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Nor th American REIA

T H I S M O N T H : R O B E R T W O O D R U F F

Volume 6 , Issue 9

September 2013

I N S I D E T H I S I S S U E :

Monthly Event Schedule 2

IRA or 401k? 3

Coaching Programs 4

REIA Sub-Groups 7

Form of the Month 9

Assess Cash Flow Risk 10

Sponsors/Partners 12

Upcoming Boot Camp 13

Membership App 14

REIA BULLETIN

Questions? Comments? Have an

article to submit? We appreciate

your feedback! Send email to:

Newsletter@REIAConsultant.com

Hello everyone, My name is Robert Woodruff. I just got back from 5 weeks

in Costa Rica and Panama to train the North American REIA Chapters how

to retire in record speed.

I retired at 32 years of age. The

experience that I needed to achieve

such a feat came from being a long

standing member of my hometown

REIA. Become a member of your REIA

today to ensure your own success in

life as I have mine. I travel the world

with my family living the life of my

dreams abroad. In my spare time, I

love guaranteeing you proven results

that will save you years in life.

I started investing when I moved south by unwittingly buying 2 mobile

homes and renting them out to pay for my college housing. "I was not

born with a golden spoon." I spent 7 years in college. While in college I

joined a few REIA's and learned how to flip houses, hold houses as rentals,

but what I learned "most importantly" was creative financing and the ne-

cessity of cash flow to set me free in life. Understanding the necessity of

cash flow allowed me to become a commercial business buyer instead of

just mobile homes, land, or houses. It truly set me free and gave me a

springboard to much larger investments.

I have many students from South Carolina and all over the country who

have achieved their financial freedom within 6-12 months using my no non-

sense strategies allowing them to become leaders of REIA's and devote

their time towards helping others succeed in life as we have.

I founded North American REIA. We are the FASTEST Adult Financial Litera-

cy Organization within our state, country, and abroad. What you need to

know about me as a professional is that I take care of my REIA Leaders,

Members, Employees, Assisted Living War Veterans, and Family. I take

your success and failure personally and l devote my time, my re-

sources, and organization to help ensure and guarantee that you succeed.

(Continued on page 5)

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Organizers

Terry Nation - nation.terry@gmail.com - (803) 807-8140

Lisa Cunningham - leeghall@gmail.com - (803) 873-8897

Steve Cunningham - saludasteve@gmail.com - (803) 479-7197

Rick Renner - rrenner2@sc.rr.com - (803) 960-3849

Don Kelley - don@donkelleyonline.com - (803) 413-8081

Mission Statement Columbia Real Estate Investors

Association is an organization dedi-

cated to helping you learn, grow

and prosper as a real estate in-

vestor. We provide educational

and networking opportunities to

real estate investors at all levels.

Legal Disclaimer Columbia Real Estate Investors As-

sociation does not exist to render and

does not give legal, tax, economic

or investment advice and disclaims

all liability for the actions or inac-

tion taken or not as a result of

communications from or to it’s

members, officers, directors, employ-

ees, contractors. Each individual

should consult his/her own counsel,

accountant and other advisors as to

legal, tax, economic, investment and

related matters concerning real estate

and other investments.

Content Disclaimer The views & opinions expressed by

authors of articles contributed to

this newsletter do not necessarily

reflect those of the association, the

board of directors or the staff.

Copyright @ 2009

Monthly Event Schedule

The Columbia REIA Open Meeting

Wednesday at 6:30PM

(immediately prior to 1st Thursday)

Woman's Investment Networking

every 2nd Thursday at 12:30PM

Deal Maker’s Breakfast

every 3rd Wednesday at 8AM

CASHFLOW 101

3rd Tuesday at 6PM

Technology & Internet Marketing

every 2nd & 4th Tuesday at 6:45PM

The Night Owl Social

every Last Wednesday at 7PM

Sales 101 / Public Speaking

Every Last Thursday at 7pm

Beginning Investors Group / Investing 101

Every 1st & 3rd Thursday

To receive monthly email notifications,

join our Meetup Site at:

www.Meetup.com/ColumbiaREIA

Columbia

Real Estate Investors Assoc.

www.ColumbiaREIA.com

Meetup.com/ColumbiaREIA

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What’s Better for Real Estate Investors - an IRA or 401k? By Phil Pustejovsky

More and more creative real estate investors

are switching to the individual 401k and loving

their new plan.

The Self-Directed IRA has been the standard vehicle

for alternative investments in retirement accounts.

As many creative real estate investors know, mutu-

al funds aren’t the only investing options for your

nest egg. You can buy real estate, tax liens, notes,

and even become your own private money lender.

Most people set up a Self-Directed IRA with an IRA custodian, then have learned to jump

through the hoops that go along with it. But did you know that there is a better way?

You’re about to discover what most real estate investors will never know about investing in real

estate in a retirement account. Introducing…

The Solo 401k

The Solo 401k, also known as an individual 401k or i401k, can be a great alternative to a Self-

Directed IRA for creative real estate professionals. Here are some of the benefits:

The Checkbook: With an individual 401k, you are creating a 401k plan for your own busi-

ness. You can elect yourself as the administrator. The administrator (you) is the one that

write the checks. Having the checkbook is much more efficient than going through the cus-

todian intermediary. For example, if you find a fantastic deal and want to get it under con-

tract with earnest money on the spot, you can do that with the solo 401k. With the self-

directed IRA, you have to wait for your custodian to cut the check, which could cause you to

lose the deal.

No UBTI: With both the self-directed IRA and the solo 401k, you can use borrowed money

to help with the purchase of real estate as long as the loan is non-recourse. However, with

the solo401K, you will avoid the Unrelated Business Taxable Income (UBTI) issue that is

triggered with a self-directed IRA.

Higher Contributions: The total contributions to a solo 401k can be larger per year than a

self-directed IRA. Plus, there are no income limits for Roth contributions.

Mistake Forgiveness: If you do a prohibited transaction, you have a chance to adjust your

(Continued on page 6)

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AR E YO U LO O K I NG FO R T H AT FI NA L PI EC E O F T H E P U Z ZL E?

REIA Bulle tin Page 4

Do you have all the tools needed to

succeed, but lack the motivation or

need better time management skills?

Would you find it helpful to work one-

on-one with someone who has already

„been there and done that‟?

How could brainstorming with other

investors on a regular basis help you?

Your REIA has programs available for

investors at all levels!

For more details on coaching levels

and tuition, send an email to:

info@reiaconsultant.com

WANTED: Good Speakers!

The Charleston REIA is

always looking for good

speakers who are willing to

share their knowledge. If

you know of a good speak-er that would like to speak

at one of our upcoming

meetings, please email:

newsletter @reiaconsultant.com

The Mastermind can be summed

up in two words: mutual bene-

ficiaries. Members of the mas-

termind group will not only pro-

vide others with sound feedback

and advice, but will also receive

these benefits from the group.

Some of the qualities we look for

in a participant include:

1. Drive and Commitment.

2. Diverse skills & experience.

3. Problem Solvers.

The conference call begins at

Noon and lasts for 1 hour. You

MUST RSVP on Meetup to receive

the number and pin. For rates &

availability, email:

mastermind

@reiaconsultant.com

MA S T ER M IN D CO N FER ENC E C A L L

In our continuing effort to pro-

vide the most value to our

members, the mastermind call

is now available only as a sub-

scription service. We do offer

one open call each month lim-

ited to 6 RSVP’s as a free trial.

Hassle-free Homes Project Management

hassle-freehomes.com

Take your R.E. investing

business to the next level

with a mentor, one-on-one

coach, or with one of our accountability programs!

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A great place to ex-

change contacts, deals,

knowledge and recharge

your motivation with like-minded investors. -

Curt-

I love the fact that oth-

er like-minded and suc-

cessful investors are

willing to come togeth-er and share not only

what they are doing

but how and why as

well. This is infor-

mation that is invalua-ble to your continued

success as an investor.

-Ryan-

(Robert Woodruff page 2)

I invest into the Medical field and have owned many medical business over

the last 10 years that relieve people of their pain and increase their Health

and wellbeing. I hire and fire Doctors. I work tirelessly to protect and enhance

the lives of everyone I come into contact with; Patients, Employees, REIA

Members, Leaders, and Coaching Students. I do my absolute best to ensure

that we have the best quality speakers who will transform your lives with

guaranteed results every-single-month. I hire and fire National Speakers.

When and if they get out of line, as a "Sheepdog," it is my job to run them off

& save you hardships from dealing with them.

I own several million dollars worth of real estate and small business and

train you proven strategies to do the same. I created our coaching programs

for North American REIA, I appoint our executive directors, treasurers, presi-

dents, vice presidents, subgroup organizers of the subgroups that you love so

much and ensure that you have a safe environment to learn NEW strategies,

fundamentals, and business concepts to propel you and guide you safely into

your desired future. Our Organization will truly handle all of your educational

needs no-matter your level of growth or development. (We also have

coaching programs for flipping houses, wholesaling, commercial in-

vestments, business management, and more...)

The Keys to Cash Flow was my first system to improve the lives of others.

AND WOW!!! What a Massive Success it has been! The Keys has been prov-

en to get You out of the rat race within mere months and provide you a

springboard to commercial investing and business management fundamentals

that will earn you millions of dollars passively.

Here' what you will learn at the Keys to Cash Flow Event:

*Creative Financing; Buy and sell using; Lease Options, Rent-to-Own, No

Money Down, 0% interest, Subject-to, and more.

*Creative Marketing; Save tens of thousands learning how not to market, and

earn up to a 30-50% response rate learning how to market correctly.

*How to analyze and negotiate a profitable deal

*How to not spin your wheels doing unnecessary things

*How to build enough passive income to retire within 6-12 months.

*How to fix and manage your own property

*How to pay NO TAXES legally!

*How to control other peoples property without the need for ownership or

bank qualifying

*How to live life on your own terms in record speed.

* How to begin a path to massive wealth & self-worth immediately.

.....and still far too much to mention. This event provides over

50+ proven benefits.

Visit: ColumbiaREIA.com Robert’s upcoming events!

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(What‟s Better for RE Investors page 2)

mistake in an i401k. With a self-directed IRA, a prohibited transaction usually ends up in a

liquidation of the plan. And liquidation has significant penalties and tax consequences.

Long-Term Cost Savings: The fees to set up an i401k may be more, but the costs to

maintain it are much less than having to pay a custodian each year. IRA custodians charge

as a percentage of the amount in your account, so the more successful and larger your self-

directed IRA becomes, the more you have to pay. With the solo 401k, the nominal ongoing

fees to maintain it typically just deal with keeping your plan up to date with the right paper-

work.

Be Your Own Bank: The feature that attracts a lot of people to the individual 401k is that

the ability to borrow up to $50,000 from it. And you can spend that borrowed money on

whatever you want. Just be sure to you pay yourself back.

You may be thinking, “How come I’ve never heard of this?” Four reasons:

First, it only came into existence in 2001, and a lot of people don’t know about the solo 401k.

Second, financial planners and advisers typically stick with what they know and many aren’t ed-

ucated on the i401k. Third, IRA custodians can earn more fees from self-directed IRA accounts

since individual 401ks require less interaction. Finally, the solo 401k is only an option for people

who have their own business. And that’s important to know–the requirements.

Individual 401K Requirements

Meeting the requirements for an individual 401k was tailor made for creative real estate inves-

tors:

Operate a Business: You must operate a business, since this is a 401k plan for your com-

pany. You don’t need to incorporate or file documents with the Secretary of State to have a

business. It can be as simple as a sole proprietorship or partnership, but you at least have

to have a small business, and that’s exactly what most creative real estate investors have.

Some Earned Income: Your income in this business must have at least some earned in-

come (or the intent, if you just started it), even if the majority is passive income from rental

property. Most creative investors can generate some earned income from a wholesale, an

assignment, or a flip.

No Full-Time Employees: Although you can have 1099 independent contractors as well as

part-timers, you can’t have any full-time employees outside of a spouse. Most creative in-

vestors fit this bill, as well.

i401K Drawbacks

Yes, there are a few drawbacks to be aware of, too.

(Continued on page 8)

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Great group of people!

Very welcoming to a

newcomer and very obvi-

ous that they care about each other's success... I

feel that I can learn a lot

and get a great deal of

knowledge to help me

achieve my goals.

-Renee-

Columbia REIA Sub-Groups

This group is a literal

treasure house of

knowledge and experi-

ences with people who are genuine and unself-

ishly willing to offer as-

sistance. It's a great

thing to know you're

connected to such a powerful network.

-Mark-

All Things Real Estate

StopPayingRent

Columbia.com

Lieve Enterprises, LLC

Property Investors

(803) 223-9109

“Night Owl Social”

Columbia REIA‟s monthly member mixer. Meet and Net-work with local investors, discuss the latest topics. You

can literally save thousands by learning from other inves-

tors' successes & mistakes.

Hosted by Terry Nation

“Deal Maker’s Breakfast”

Keep your week going strong with a motivational & pro-ductive morning meeting. There is no better way to start-

off a morning than in the company of other investors

sharing deals and ideas.

Hosted by Rick Renner

“CASHFLOW 101 Game Night”

Learn the basic philosophy of cash flow with like minded investors. For those who want to enjoy learning in a fun

and interactive atmosphere. You can practice investing

without the real-world risks!

Hosted by Lisa Cunningham

“Women’s Investment Networking”

Come meet with other women entrepreneurs & real es-tate investors from the Lowcountry. Meetings will cover

women specific topics for todays' real estate market, and

provide networking opportunities.

Hosted by Lisa Cunningham

“Tech Night” (Webinar)

This webinar you teach you the practical tools, tips, and techniques to help you incorporate technology into your

real estate investing business.

Visit our Meetup site for details!

Sales 101 / Public Speaking

Come out and meet with other entrepreneurs & real es-tate investors. These meetings will cover basic selling

techniques and presentation skills.

Hosted by Steve Cunningham

Beginning Investors Group

Investing 101: Learn all the benefits of your local REIA,

and also the basics of real estate investing. Get you questions answered by a “REIA veteran”!

Hosted by Don Kelley

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(What‟s Better for RE Investors page 3)

Competent Counsel: Very few advisers or IRA custodian companies really have experience

and a deep understanding of how to correctly set up and educate creative investors on the

nuances of real estate investing in a solo 401k.

Opening a Bank Account: Your favorite bank where you hold all of your other accounts

may not be able to open an i401k bank account. Some bankers will look at you with cross

eyes when you try to open one. But if you are a creative investor, you are probably used to

people being puzzled by your out-of-the-box thinking.

Obtaining Title Insurance: Getting title insurance issued on solo 401K purchases can

sometimes be a challenge. Title insurance underwriters don’t always know how to handle

them.

Self-Discipline: Perhaps the biggest drawback to the i401k is also its biggest strength, giv-

ing you the purse strings and having no person in the middle to hold you accountable. Out-

side of borrowing from it, you can’t use your retirement money for personal use, even

though you might have the checkbook in your possession. In fact, commingling personal

with retirement funds on any investment is not allowed. So if you have no self-discipline,

perhaps you are better off letting a third party custodian protect you from yourself.

The best way to overcome these drawbacks is to work with someone who has significant expe-

rience in setting up and administering these plans for creative real estate investors. They

should be able to set it up right with the proper paperwork, help you open the bank account,

provide materials, so you can educate title insurance underwriters on solo 401ks and assist you

along the way, so that you avoid any mistakes.

Much like any aspect of creative real estate investing, you have to work with the right people.

Solo 401K Investing

Investing in your real estate business using retirement money can be a great opportunity for

you. The individual 401k might be a better option for creative real estate investors, but every-

one’s situation is different.

For example, some self-directed IRA people don’t want to change and to acquire checkbook ac-

cess; they set up an LLC in conjunction with their IRA. This technique works, but the costs of

the set up and the annual fee for an LLC can be costly, and you still miss out on all the other

great benefits of a solo 401k.

More and more creative real estate investors are

switching to the individual 401k and loving their new plan!

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Form of the Month “Limited Power of Attorney”

(This form is available at our Meetup site in the Files section)

This month we have a limited power of attorney to use when tying up property.

As always, these forms are for informational purposes only. Please have your at-

torney review and modify them as needed. If you have any questions regarding

this form, please email them to: Newsletter@REIAConsultant.com.

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How to Assess Cash Flow Risk by Robert Woodruff

Hi, this is Robert Woodruff, President of the Charleston REIA and author of, “The Keys to

Cash Flow.” Whether it’s the members of my club, or the students from my course, the big-

gest thing I see most investors do not have is a clear understanding of cash flow risk. As a

matter of fact, I often meet investors who build large & small real estate portfolios and

subsequently lose “everything” because they had no clue on how to assess the risk of each

investment. Please pay close attention. In this article, I will show you how to determine the

cash flow risk of several investments.

But first, we all know that there are plenty of gurus with courses on how to buy property

using a plethora of no money down strategies. Each of these courses should carry a dis-

claimer that reads, “Warning, if used too often, this strategy will bankrupt you!” Although

these courses have disclaimers to protect the guru, they do not come with disclaimers like

this to protect you.

Let’s discuss the cash-flow risk associated with no-money-down deals on houses. Most of

the time, these properties were bought by sub-prime borrowers. Which means their credit

wasn’t the best. This also equates to them having a slightly higher payment than someone

with good credit. Which means one thing, upon renting the property to a tenant-buyer; we

will have a hard time making a decent cash flow off of this investment. We are taught by

Gurus through no money down strategies that we are to collect as many of these houses as

possible in order to build wealth and become rich. (Which is False.) Make no mistake, this

is a fools’ errand. I’ll show you why.

Imagine acquiring just 10 properties no money down. Each has $30,000 in equity giving us

a combined net-worth of $300,000 in real estate. Sounds nice right? Well, each property

has an average mortgage payment of $800 per month including taxes and insurance. We

can rent each property for $1,000 per month. This now means we have a combined total

cash flow of $2,000 per month IF all of our properties are filled and our tenants are paying.

But, “WHAT IF” they stop paying?? What if half of your tenants stop paying at the same

time? If half of your tenants stop paying, than you still get $1000 in cash flow from your 5

properties that are filled. Only now, you have to pay $4,000 per month for the ones that

opened-up. Not to mention the cost of fixing each property, AND the cost of marketing

each until they are filled. My question is, “Where do you plan on acquiring that money?”

Surely it will not be from your 5 houses that are filled. The 5 you have filled only bring you

$1,000 dollars per month. So where are you going to come up with the additional $4,000

PLUS what you’ll need to fix and refill your properties? I call this, “The Storm.” Warren Buf-

(Continued on the next page)

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(How to Assess Cash Flow Risk page 2)

fet calls it, “When the tide goes out.” Either way, it happens to ALL of us. As sure as day

turns to night, you will get hit by the storm. It’s just a matter of time before it happens. No

Investor is immune to this type of scenario. Although, there are things we can do to protect

ourselves from losing everything we fight so hard to accumulate. Let’s evaluate another

popular strategy, multi-family investments.

Multi-family investments are not very different from buying houses no money down. If you

buy a multi-family property at 70% of value, you will still have the same cash flow scenar-

io. When you add taxes and insurance to the payment for your 4-plex multifamily invest-

ment, you will have to make sure 3 of the 4 units are filled just to make your monthly pay-

ment. There is one helpful thing about this however. The big difference between multifami-

ly housing & single-family residential housing is that it takes more than one family to move

-out before you have to start making the payment. On the other hand, if your tenants stop

paying, you stand to lose 3 times more than you make on a good month. As you can imag-

ine, paying the full payment on a multi-family investment will most likely put you in a state

of emergency.

My last example is something that is rarely looked upon by new investors as being good

deals. Often, they are too worried about “other people’s perceptions’” of their socio-

economic status.

In this example, I will show you how to assess the cash flow risk of mobile homes or low-

risk investments. (AKA: RV’s, Trucks, Heavy Equip, Land, etc.) When someone purchases a

mobile home investment, they usually do it with cash. There is absolutely no mortgage

payment to speak of. However, if the home is in a park, instead of having a mortgage pay-

ment, you have lot rent. Lot rent is usually half of what you can rent the mobile for. So on

a good month, you make twice as much as what you would lose on a bad month.

See what I mean? The examples I gave you for cash flowing off houses & multi-family are

clearly upside-down. That means you stand to pay 3 to 4 times as much on a bad month

compared to a good one. Mobile homes on the other hand, are the complete opposite. You

make nearly double or more off a mobile home investment on a good month versus a bad

one. (For example: you make $3-400 on a good month, and only have to pay lot rent when

your tenant stops paying. Lot rent may only be $150-200 dollars.)

If being a successful investor is important to you, you must first consider and assess the

cash flow risk of your investments. “You must pay close attention to the numbers.” Not do-

ing so means the difference between brilliant success and utter failure.

Visit: ColumbiaREIA.com Robert’s upcoming events!

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“A good blend of begin-

ners to very active and knowledgeable investors

like minded and inter-

ested in the success of

everyone.” -David-

“Lots of people that

are willing to share

their knowledge if you

are willing to share some of yours. The

members really do

want to help YOU!!! “

-Brian-

Through partnership with Community Buying Group,

all REIA members can now save from these

suppliers and more! See an Organizer for details.

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