Archive for January, 2014

Money Loves Speed

Posted on January 24, 2014 by

Did the title of the article get your attention?  I thought so.  Money does love speed.  Money in general loves speed.  That means getting off your “you know what” and putting in to action whatever it is that needs to be done in your business (and in life).  And the faster you do it, the more likely you are to be rewarded for it, financially.  This will be one of my resolutions for this year – act with more Speed.

Let’s face it. You’re not getting any younger, the clock is always ticking. And, the sooner you realize the inherent value of speed, I promise you this; the more seriously you take your goals, the more urgency you will build into your daily habits.

Ever watched a commercial for some gadget or concept that you had thought of in the past and said “hey – that was my idea”?  It may have been your idea and you should have acted on it.  Instead, somebody else did and now they are billionaires. (Yep – I thought of Facebook too, but Mark Zuckerberg beat me to it).

But I’m not talking about just ideas.  In general, things tend to work out better when you act on it faster.  I don’t recall ever succeeding at something because I got there last.

Naturally, I’m going to relate this concept to Real Estate Investing, where Speed = Money.  Because Money loves Speed. Read More→


When you know the best pockets or market areas around the U.S. to find discounted real estate, you are half way home. All that is left is evaluating the inventory for maximum profit. For those of you connected to REIAComps , the control and feeling of confidence you have over your deals is priceless. Using REIAComps to investigate the value of “Shadow Inventory” houses as they come to market, against the recent sold comparables, will provide you a solid position to “make your profit when you buy”.

First, let’s define “Shadow Inventory”. The general definition goes like this; the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of properties that are seriously delinquent, in foreclosure or held as REO by mortgage servicers, but not currently listed on multiple listing services MLS’s.

CoreLogic released its November National Foreclosure Report with a supplement featuring quarterly shadow inventory data as of October 2013. According to CoreLogic analysis there were 46,000 completed foreclosures in the United States in November 2013, down from 64,000 in November 2012, a year-over-year decrease of 29 percent. On a month-over-month basis, completed foreclosures decreased 8.3 percent, from 50,000 in October 2013. Read More→


When working with a Seller on purchasing a short sale it is very important to know the terms and conditions that the new buyer must uphold with the Homeowners Associations. Recently, we started working on a short sale wherein the Seller owed the Homeowner Association a fee of $457.00 per month and another Homeowner Association issue wherein they would only allow the Buyer to be an owner occupant. The Homeowner Association claims that the percentage of rentals have been filled and since that quota was met, this leaves only owner occupants eligible to purchase the property. Now your pool of buyers has been decreased greatly leaving only homeowners to buy the property.

The first thing you need to do when obtaining a short sale or any type of deal from a Seller, that you are interested in purchasing the property to fix and flip or just rent, is to obtain the Homeowner Associations Bylaws. There are Bylaws and Declarations that the Homeowners Associations are to provide to a new buyer. Here are some of the things you must look for to prevent any show-stoppers: Read More→


Now that January is past, it’s time to settle in and think about some of the more important but often forgotten items. Chief among them is your beneficiary designations. The person or entity currently slated to inherit your Self-Directed IRA account may no longer be the person you want to inherit your account. This applies to your Self-Directed IRA, accounts under employer plans such as 401(k)s, 403(b)s, profit sharing plans, pension plans, and the many assets you have worked hard to acquire. There are numerous documented cases of individuals or estates inheriting retirement accounts and assets when the owner wanted the beneficiary to be a different party. The following tips can help you to track your beneficiaries and assets:

  • Maintain a beneficiary file: Create a list of all of your retirement accounts/assets and identify the named beneficiaries. If you do not already maintain all of this information in one easily accessible area, now may be a good time to start. This will help you to keep track of both your current beneficiary designations and all of your assets.
  • Perform annual check-ups: Check your beneficiary forms and your Will at least once per year to determine if you need to make any changes. Events involving your beneficiaries may necessitate changes to your current named beneficiaries. For instance, you may have gotten married or divorced, and need to update your beneficiary form to add or remove your spouse or former spouse. Read More→

Atlanta Private LendingSays Bruce Silverman, “Atlanta Private Lending has been the premier Hard Money lender of choice for many of Atlanta’s top rehabbers“. Founded in 2007 by James Melton, a top Account Executive for Yale Mortgage, Atlanta Private Lending has always focused on customer service.  As a direct lender, based right here in Atlanta for the past 7 years, APL has the speed, flexibility and knowledge of the marketplace that few can offer. With quick answers to customer loan questions, common sense underwriting and fast closings to meet funding needs, Atlanta Private Lending is known as a “Rehab” Lender but has many other products to offer such as construction loans, commercial “bridge” loans, no doc equity lending, asset based lending and cash out refinance.

APL has two new loan programs that were designed specifically for investors. For wholesalers they now have short term transactional funding. This is something that can be a key ingredient to the success of any wholesaler. Secondly, for experienced rehabbers they now offer an “Equity Sharing” program. This program is designed for the rehabber who may have all their available cash tied up in current projects but has just had a creampuff of a deal fall in their lap. APL will provide 100% of the costs to do the loan, up to 70% ARV and then they will split the profits, or “share equity”. Read More→


By this time, most people are at least aware that mortgage banks were less than honest in how they created and sold mortgage backed securities over the last 15 years.  It has driven a lot of negative sentiment towards the banks since the housing market crashed in late 2007, but very few people have a clear understanding of exactly what the banks did.  That is completely understandable because the banks set up an extremely convoluted system of fake transactions specifically to avoid people catching on to what they were doing.  In this article I am going to attempt to break it down into simple terms.

As the housing market heated up in the early 2000s, investors began to invest in what are known as mortgage backed securities.  These are securities that consist of large pools of mortgages.  The idea behind these investments was to capitalize on the housing boom while minimizing their risk.

In order to do this, investors had to work through brokers who compiled mortgages into securities on the investors’ behalf.

The way the investors would invest in these funds was to use their money to fund a trust that would acquire mortgages either by originating them as the lender, or by purchasing existing mortgages.  In a perfect world, the trust itself would then be the lender or purchaser designated on the mortgage. Read More→


Why an IRA-Owned LLC or Trust?

Posted on January 24, 2014 by

I am often asked if an IRA-owned LLC or trust makes sense. Well, like a lot of things, it depends. If your normal custodial account is working well for you, there may be little reason to add these structures. But there are situations for which you may want to consider them as covered below.


Promoters push the IRA owned entities as a way for you to have checkbook control over your IRA funds. While it is an arguable point as to whether you should be the manager or trustee of your IRA-owned LLC or trust (we will postpone that discussion until the class next month), there are other reasons to use these entities. For example,

Privacy – These IRA-owned entities will keep individual IRA account holder’s names off the public records. This is true even for low liability paper investments such as contracts, notes, mortgages and options as well as real property ownership. Read More→


Is QuickBooks Pro 2014 Right For Me?

Posted on January 24, 2014 by

It is the goal of this column to answer questions about QuickBooks and how it is used in the REI arena. Know how to record transactions in the proper way and have your set of books in good shape when it comes time for taxes. It is our intention to do this by you the members submitting questions to, and getting answers here in this column.

Q: I have used my business checking/debit card to make a number of purchases that were for me personally and have nothing to do with my business – how can I fix this?

A: You have two choices: You can reimburse the company for those expenses and put them in an account (equity) called Personal Expense and then when you make the deposit you apply that to the same account.  Or you can just leave them in the Equity account and this will become income to you at the end of the year. Read More→


Get Seller Financing

Posted on January 24, 2014 by

Buying and rehabbing distressed properties can be a lucrative business but it can also be risky. Rehabbing and flipping often generates quick checks but may also take some upfront cash to get the deal done. Here are some tips for rehabbing property with seller financing so you keep more of that cash in your own pocket.

If a property is in need of repairs or it won’t cash flow at the price the seller is asking then you may have difficulty getting a bank loan for the deal. Get the seller to finance the deal. Create an offer that will give the seller the price they need but only if they will carry back the loan on the property in a first position mortgage.

If a seller will carry back the loan then you will likely need to pay the asking price or close to it. Your offer must create value for the seller. The majority of the time when a seller carries back a note on a property they are usually more concerned about the price they are getting than the terms of the loan. This can be in your favor. Create an offer that is close to or at full price but with an interest rate and terms that will allow for small payments and bigger cash flow. One example would be making a full price offer with interest only payments. The full amount of the loan would be due when you sell or refinance the property. The risk here is that you don’t pay down any of the loan amount but it would be much easier to cash flow. This works well if the market is appreciating quickly. You can cash flow the deal and then flip it in a few months for a big check. Read More→


As the title suggests, this is the beginning of a five-part discussion about contract for deeds.  In this series, I will discuss several topics relating to this contract, including the four remedies that a seller has upon borrower default and why most Georgia attorneys do not recommended this type of agreement for either buyers or sellers.  I begin by providing a description of a contract for deed, its background and application.

A contract for deed is an archaic legal contract, which is seeing recent revival.  Originally referred to as a bond for title, a contract for deed can be called several other names including a land contract, agreement for deed or installment sales contract.  Under Georgia law, all these agreements are treated synonymously. 

When a seller of real estate agrees to finance some or all of the purchase price to the buyer, he may use a contract for deed.  While a contract for deed is one way of many to “seller-finance” a transaction, many sellers find it advantageous for the reasons outlined below.  Other ways to seller-finance include a mortgage, security deed or lease-option contract.  Read More→


Due Diligence

Posted on January 24, 2014 by

In real estate investing the one thing that should always be done is due diligence. Due diligence means investigating any and everything that has to do with the property you are purchasing, selling, assigning, wholesaling, and any other type of transaction. This includes looking into the projected after repair value, repair cost, title, ownership, address, legal description, property boundaries, liens, mortgages, etc.  The last thing you want is be involved in a fraudulent transaction that could ruin your reputation and even worse, cause someone to lose money. So how is this done?

Well, there are a few things to look into when considering buying a home. In this example we will examine a purchase from a wholesaler that contracted the property from an REO agent. I chose this as an example because this is what many investors are accustomed to seeing and what has been used to defraud many investors as well. When purchasing a property in this manner you want to see the original contract going from the current owner to the wholesaler. Even if the wholesaler is double closing the property, you want to see this contract to make sure they have the right sell or assign it. Once you confirm that the wholesaler indeed has the property under contract you want to see the title commitment that the title company will provide the wholesaler. Assuming you are using your own go-to title company, which is different than the one the wholesaler is using, you can use your title commitment to make sure it matches up with the wholesaler’s title commitment. Keep in mind that title companies are human and can also make mistakes. Yes, they do insure their mistakes but double checking them to prevent these mistakes can save you tons of time and money. Read More→

The Beginning Investors Group is Getting BIG! We Had 116+ Investors at Our January Meeting!

Beginning Investors GroupYes, you read that right, 116+ people gathered together at January’s BIG meeting for a record turnout. We listened to an action oriented, powerful presentation made by William Crowley on Credit Restoration. William informed us of a lot of points that many of us did not know about our credit reports and history. He delivered his 4 step system to restore credit and facts about the UCC code. William touched a nerve that a lot of us have… Many of us are slaves to debt and our credit history. William is driven by his passion to help us break those chains of credit slavery.

Bernard Lawson and Ester WalkerWe also expanded our meeting agenda. We have started a “First Deal” segment, where we will highlight members as they do their first deals. Congratulations to Bernard Lawson and his partner Esther Walker of BE Property Investors LLC for taking the “leap of faith” and getting into the game. Congratulations to Jason Baines too who did his first “subject to” deal. If you are a first time investor and a regular attendee of our meeting, we want to hear about your first deal!

Mike Cherwenka of Goldmine PropertiesMike Cherwenka of Goldmine Properties also spoke about the in’s and out’s of Wholesaling during his long real estate investing career. Rock Shukoor also taught us “How to Wholesale Like A Pro” during Late Nite Networking.

Dustin Griffin also spoke on the benefits of having an Atlanta REIA membership and updated us on some of the exciting new subgroups that Atlanta REIA is forming now. He also updated us on how our members can participate in the new DIY Network TV Show called “First Time Flippers”. If you want to know more details, just go to First Time Flippers. The information is free, just place the order to download the information. Read More→