active real estate investor, guest host of the radio program, “Going Beyond Real Estate,” a frequent guest on the nationally broadcasted NTDTV,
Publisher of REI Voice Magazine, and producer of the acclaimed annual SF Bay Expo. Geraldine is also a principal in Miles Barry Contract Furniture.
Ger’s Top 5
Ger’s Top 5
Feb. 2011 REI VOICE ��
As the Executive Director and Co-Founder of the SJREI Association,let Stuart Baeriswyl be your all-purpose Real Estate Broker.
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�� REI VOICE June 2011
Page 1
LOCATION: DESERT HOT
SPRINGS, CA
APPRAISED VALUE: $86,000
LOAN AMOUNT: $50,000
LOAN TO VALUE: 58.13%
PAYMENT TO INVESTOR: $375
RENT RANGE: $900-$1400
TERM OF LOAN: 8 YEARS
Property Facts:
3 BEDROOM, 2 BATHROOMS, 1,323 SF, 8,712 SF. LOT, BUILT IN 1990.
#
1 $900 TH 3 br/2 ba 1,294 sqft 66444 Desert View Ave Desert Hot Springs,
CA 92240
7/13/2010
2 $900 SFH 3 br/2 ba 1,412
sqft
13725 Richard Way Desert Hot Springs, CA
92240
7/13/2010
3 $900 SFH 3 br/2 ba 1,200
sqft
65635 Avenida Ladera Desert Hot Springs,
CA 92240
7/13/2010
4 $1,025 SFH 3 br/2 ba 1,371
sqft
13227 Calle Amapola Desert Hot Springs,
CA 92240
7/13/2010
5 $1,100 SFH 3 br/2 ba 1,385
sqft
10775 Ambrosio Dr Desert Hot Springs, CA
92240
7/13/2010
6 $1,200 SFH 3 br/2 ba 1,550
sqft
10761 San Miguel Rd Desert Hot Springs,
CA 92240
7/13/2010
7 $1,350 SFH 3 br/2 ba 1,904
sqft
64735 Pinehurst Cir Desert Hot Springs, CA
92240
7/13/2010
8 $1,400 SFH 3 br/2 ba 1,634
sqft
64513 Spyglass Ave Desert Hot Springs, CA
92240
7/13/2010
If you are interested in this trust deed investment and would like to see the entire appraisal,
please call the of ce at 951-780-5856 and ask for Craig Hill.
We currently work with several self-directed IRA companies to enable our investors to fund
these through retirement accounts. If you’d like a list of IRA rms, please call the of ce and
ask for Aaron Norris or Diana Barlet.
Below are a few recent examples of trust deeds available through The Norris Group.
Location: Fontana, CAAppraised Value: $170,000Loan Amount: $102,000Loan to Value: 60%Payment to Investor: $765 per month
Location: Desert Hot Springs, CAAppraised Value: $86,000Loan Amount: $50,000Loan to Value: 58.13%Payment to Investor: $375 per month
Location: Hesperia, CAAppraised Value: $92,000Loan Amount: $55,000Loan to Value: 59.78%Payment to Investor: $412 per month
Location: Victorville, CAAppraised Value: $75,000Loan Amount: $45,000Loan to Value: 60%Payment to Investor: $562 per month
To receive property information sheets of available trust deeds and a copy of our free book and DVD on trust deed investing, call our office at 951-780-5856.
Page 1
LOCATION: FONTANA, CAAPPRAISED VALUE: $170,000LOAN AMOUNT: $102,000LOAN TO VALUE: 60%PAYMENT TO INVESTOR: $765RENTED: $1,650 PER MONTHTERM OF LOAN: 8 YEARS
Property Facts:Duplex with total of 3 bedroom, 2 Bathrooms, 1,470 sf, 9,000 sf. lot, built in 1949. One two bed-
room on bath unit and single one bedroom one bathroom.
If you are interested in this trust deed investment and would like to see the entire appraisal,
please call the of ce at 951-780-5856 and ask for Craig Hill.
Zilpy.com – Rents (One Bedroom) #
1 $775 TH 1 br/ 9351 Bennett Ave, Fontana CA, 92335 6/4/2010
2$750 TH 1 br/
Bennett & Randall, Fontana CA, 92335 5/8/2010
3 $750 SFH 1 br/1 ba 8569 Rosena Ave, Fontana CA, 92335 7/15/2010
4$850 SFH 1 br/
16550 Arrow Blvd, Fontana CA, 92335 7/3/2010
5 $650 SFH 1 br/ 8047 Cypress, Fontana CA, 92336 6/4/2010
6$775 SFH 1 br/1 ba Sierra Ave & Valencia Ave, Fontana CA,
92335
1/17/2010
7 $675 SFH 1 br/1 ba Sierra Ave, Fontana CA, 92335 1/8/2010
Zilpy.com – Rents (Two Bedroom)#
1 $895 TH 2 br/1.5 ba 875 sqft 9151 Date St, Fontana CA, 92335 7/15/201
0
2$945 TH 2 br/1.5 ba
16235 Randall Ave, Fontana CA, 92335 7/15/2010
3 $950 TH 2 br/1 ba 17898 Marygold Ave, Bloomington CA,
92316 5/8/2010
4$945 TH 2 br/
Randall Ave & Citrus Ave, Fontana CA,
92335 7/3/2010
5$1,100 SFH 2 br/1 ba
16751 Hawthorne Ave, Fontana CA, 92335
7/3/2010
6$850 SFH 2 br/1 ba 800 sqft 9210 Pepper, Fontana CA, 92335
5/18/2010
7 $850 SFH 2 br/1 ba 9258 Pepper Ave, Fontana CA, 92335 5/8/2010
8$800 SFH 2 br/1 ba 950 sqft 9142 Pepper Ave, Fontana CA, 92335
40374
9 $775 SFH 2 br/1 ba 875 sqft 9148 Pepper Ave, Fontana CA, 92335 40264
10 $950 SFH 2 br/1 ba9040 Cypress Ave, Fontana CA, 92335 40333
1 bedroom
2 bedroom
w w w.TNGt rustdeeds.com951.780. 5856
Cal i for nia D ep ar tm ent of R eal E s t ate, R eal E s t ate Bro kerBr uce N or r is F inancia l G roup Inc .
D BA T h e N or r is G roupD R E L icens e 01219 911
California Trust Deed Investing
Savings accounts, CDs, and stocks have offered dismal returns over the past several years. The Norris Group’s trust deed investments earn 9% return backed
real estate.
Since 1997, our experienced team of experts has originated California trust deed investments to private individuals,
accounts (including IRAs).
of dollars every month and demand continues to increase. We scrutinize
a trust deed is ever presented to our private money sources.
resources are helping investors clean
DVD on trust deed investing.
Not everyone has the time or the expertise necessary to be a full-time real estate investor. But there’s still a way to take advantage of the unbelievable opportunity at hand. Welcome to the world of trust deed investing.
1
Call 951-780 -5856 or v isit our web
site today for your
Free Book and DVD.
California Trust Deed Investingby
Navigat ing the prof i table wor ld of t rust deed invest ing with the help of one of Cal i fornia’s leading hard money lending companies.
B y B ru ce N o rri s
8.875x11-IE-Magazine.indd 1 10/16/2010 10:52:31 AM