CashFlow Express - Why Wait for Wealth? It's RIGHT HERE! Featuring Randy Reiff, CEO, FirstKey...

Passive Income for Today & Tomorrow Passive Income for Today & Tomorrow

Ca$hFlowEXPRESS

PRiCelessVol. 2, no. 2, 2014

INSIDE: Strategies to Increase Your Wealth • PLUS: Highlights from Our National Expos

You Asked, They Listened: FirstKey Offering More Ways to Finance Your Investments.

FirstKey Lending Offers Investors Unique Options

FirstKey Lending Bridge Loan Features:

Loan Amounts: $10M+ Rate Type: Floating Loan Term: Up to 18 Months Property Type: 1- to 4- family residentialLoan-to-Cost: Up to 65%*Amortization: Interest onlyInterest rate: Competitive pricing*Higher on a case-by-case basis

FirstKey Lending Express Fixed Loan Features:

Loan Amounts: $500,000 to $4M Rate Type: Fixed Loan Term: 5 and 10 year Property Type: 1- to 4- family residentialLoan-to-Value: Up to 75%Amortization: 20 to 30 yearInterest rate: Competitive pricing For more information, please contact Brian Mascis at:1-855-299-1944

FirstKey Lending closed dozens of Express and Conventional

Transactions recently. $1,659,000

41 Properties locatedin TX, OH, GA

$4,000,00076 properties located

in NC, SC

$9,750,00085 properties located in CA

$18,500,000340 properties

located in FL, GA

$32,00,000450 Properties located

in FL, IN, MD,MN, NC, TX

Randy Reiff, CEO of FirstKey Lending

A year ago, New York-based FirstKey Lending was the first to step into a new financing space – making capital accessible to small- and medium-sized investors in one- to four-family resi-dential rental properties nationwide.

The financial firm’s Chief Execu-tive Officer, Randy Reiff, says the firm purposefully positioned itself to “invigorate the small and middle markets” and to “empower smart, entrepreneurial investors to build and optimize their portfolios and busi-nesses.”

The financial backing of Cerberus Capital Management, L.P., one of the country’s largest private investment firms, gave FirstKey the opportunity to hit the ground running while focusing its attention on developing the prod-ucts its customers needed.

Following the successful introduc-tion of its Conventional fixed- and floating-rate loan products for larger investors needing $5M to over $500M in funding, FirstKey launched its Express loan product for investors seeking loans of $500,00 to $4 million in late 2013. That product has deliv-ered in a big way. “We’ve been thrilled at the response of real estate investors to our Express product, which we were able to introduce in an affordable way by streamlining the documentation and closing processes,” Reiff said.

These Express loans offer inves-tors reduced borrowing costs and a much more efficient process than was previously available to these owners so that they can buy additional one- to four-family properties, refinance their existing debt or cash out.

Reiff said that FirstKey has seen strong demand for its products and only expects that demand to increase.

“Our business is accelerating as more and more customers – most of whom have historically had only limited ac-cess to this type of financing – become aware of the variety of products First-Key offers,” Reiff noted. “Histori-cally, less than 25% of the borrowers we are targeting have availed them-selves of financing of any type. We’re very excited to see that number grow as the rental finance market continues to expand.”

Reiff also pointed out that FirstKey offers products to accommodate a number of different types of inves-tors. “There’s been a lot of focus recently on the very large investors in the one- to four-family residential rental properties, but it’s important to remember that the largest segment of this market is represented by the more entrepreneurial owners who may own as few as 10 properties or less,” Reiff said. “These owners typically have strong ties to their communities and are looking to grow their portfolios in a disciplined fashion over time. We’re here to make sure that these local investors have the opportunity to grow and develop their investments.”

FirstKey couldn’t have had better timing in coming to market with a lineup of new mortgage loan products aimed at the small and middle market.

Looking to fill the void in afford-able investment housing financing, FirstKey has provided the fuel for real estate investors to make it happen.

In addition to the successful launch of the Express loan product, FirstKey continues to be the market leader in Conventional loan products geared towards larger investors as well.

What’s more, CEO Randy Reiff shared an exciting new loan pro-gram being rolled out for small- and medium-size investors in an exclusive interview with Realty411 magazine.

Continued on pg. 21

July 18-20, you’re invited to a life-changing event: the Millionaire Maker. It will take place only once, will be followed by 60 days of mentoring, and I guarantee it will break the “box” in which you’re living.

What does “try” mean to a world record breaker? Millionaire Maker dares you to look in the mirror and realize you have more inside than you know. On Friday night, together we’ll watch a very special documentary about the inspiring story of world-recorder holder, Diana Nyad. At the age of 61, what motivated her to be the first person ever to swim from Cuba to Florida in shark infested waters? You’ll find out first hand when she joins us live on Saturday, challenging you to rethink what “try” in your life really means.

How do you break out of the “box”? I’ve hand-selected over 15 guest speakers and panelists to join us. Prepare to be motivated as we explore first-hand how these successful real estate investors and business pros realized their untapped potential. Then, challenge yourself to discover your personal formula to take that same rigid discipline you have in your best areas of accomplishment and use it to improve every other area of your life.

60 days of Mastermind Mentoring? That’s right. After the live event, you’ll join me and one of our speakers weekly for Mastermind Fridays. For 60 days, we’ll explore additional reading materials to keep you motivated and committed to the goals you set. We’ll also keep you updated on personal goals we speakers have set for ourselves. We’re all just one habit away from living a very different life. We’ll be doing this together.

Millionaire Maker asks you to commit 60 days to attain the next level in whatever is important to you now! Is it about realizing financial success via real estate investing? Yes! Will it be about learning a step-by-step process to attaining your specific personal goals? Yes! Is it about learning that the “box” you’ve chosen to confine your life to can be replaced by iron will and new-found skills? Yes! Please don’t hesitate, commit right now to attend. There is limited seating due to the nature of the mentoring piece after the live event. Change the trajectory of your life by joining us in July for this one-time-only event!

Sincerely,

P.S. I so strongly believe in this event I’m offering a money back guarantee. If after the first full day you’re unhappy, hand in your manual and I’ll refund admission. In addition, use The Norris Group as your hard money lender on a Socal deal within two years after the event and I’ll rebate the cost of the event 0.5% per loan until you get it back in full. See the web site for full rebate details and to register before we sell out. See you July 18th!

Also FeAturING:Danica Patton, Jennifer Shenbaum, Andrea Esplin, Holly McKhann, Rick Solis, Doug Van Soest, Steve Landis, Bill Tan, Silvio Brigliadoro, Iris Veneracion, Jack Fullerton, Ward Hanigan, and Randy Grigg.

DAte & loCAtIoN:Friday, July 18 – sunday, July 20Westin South Coast Plaza Costa Mesa, CA

reGIster At:www.thenorrisgroup.com/millionaireor call (951) 780-5856

$1,797 until 6/16$2,297 after

Event includes Friday evening movie snacks; breakfast, snacks, and lunch Saturday and Sunday; all seminar materials during live event; web portal access with additional content and recordings from live session. Mentoring books materials will be responsibility of attendees so each can choose preferred format.

Bruce Norris

Ben Gay III

tony AlvarezMike Cantu

Diana NyadAuthor & World Record Holder

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FOUNDERLinda Pliagas

[email protected] STAFF

Hannah AshLori Peebles

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Passive Income for Today & Tomorrow

Ca$hFlowEXPRESS

Yes! You can be rich from owning real

estate and trading stocks. We’ve all heard the story of the

little old lady who lived modestly and worked as a school teach-er for 40 years. She never earned more than $35,000 per year, owned a modest home, and shared her life with two cats. Once she died, her rela-tives discovered a $150,000 life insurance policy and $1.5 million in stocks that she left to the elementary school’s scholarship fund.

The national media loves to air these stories. It seems there are several old ladies who fit this seemly unique profile year after year. How could that be?

Investing in stocks is not the world’s most challenging task. In fact, at its core, it’s very simple. The truth is that the stock market creates millionaires every year. Investing in stocks, with wealth in mind, is easier than you think.

Invest In What You Know

Wanna be a good stock market in-vestor? Keep it simple and start with

companies and products with which you are familiar.

If you’ve ever opened a can of Coca Cola on a hot summer day and felt refreshed and invigorated, why not own the stock? It’s a product you know with a story you understand. When I say “a story you understand,” I mean to say that you understand

how the Coca Cola Corporation makes money, or to ex-press it in Wall Street terms, you understand how the company earns revenue. The more bottles and cans of Coke that Coca Cola sells around the world each day, the larger the com-pany’s profit. Over

the past ten years Coke stock (symbol KO) has risen from around $40 per share to a high of $71 — $1000 in-vested in Coca Cola stock ten years ago would be worth $4,100 today; $10,000 invested in Coca Cola stock would be worth $41,000 today.

If you spend more than $100 per year eating fast food, why not own the stock? Over the past ten years McDonalds stock (symbol MCD) has risen from a low of $15 per share to a high of $95 per share.

By Doug CarverOrganizer Pasadena and Burbank Cashflow Meetup Groups

I can remember my first time play-ing Robert Kiyosaki’s Cashflow board game about eight years ago and how it started a chain

of events that continues to this day. What stuck with me most was not the “how to” of playing the game but the people that I met at the event. These were not like the normal people in my life that would tell me I was crazy for trying to start my own real estate business or that financial freedom was impossible without a steady well-paying job. The people I met were excited about learn-ing and expanding their knowledge on how to achieve financial freedom. They were active investors in real estate and the stock market. They were small busi-ness owners with a passion and vision for creating more financial success in their lives. Overall, they had a mindset for prosperity that I like to call a “Cash-flow” mindset.

A lot of people complain that Kiyosaki does not provide the specific details on how people should implement his strat-egies to create financial freedom in his books and programs. Truth is he never spells out a step-by-step “how to” for building long-term financial freedom. What he does teach is far more impor-tant, and that is how to create a “Cash-flow” mindset. Kiyosaki describes it in his book Cashflow Quadrant moving your mindset from the E (employee) and S (self-employed) side of his Cashflow quadrant to the B (business owner) and I (investor) side of the quadrant. In lay-man’s terms, it’s the mental shift from someone who seeks financial security at all costs to someone who can confidently and knowledgeably take measured risks. This is a simplistic definition but a very important one to understand. Without the correct mindset, it really doesn’t matter how much you learn the “how to” of real

estate investing, trading stocks, building a strong MLM business, etc. You will not succeed. It’s like trying to grow corn in a field of sand. The seeds will not germi-nate and you’ll end up with next to noth-ing to harvest in the fall.

How, you ask, does this relate to the Cashflow game? Well, after playing the game a bunch of times, I learned the “how to” of getting out of the rat race, but I still was not able to take what I learned from the game and apply it to my real-life financial situ-ation. However, I

realized that the time I was spending with my new Cashflow friends was changing the way I thought about money and my financial future. I no longer viewed the stock market as a giant rigged system for losing money. I began to see the tremen-dous opportunities in the sinking real es-tate market even as many people I knew were losing money on deals that had gone bad. Overall, I saw for the first time op-portunities all around me to create wealth even as the newspapers talked constantly of the “Great Recession.”

Today as a result of my ongoing in-volvement playing and organizing local Cashflow events in Southern California, I have a thriving real estate investing business. It was after speaking with one of my Cashflow friends who was a real estate investor that I was encouraged to start wholesaling distressed properties. It turned out to be a great decision. More recently, I’ve begun to learn how to suc-cessfully trade in the stock market using options. As a self-proclaimed real estate “zealot”, I never would have dreamed of investing in the equity markets. Howev-er, after playing Cashflow 202 with my Cashflow friend ,who is an active trader, and learning about his trading system, I was able to see the opportunity before me. I now fully expect that investing in the markets will be a huge part of my fu-ture financial success in addition to my

Learn How to Create Stock Market Wealth Today

Investors Manifest a “Cashflow” Mindset

FREENo. 1 / Vol. 1 2012

Personal Finance News from the Publishers of Realty411 Magazine - www.Realty411Guide.com

Continued on pg. 2Continued on pg. 12

By Tyrone JacksonTheWealthyInvestor.net

Doug Carver (left) and Chris Hanson dis-play the Cashflow game to group members.

Contents - Spring 20141 FirstKey Lending Offers Options

4 Publisher’s Welcome Note

5 The Millionaire Maker Returns

6 Management Tips by Texas Pam

7 Out of State Investment Advice

9 Rehab with Andrew Cordle

10 Q-n-A with Zinc Financial

12 & 18 Attract Private Lenders

13 Investing in Texas Land

15 The Investment Lab is Open

16 Incorporate a Business

21 & 23 Cashfl ow Resources

24 Scenes from Our Expos

26 How to Avoid Capital Gains

From the Publishers of Realty411 Magazine

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PRIVATE MONEY LOANS

WelcomeThanks for joining us once again for a new CashFlow Express...

If you are reading this issue then most likely you have attended one of our live events. When I fi rst began to host real estate gatherings back in 2008, we attracted a handful of people in Los Angeles

who were interested in learning and talking about real estate. Some people already had experience and we shared ideas and tips, some guests were new-comers who came to observe and absorb.

My guests and I would often meet at the Marina del Rey library right on the water at the quaint coastal city in California. It was the perfect place, as the library’s benefactor Lloyd Taber was a wealthy real estate mogul who bequeathed millions to the building’s renovation years ago.

Next, we started hosting larger educational gatherings at the Veteran’s Hall in Culver City. Fast forward to the present and our company, Realty411, has hosted events in San Diego, Indianapolis, Los Angeles, San Jose, Scottsdale, Pismo Beach, Seattle, Atlanta and even New York City. It’s a dream come true, and we plan on hosting many more expos and mixers around the nation, including upcoming events in Florida, Missouri, Ohio, and Texas.

Our largest expo has attracted up to 300 people and our smaller events regularly unite an exclusive group of veteran real estate leaders. We plan on expanding our events even further. My goals are lofty: I envision some day hosting international real estate conferences — this is precisely how much I enjoy and believe in the power of networking.

It is a pleasure and privilege to meet the readers of our numerous publica-tions. We produce our quarterly glossy Realty411 magazine, with Real Estate Wealth as an alternate cover. We have separate distribution and websites for each. The 100-page glossy is available at no charge at selected grocery stores, and will soon be available in bookstores across the country.

Next, we have our REI Wealth Monthly, a digital and interactive issue spe-cifi cally designed for online enjoyment. It was created for the Apple News-stand by Noland Araracap, a San Diego-based technology enthusiast. Next, of course, is our newspaper Cashfl ow Express, which is directly distributed at our live expos and mixers, and at selected real estate events that we support and sponsor around the country.

For the rest of the year, in addition to expanding our calendar of live ex-pos, we will continue to expand our media and marketing company with spe-cial print supplements and new online websites. We just completed our fi rst Private Money 411 Special Supplement and are starting the second! It is our mission to be an all-encompassing resource of information for investors. In closing, I’d like to add that if we can assist you in any way, or if you have any feedback on our publications or events, please let me know. Your suggestions and comments are always welcomed.LindaPliagas

Contact us: 310.499.9545 or [email protected] Social and Receive Regular Updates from Me on:

Facebook, Twitter, LinkedIn, Pinterest, Google+

DisClosuRe anD infoRMation foR ReaDeRs anD eXPo guests The publications, events, expos and mixers promoted by Realty411guide.com and/or their owners, employees agents and affiliates (collectively “411”) are for in-formational and entertainment purposes ONLY. The information and presentations provided therein do not constitute an offer or solicitation to buy or sell securities or real estate. Please be aware that real estate investing is VERY RISKY. 411 is not responsible for any of the information provided and/or statistical data presented, and do not reflect the opinions, advice or research of 411. You personally are 100% responsible for your due diligence, for all investment information and for all deci-sions with respect to any potential investment or transaction. 411 strongly recom-mends that you seek the advice of your trusted attorney, broker, CPA and/or finan-cial adviser before investing. Thank you.

CashFlow Express •

CashFlow Express is published in Santa Barbara County by Realty411. © Copyright 2013. All Rights Reserved. Reproduction without permission is strictly prohibited. The opinions expressed by writers and columnists are not endorsed by the publishers and/or editorial staff. Before investing in real estate, stocks, bonds, mutual funds, gold, or securities, seek the advisement of a trusted fi nancial advisor, attorney or tax consultant. Investing in any asset and market sector is risky business and may result in the loss of capital. Please invest responsibly. PRINTED IN THE USA ~ GOD BLESS AMERICA

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was my goal nine years earlier, make a $1,000 a year for every year I was old. What a big “box” I now lived in!

Then one day, the bar was raised yet again. In one 3-hour meeting, Jim Rohn embedded a new concept into my brain; millionaire. He challenged the audience to stop kidding themselves about the level of their commitment to their dreams. As I listened to him, I felt he had made some discoveries that had changed his life and once again, my life’s trajectory changed in one day.

I arrived home that night and I wrote a series of audacious goals. When reached, these goals would allow me to live in a “box” I had never dreamed possible. Imagine having a choice of what to do with my day, whatever I wished! Imagine having enough money or cashflow so that I never had to work, but did so anyway because I love what I do!

Until that night, I had never dreamed of a “box” that big.

Is it possible to change your life in a day? Yes, I truly believe that’s how it works. You don’t get a black belt in ka-rate in a day, but there comes a moment when you commit to do whatever is necessary to reach your goal someday. It is in that moment of commitment that the course of your life changes.

In July, I’m so pleased to bring an event back that we haven’t produced since 2006. Decide right now to attend. The experience will change your life by expanding the “box” you are living in, I guarantee it. At every Millionaire Maker, we invite a special guest speaker. In 2005, our guest

speaker was Jim Rohn. In 2006, it was Rudy Rut-tiger (Notre Dame Football fame and inspiration for the movie Rudy). This year, I’m thrilled to announce, we’ll host one of our most motivational speakers ever, without a doubt!

On the first night, we will watch world record holder Diana Nyad’s documentary together. I’ve watched it three times and cry every time. I’m humbled by the effort she made attempting to do what no human before had ever done. Watching this documentary will challenge you to ask your-self this question: “Have I really ever tried my absolute hardest at anything?”

Every speaker has been hand-picked for this event, and every speaker or panel participant has escaped the “box” they were assigned to and now live life on their own terms. That’s what this weekend will be about. You will leave with the desire to break free from previous notions of what

The Millionaire Maker Returns

life should be, and replace it with new goals and dreams for you and your family.

Featured speakers include Diana Nyad, Tony Alverez, Mike Cantu, and Ben Gay III. I will personally moderate panels that will include Danica Patton, Jennifer Shenbaum, Andrea Esplin, Holly McKhann, Iris Venera-cion, Rick Solis, Doug Van Soest, Steve Lan-dis, Silvio Brigliadoro, Jack Fullerton, Ward Hanigan, Randy Grigg, and Bill Tan. From local real estate legends to up-and-coming rock stars in our industry, the content will be unlike any event you’ve attended before.

60 Day MentoRingMillionaire Maker includes 8 weeks of fol-low up mentoring. After the live event, once a week I’ll be joined on a webinar by one of our guest speakers where we’ll dig into as-signed readings to keep you motivated, share additional insights, take your live questions, and we’ll even share our progress on some goals we’ll be making during the live event.

it’s all aBout the “Who”Millionaire Maker is not about the "When to invest" or "How to invest" that most are used to The Norris Group producing. Millionaire Maker addresses the "Who in You" that you bring to real estate and life. Business profes-sionals, real estate investors, and entrepre-neurs of all experience levels are welcome and encouraged to attend. I truly hope to see you there. For more information, please visit:http://thenorrisgroup.com/millionaire

by Bruce Norris

Our first speaker for our first Mil-lionaire Maker since 2006 wet his bed until eighth grade. During high school he attempted to go out for baseball but quit before he ever

got to the baseball field. During the first three years of his work career he was fired five times. Somewhere during that time frame he was on food stamps. His wife went without a car for the first seven years of their marriage.

Our co-speaker, on the other hand, is a multi-millionaire. He has bought, sold and funded purchases on over 3,000 properties. He correctly predicted both the boom and bust cycles in Cali-fornia. His company has won national awards and he is trusted with millions of dollars of other people’s money. He was invited to address Fan-nie Mae and FHA in Washington D.C. He has earned a reputation as an honest and successful business owner. And at an age when most men look forward to retiring, he became a black belt in karate.

What you may not realize is that these two very different men I have just described are one and the same person. Me! What changed an eighth grade bed wetter afraid to step up to the plate into a man that thousands trust for advice?

I’ll tell you this; it’s something you have ac-cess to.

The first version of me had a very limiting self-image and very low expectations. I had placed my life in a very small “box.” The “box” I had assigned to my life was that of a person who would barely scrape by; an average guy who would certainly never accomplish anything amaz-ing.

What changed me from a man barely able to feed his family into a millionaire?

It started with my first mentor at age 20; a hardware store manager. While I was working for him making $2.00 an hour, he was making $100,000 a year working the same amount of hours! One day he chewed me out for using such a small portion of my talents and trying so little on behalf of my family. That pissed me off! I decided to work hard just to show him he was wrong. He laid a challenge before me to become more than I was. When I accepted that challenge, it immediately changed the trajectory of my life. His influence gave my life a bigger “box” to operate in.

Nine years later, I was pretty happy with my-self. I lived in a new 1,400 square foot house. I had a steady job as a salesperson and was mak-ing nearly $1,000 for every year old I was. That

What changed me from a man barely What changed me from a man barely What changed me from a man barely able to feed his family into a millionaire?able to feed his family into a millionaire?able to feed his family into a millionaire?able to feed his family into a millionaire?able to feed his family into a millionaire?able to feed his family into a millionaire?


Some airlines offer amenities such as gour-met snacks, personal televisions, warm face towels and ergonomic seating while some charge by the soda (and you’re lucky if they

have your favorite kind). When it comes to property managers, some inspect your property each month and send you full reports - others simply collect rents. Pam Blanco, much like the select airlines of-fering top-notch service, treats her clients as though they are an invaluable part of her business (because they are). A successful investor herself, Pam takes a different approach to property management - and has an inside perspective on what investors should look for and receive when it comes to choosing a great property management company to safeguard their investments. Investors who work with Pam, and most do so based on word-of-mouth, invest with greater peace of mind knowing that Pam’s team is on the case. Need-less to say, repeat customers are kind of her thing. I caught up with her in the middle of a workday - she was driving, not surprisingly, between properties in her home state of Texas. Pam was happy to share some rules investors should adhere to in choosing and working with a property manager or manage-ment team to safeguard investments for the future.

Your Property Manager impacts your net WorthAs you know, the value of your property is not just affected by changing market rates and neighborhood gentrification: the value of your property has much to do with the tenants to whom you rent and with how well the physical property is maintained. A less experienced or negligent property manager can cost you thousands of dollars and lots of headaches while an ace property management team tackles the hurdles of investing (from leaky pipes to credit checks) so you don’t have to.

your Property Manager grows your Portfolio Part of property management, Pam says, is knowing the local market inside and out. Her research team, for example, is always on the hunt for great proper-ties in desirable neighborhoods that promise low

Does Your Property Manager Impact YOUR Net Worth? Tips from Pam Blanco from Pamtexas.com

Continued on pg. 17

by Hannah Ash

by Teresa R. Martin, ESQ.

Buying real estate rarely goes smoothly, and buying property out-of-state has even more potential challenges. However, it’s entirely manageable if the potential trouble areas are planned for and ad-dressed. Many people own property out-of-state, and you can too.

Reasons foR Buying out-of-state Real estate

There are several reasons why you might consider owning a property in another state. Maybe local real estate prices are simply too high to qualify for a loan on a second home or investment property. Perhaps another area of the country is experiencing a real estate boom. Maybe you have a desire to own a vacation home.

Potential Challenges

Lack of knowledge about the area and the local economic situation. Every-one knows what areas of their hometown are doing well and which areas are struggling. Successful real estate investors usually know more about the area of town in which they invest than the REALTORS® do. You won’t have this type of day-to-day knowledge and will have to rely on others for their advice and opinions. Ensure you’re getting your advice from a worthy source.

You don’t know the laws, regulations, property taxes, and other details. Real estate laws and practices vary from state to state and even from city to

city. Even more challenging, what is written in the codes and ordinances might not be the actual practice. You’re going to have to find a way to gain this knowledge.

You need an out-of-state team. You’re likely to need a property manager, handyman, real estate agent, and more. Your team will have a huge impact on the level of success you experience. Build your team before you buy anything.

Everything is going to cost more. For a non-occupant owner, interest rates, down payment, and insurance are all higher. The banks simply don’t have as much faith in a property owner that doesn’t live in the property.

things you Must Do

Hire an excellent property manager. If you’re going to rent out your property, keep in mind that an investment rental property is only as good as its manage-ment. It’s important to find someone that you can trust even when you aren’t there. Property management includes making decisions about repairs, filling vacancies, evictions, and handling any other problems.

See the property before you buy it. While very experienced investors fre-quently don’t, it’s still a good idea to see the property before you buy it. Until you have a team you can trust, you don’t really know what you’re getting until you see it yourself.

Visit the area. If at all possible, get out to the area and arm yourself with a local map. Spend a couple of days driving around, getting the lay of the

land, and asking a lot of questions. Meet a couple of real estate agents and landowners. Join the local real estate investors club. Even if you’re buying a vacation home, these are the people that know the area, trends, and relevant people. One good friend in the local club is invaluable. Join and make a friend.

Owning property out-of-state can be a wonderful investment from ei-ther a financial or enjoyment stand-point.

As with anything else, if you understand the potential challenges beforehand and prepare for them, you’re likelihood of success is much greater. Be sure to get your team in place and know as much about the area as you possibly can. Good luck!

Financial coach, Teresa R. Martin, Esquire, also known as the “Wealth Building Maven,” has been finan-cially independent since the age of 35. She is the founder of the Real Estate Investors Association of NYC (REIA NYC). An active investor since the age of 18, she can be contacted by phone at (646) 467-7370, by

From NYC & BeyondHow to Invest in Out-of-State Real Estate


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by Hannah Ash

I t’s tempting to think of millennial Andrew Cordle as something of a comeback kid - but that’s only one part of the story. I caught Andrew in the middle of what was for him, a normal work week. We talked from his front porch at home in Georgia: He’d just flown in from a speaking engagement in

Colorado and was preparing to fly out to Chicago the next day. Though his story does involve losing it all followed by winning it back and then some, it’s also about dedication, work ethic and a commit-ment to success.

Recently back from a twelve day cruise through French Polynesia with his new wife, Andrew is a self made man. He comes from a middle-class background: his mother is a school teacher with over 23 years of teaching experience and his fa-ther is a union worker. Andrew shared with me that when you look at the stories of the most success-ful and wealthy families, it’s always one person in that family that “goes outside the norm and changes things for generations to come.” The week before we chatted, Andrew had dinner with the vice presi-dent of one of the world’s leading retailers, Home Depot. Clearly, Andrew wants to be that person to permanently alter the course of his family’s future.

Before we go into what he’s up to now, let’s take a step back. I mentioned Andrew lost it all. Like many of us, he was a victim of the economy. During his first round at bat, Andrew was exclu-sively a flipper. He was 25 years old, had a staff of over 20 and a small fortune to his name when the bottom of the market fell out in 2007. Andrew found himself with a lot of houses he couldn’t liq-uidate. It changed his life. It changed his approach to investing.

“It does no good to have 20 cars in your garage if you don’t have any gas for them,” Andrew re-flected. The problem in 2007 was that Andrew had put all of his eggs in one basket: flipping. Like so many millennials facing a lean economy, Andrew ended up living in his parents’ basement. Unlike so many in his generation, Andrew did not stay there for long. Through the power of education, he trans-formed himself into a success again. This time, his success is different. He took the lessons he’d learned from his previous successes (and failures) to build a sustainable career as an investor that now takes him around the country and the world to share his wisdom with others.

What was, and is, Andrew’s secret weapon for success? What is his vehicle for being that person in his family who steps outside of the norm and creates lasting success? Education. As the son of a dedicated school teacher, it’s not surprising. “Edu-cation can save you hundreds of thousands of dol-

lars and time. One caveat though: the right education,” Andrew tells me.

Andrew’s approach makes sense. “If you want to be a doctor, don’t get a degree in event planning,” the successful investor de-clares. Though his approach to education is simple, it’s refreshing. With so many real es-tate gurus selling a one-size-fits-all-approach to success in investing, Andrew does not. He offers specialized academies that focus on the strengths and interests investors have coming into the game.

He offers a four-day course for investors to learn about his approach to investing - and to the different techniques available for suc-cess. “There’s a wide variety of tactics to be successful in investing. You need to choose your tactic and go for it,” Andrew says. His four day workshop helps investors to bring a great sense of focus to their efforts.

When it comes to finding education as an investor, Andrew takes a firm stance. “Many real estate gurus are teaching techniques they learned fifteen years ago. That doesn’t work. As markets change, tactics change.” For his part, Andrew participated in over 100 deals in the last twelve months; over the course of his career, he’s participated in over 1,000. His investor academies aren’t taught by guest gu-rus who want to sell their products; Andrew personally teaches them with the help of his wife and staff.

To be successful as an investor, Andrew says that investors first need to decide what they want to achieve. Some people want boats, some people want to quit their day jobs, some people want to establish trusts. As an investor, Andrew says, you must know what you want to achieve. Once you know what you want, you can then pick a tactic that will best help you accomplish your goals. Differ-ent types of investors want different tactics. In addition to Andrew’s four-day Investing Academy, he offers four highly focused pro-grams: Marketing, Rehabbing, Flipping and Rental. His marketing academy is geared to-ward creative types who want to find creative ways to net deals. Attendees leave with real world industry marketing know-how, blogs that are set up for them and turnkey social media accounts.

The Flipping Academy is for inves-tors who love the art of the deal or need to strengthen their cashflow before branching out into other tactics.

Rehabbing is geared toward those inves-tors who want to turn up the volume by doing more deals and treat investing as more of a

Profi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tProfi tbusiness than an individual skill. The Rental Academy, Andrew says, is for all investors. “No strings attached cash-flow is the goal for all investors, regardless of your tactic.” Rental properties do just that Aside from edu-cating others, creating true cashflow is Andrew’s great-est motivation as an investor. Aside from resilience and determination, that “cash-flow is king” was the greatest lesson Andrew learned from the economic downturn.

One of the top skills that Andrew Cordle advo-cates investors have? Aside from focusing and choos-ing a tactic, it’s knowing your market. Andrew shared with me how just last week he closed on a Victorian in Atlanta. The wholesaler from whom he purchased the property didn’t know that the Victorian was located in a top-choice district for a new charter school, making the property a significantly more lucrative buy. Andrew said that just by knowing his market, he stands to make many thousands of dollars off the deal. “There’s no get-rich-quick way to make it in investing,” Andrew says. Educa-tion. Strategy. Tactics. The ability to bounce back. An-drew says real estate investing is unique, and investors must be too, “Investing is not a 9 to 5. Work hard. Play hard. Be determined. Be resilient. Make a decision.”

‘No strings attached cash-flow is the goal for all investors, regardless of your tactic.’

A N D R E W C O R D L E . C O M

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by Lori Peebles

Funding is the foundation for every real estate transaction. As an investor, private lender and CEO of Zinc Financial, Todd

Pigott knows exactly just how important fund-ing is. The Central California-based firm lends on deals throughout the Golden State as well as neighboring Arizona and Nevada. To give our readers insight on the private money industry, we recently interviewed Pigott so he could give us his perspective.

Question: Hello, Todd, can you tell us about a recent deal you lent on? ZINC: Recently, we funded two rental buy & hold properties in the Sacramento region. Both were 3 bed / 2 bath, in solid urban settings. They were constructed in the late ‘80s early ‘90s, with about 1500 square feet of living space. Each was move- in ready with rental quality amenities. The inves-tor purchased them for $147,500 and $169,500 respectively; rental income was solid with a DCR ratio above 1.25. The real estate investor put down approximately 22% against the purchase price. ZINC funded both of these in less than 30 days with a 7.99% 5-year term. The real estate investor expects to make between $10,000 to $15,000 per year in net cash flow. Question: What are some of your favorite ar-eas to lend on and why? ZINC: We just funded another great fix-and-flip in the San Rafael area, up in Northern Califor-

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nia. A very dated property built in the late ‘60s, with virtually no updating since. The ARV for the SFR came in at $1,100,000, and the borrower purchased the property for $750,000, and put down 20%. The borrower expects to spend about $70,000 on rehab for which ZINC is paying 70% of the cost. The investor expects to have the work completed in less than 6 weeks, and have it sold in less than 60 days. ZINC funded this transaction with complete ease and in less than 10 days. Question: Can you tell us a bit about Zinc Financial and what type of transactions you prefer to lend on? ZINC: We are a California lender. We focus on fix-and-flip loans and rental quality buy-and-hold loans. We lend on primarily SFR 1-4 units, but will consider multifamily on a case by case basis. We lend in any area of the state, so long as the property is in a well-known urban setting. We call it our “curbs and gutters” criteria, meaning if it has curbs and gutters there is a high degree of certainty we will lend on it. We stay away from land, cabins, extreme rural properties or prop-erties in highly undesirable areas. We are very aggressive on our rates with our California Inves-tors, and we are able to close our loans in 7-10 days because we are a direct lender with our own capital; we are not a broker. Question: In your opinion, how is the Califor-nia market doing? ZINC: It is a great time to purchase and fix-and-

flip in California. Property values have stabilized, inventory is low creating a favorable resale for your finished product. Most of our real estate in-vestors are reporting record profits of between $40,000 to $100,000 per fix and flip. What’s criti-cal is buying the right property in the right loca-tion. ZINC prefers lending on properties below

Continued on pg.,19


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As someone who has attracted hundreds of private lenders to my real estate and lending practice since the real estate crash, I learned that one of the keys to finding private lenders is to always

make it about them, and not you. Most people pro-mote themselves. Promotion is about you. Attraction, on the other hand, is when you make your pitch about the other person. Key to forming a successful business relationship is a sincere focus on what is in the best interest of your prospective partner. This is especially true in attracting private money. When you demon-strate that you have the best interest of your prospec-tive money partner at heart, and that your sincere goal is to help your prospective private lender make a great return on their money without taking unnecessary risk, you become extremely attractive. By focusing on the needs, goals and concerns of your prospective money partner you will create a loyal client for life, and one who will refer you to others who might also benefit from your good work.

There are five basic questions that every prospec-tive private lender is going to want to know. Your pre-sentation—your credibility and opportunity package—should clearly answer all five of these with clarity and completeness. Here they are:

1. What is the opportunity? 2. How much money do you need? 3. How much can I make? 4. When do I get my money back? 5. What happens if you get hit by a bus?

1. What is the oPPoRtunity?

“I’m in contract to purchase a 3-bedroom, 2-bath sin-gle-family home in a popular middle-class neighbor-hood. The property hasn’t been remodeled in years, and we’re getting it at a great discount. Well remodeled homes in this neighborhood are selling on average for $300 per square foot, and the average days-on-market is less than 30 days.” That is an example of a well-articulated and simple description of an opportunity that could be delivered like a 30-second elevator pitch at a networking event attended by people with money. It’s short and to the point, and it demonstrates your knowledge of the mar-ket. But answering this question in the mind of your prospective private lender goes far beyond the specific deal. In developing your answer to this first question, your lender is going to want to know things such as:

Who are you?What is your background?What is your real estate experience?Can I see examples of your previous work?How well did it go before? Providing your background, history and experience lays the foundation of your credibility, and answers the silent question, “Why should I listen to you?”

2. hoW MuCh Money Do you neeD?

Answering this question involves your detailed budget for the opportunity. You also might present more than one scenario for how your prospective money partner can be involved. There are many ways to structure the way they might participate. Is it a loan? Is it an equity investment? Will you be using other capital in addi-tion to your private lender? Are you putting some of your own money in? Will you be using leverage (hard money)? While you don’t want to over-complicate or overwhelm a prospective lender with too many choices, understanding that there are many ways to structure a deal will help you to adjust your parameters based on a specific lenders’ preferences and comfort level.

3. hoW MuCh Can i MaKe? How much you offer to pay your private lender will normally depend on a number of variables, including whether you offer collateral in the form of a mortgage or deed of trust on the subject property or if you offer an equity membership in an LLC formed to acquire the property. Will you be offering payment in the form of a loan (interest) or will you be sharing the profit (or both)? If you are sharing the profit, what is the split?

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In answering this question completely, you should in-clude both a best case and worst case scenario.

4. When Do i get My Money BaCK?

If you are planning to buy, fix and flip a property, then your exit strategy – how you will repay your private lender – is fairly straightforward. You will pay him back at close of escrow when the property is sold. What if you want to propose that your partner invests in more than one project at a time, or re-invest his profits from one project into another? What if your plan is to acquire rental property to hold long term?

Part of your budget should include a timetable that, like above, has a best case and worst case scenario. Showing that you have considered that the unexpected might happen makes you look more professional. Also, keep in mind that it’s always better to under-promise and over-deliver and the other way around.

5. What haPPens if you get hit By a Bus?

While you want to have a plan in place in the event that you do in fact get hit by a bus, the bigger point of this question is to address the concern about what happens if things go wrong. What are the risks? What safety and security features have you built in to your business model? What protections are you proposing to prevent or to reduce the prospect of a loss to your investors’ principal? This is the area that many real estate investors either skip or downplay. Addressing up front these issues actually makes you look professional and shows that you have considered all possibilities and have planned for them. Optimism is important, but appearing to have blind optimism can work against your goals. These five basic questions present a foundation of an effective presentation that will weave together your story, the opportunity, and your promise in a way that impresses, creates confidence and that will attract capi-tal to you in a big way.

Mark Hanf is president of Pacific Private Money Inc., a California-based hard-money lender who has raised over $150 million in private capital since 2009. His eBook, “Insider’s Guide to Attracting Private Money”, is available at www.AttractingPrivateMoney.com.

Attract Private Funds for Dealsthe 5 inVestoR Questions


by Mark Hanf


Texas Land Is Ideal For Investment Purposes or Simply Building Your Dream Cabin or RV Site

possibilities are endless: any-thing from tent camping to set-ting up an RV site to building the cabin of your dreams can be easily accomplished, and at a fraction of the cost of doing so anywhere else. What could be more satisfying than having

a log cabin built to your exact specifications, on a piece of property straight out of a classic Western movie? In Texas, this isn’t just a daydream, it’s a way of life. Buying and developing land in Texas can mean returning to a simpler way of life, a laid-back lifestyle far removed from the modern rat race, but it can also be a great investment in of itself. Locations this gorgeous and affordable never last very long, and picking up a plot before they are all gone is about as sensible an invest-ment as you can make – there is a good reason professional real estate speculators love Texas land, and try to snap it up as soon as it becomes available. For anyone looking to buy property, there is obviously no better choice than a plot of prime Texas real estate, and if you want prime Texas real estate, there is no better choice than Blue Quail, offered exclusively by Texas Ranch Deals. The Blue Quail location is only 30 minutes from Interstate 10 and is very close to schools, food, fuel, a post office, and anything else you might want. Whether you’re interested in a simple piece of investment land or if you want to build that log cabin you’ve always wanted, Blue Quail is the perfect choice. Property taxes in Blue Quail are an unbelievably affordable $100.00 per year on each 20-acres plot. Call 1-800-843-7537 or visit online at: www.TexasLandBuys.com, and we’ll tell you why Blue Quail is a great place to own property in Texas.

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H ave you always dreamed about own-ing your own piece of paradise, a place where you could hike, hunt, ranch, camp, horseback ride, or just relax to your heart’s content in the

middle of beautiful, isolated scenery? Or are you interested in making a sound, safe, and affordable real estate investment in a prime location? What about both at the same time, in a place where the folks are friendly and the landscape is postcard perfect? Property in Texas offers all of this at once, and so much more. Texas is the perfect getaway location, with something for everyone. The wide-open countryside offers dramatic views the likes of which you cannot find anywhere else, with stunning landscapes and a sky so big and blue you have to see it to believe it. Loca-tions this scenic and pristine are usually only found in state and national parks, but here in Texas you have the chance of a lifetime to actually own a part of the panorama.

F or the outdoorsman, owning land in Texas offers a rare oppor-tunity to go hiking or riding on your own

private property, and if you are a hunter or nature watcher, then get ready for a range of excit-ing game: deer, elk, wild sheep and pigs, and a variety of birds call Texas home, among other wildlife. What could be better than waking up every morning with the knowledge that the game you’ve always wanted a shot at might be just outside your door? Of course, if you’d rather just sit back and enjoy the view, there’s nothing quite like a Texas sunset from the back porch of your very own cabin, or stargazing from your own private campground after a hearty meal. Considering how affordable the land is here, the

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Real estate investing, more often than not, is a solo activity. That being said, you just can’t learn it all from books and you can’t do it all without help from others. Co-workers, or people to provide support, a listening ear and

to help with some of the work, can be hard to fi nd in this industry. Without online, print and community resources, many of us investors would be on our own as we try to navigate through the industry’s some-what choppy waters. Those who are new to invest-ment often fi nd themselves with too many books and too few human interactions. Joint ventures are, therefore, common in the real estate industry and are a natural way for serious investors to fi nd co-work-ers, support and greater successes. We found two business partners who. though they live far apart, are breaking the mold; their combined experiences and investment talent bridge the dis-tance, making it possible for them to craft successful deal after successful deal. Partners Anthony Patrick and Duncan Wierman believe that when it comes to creating wealth, distance is just distance - nothing more. They each bring a different set of top skills to the investment table (or, in their case, bus), combin-ing their talents to lead others safely through a very profi table (and, on the fl ipside, very risky) world of real estate investments. Their joint education venture is the Flipping Houses Tour Bus, and it stands apart as a truly creative way to get new investors to close the books and enter the investment lab where they can really start applying some of the principles they’ve learned. When the rare opportunity to meet up with these two very busy investors popped up, I had to bite. I wanted to learn fi rst-hand about their latest venture and, of course, to get an inside look at how these tycoons land deal after deal in one of the most competitive markets in the world: Southern California. We explored their innovative approach to tak-ing investing concepts out of the books and theory and into real-world applications: Flipping Houses Bus Tours. It’s a time to close the books and hit the streets. On the tour, Anthony and Duncan are expert hosts that break down just what they do and why: their methods, their reasons, the key strategies they employ to get the impressive results they continue to yield.

THE INVESTMENT LAB: Hands-On Learning with Anthony Patrick & Duncan Wierman

FSBOs (for sale by owner) and out-of-state owned homes in which vacancies and repairs are starting to cause real hassles for owners who are likely considering a way out. Anthony also adds, “Probate is our niche.” What, exactly, do these two savvy investors do? Where do they fi sh for their amazing deals? Is it foreclosures, short sales, auctions, or what? Anthony explains, “REOs, Short Sales, FSBOs, deals on the MLS and internet leads.” What, I want to know, do Anthony and Duncan’s students walk away with after completing a training program? Are they experts in everything - or is it more of a survey course? Duncan shakes his head and explains, “This is a true, ‘hands-on and step-by-step’ experience. There is no better way to learn than having us and our power team there to ‘hold your hand’ every step of the way.” Students in Duncan and Anthony’s workshops preview deals, are introduced to projects the two have already run the numbers on, and then are taught those little tricks all of us, in any profession, know that can make or break our success. Students learn how to fi nd coveted hidden deals on the web and how to fi nd motivated seller leads with internet marketing methodolo-gies. I asked Anthony to give us a run-down and overview on

Because Anthony and Dun-can realize that action learning is longtime learning, they have you participate in the process while they watch alongside you and guide you toward a decision making strategy you can use time and time again. Anthony commented, “We are confi dent that when you leave us at the end of the workshop that you can duplicate what we taught you to do, so you can create fi nancial success in your life.” It’s an ex-clusive opportunity for investors who have been there, done there and are tired of reading the same books and listening to the same CDS over and over again; it’s for, Duncan says, those “who are ready to fi nally take action and learn “hands on” from people who do this every day.” What were the driving forces that brought Anthony and Duncan to the same literal, and metaphorical, bus? According to Anthony, “between the both of us, Duncan and I have over 25 years of experience in the art of in-vesting. From marketing, deal evaluation, rehabbing, and most of all, giving the most value and knowledge for our students.” There isn’t anything these two guys haven’t done - and well. As Duncan succinctly put it, “because of our success in this business, we have decided to join forces to teach people hands-on instead of theory.” What do Duncan and Anthony’s students learn from Duncan and Anthony? Simple strategies that yield big ROI’s. For example, Anthony says, “we look for below- market homes on the MLS because if we don’t, we could miss out on a gem – homes with opportunities to create their highest and best use. Most investors aren’t doing this simple search!” They know where to fi nd motivated sellers: they teach students to target those much coveted

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by Hannah Ash


INCORPORATING: ENTITY SELECTION

If you decide to incorporate, an important decision you’ll need to make is which entity to select for your business. Generally, your choices are

C-Corporation, S-Corporation, or LLC. Each entity has its upsides and downsides. The selection of the entity is determined based upon the business activity and the individual’s goals. An understanding of the key differences between the three typical entities should help in this decision making process.

C-Corporations are unique in that they are taxed on the corporate level. This means, if any net profit is reflected on the corporate level,

tax will be assessed based upon the taxable income. Furthermore, no self-employment tax is reflected on the corporate level. Additionally, C-Corporations can adopt a fiscal year end that allows the corporation to operate on a 12 month cycle that does not end in December, which is typi-cal for most entities. C-Corporations also have the ability to deduct medical expenses as a line-item deduction.

s-Corporations differ from C-Cor-porations in that they are consid-ered “flow-through” entities. This means, the profit or loss generated on the corporate level is passed back to the Shareholders of the corporation, based upon their percentage of owner-ship, where the profit or loss is re-flected on the shareholder’s personal tax return. Secondly, S-Corporations are exempt from self-employment tax. The caveat is, Officers of S-Corpora-

Take the Next Step in Growing Your Venture by Making It O� cial Nothing says you mean business more than the right entity structure,

it may also help to reduce income taxes & shield personal assets.

BUSINESSBUSINESSBUSINESS INC.INC.INC.tions must be “reasonably” compen-sated as employee of the company. Therefore, a W2, subject to payroll tax, must be issued from the corpora-tion to its officers to remain in com-pliance. Reasonable compensation has been established through court cases as approximately 40% of the net revenue generated by the corporation.

llCs (limited liability Company) are similar to s-Corporations in that they are “flow-through” enti-ties. Where they differ is treatment of net profit. Shareholders of LLCs that are considered general partners are subject to self-employment tax on 100% of the ordinary income gener-ated by the business. Additionally, in order to file a separate tax return as a partnership, an LLC must have 2 or more members. If this require-ment is not met, the LLC is consid-ered a disregarded entity, meaning,

its business activity would be filed on the shareholder’s personal tax return as a Schedule C, like a sole-proprietorship. That said, the single-member LLC is a glorified Schedule C, with the addition of limited liability.

When coming to the decision of which entity fits best, it is highly recommended to consult a tax pro-fessional to assist in this decision. If the proper entity is selected from the beginning, the transi-tion from sole-proprietorship is a smooth and easy one. One key component each entity has in com-mon are filing fees. California will assess a filing fee of $800 per year until the entity is dissolved. It is therefore, advisable to set up an entity when one intends to use it. This can otherwise become a very costly thing, unnecessarily.

LIMITED LIABILITY CO. LIMITED PARTNERSHIP S CORPORATION C CORPORATIONAll managers and members (owners) of a limited liability company have lim-ited liability (up to amount invested).

Decisions in a limited-liability company may be made either by the managers, members, or both, depending upon the provisions outlined in the Operating Agreement.

LLCs are not required to pay income taxes. The members must report their pro rata share of income, whether it is distributed or not. However, an LLC may elect to be taxed as a corporation.

EDITORIAL COURTESY OF:ROBERT HALL AND ASSOCIATES

Stockholders have limited li-ability; officers and directors can be held personally liable for some corporation obliga-tions.

Management decisions in an S Corporation are usu-ally made by the officers and directors of the corporation.

S Corporations are not re-quired to pay income taxes.Each shareholder must re-port their pro rata share ofincome, whether distributed or not.

Stockholders have limited li-ability; officers and directors can be held personally liable for some corporation obliga-tions.

Management decisions in a C Corporation are usually made by the officers and directors of the corporation.

C corporations must pay income taxes on any gainor profit. If money is distrib-uted in the form ofdividends, the shareholder must pay a second tax.

All managers and members (own-ers) of a limited liability company have limited liability (up to amount invested).

All management decisions involv-ing limited partnerships are made by the general partners. Limitedpartners who become engaged in management could become personally liable for partnership obligations.

Limited partnerships are not re-quired to pay income taxes. Each member must report their pro rata share of income, whether distrib-uted or not.

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vacancy rates and values poised to appreciate over time. Factors such as transportation, schools with great academics or sports (a consideration in Texas) programs, and higher than average monthly incomes are part of what Pam’s team looks for. An excellent property manager has your best interests in mind and will be able to guide you toward great buys that help you grow your portfolio over time.

your Property Manager saves you MoneyProperty managers can keep money in your wallet. Property managers are in the position to find small problems before they - literally - explode. For ex-ample, a highly-trained management team like Pam’s can drive up to a property and spot a duct issue before it backs up and causes a more expensive problem to develop. When work is needed, fantastic property managers work with fantastic vendors who do great work for great prices.

your Property Manager: your eyes & ears Texas, Pam notes, has a great market and is very land-lord friendly: as a result, she has a lot of out-of-state investors under her fold. Long-distance investors sim-ply can’t walk their properties and perform interior inspections; your property manager needs to be your eyes and ears. Pam’s team walks each property on a monthly basis and performs an exterior inspection; interior inspections are conducted twice a year.

your Property Manager Communicates Well Great property managers know how to keep their clients in the loop. Pam’s team prepares and sends clients monthly reports that include detailed finan-cials, relevant photos, market reports and expenses to keep them on top of the latest with their property or properties. “Investors deserve to know what’s going on with their investments,” Pam says.

your Property Manager Keeps your Property RentedProperty managers know how to find credit-worthy tenants - and they have a process for doing so. Be-yond finding credit-worthy tenants, property manag-ers should begin marketing an apartment as soon as they find out it will be available - not once it’s empty. Reducing vacancy rates is a key part of the job, Pam says - and her team works hard to make sure their properties are rented. Beyond ensuring a property is rented, property managers need to keep abreast of the current market changes and make recommendations for rent increases when appropriate.

An investor herself (Pam is currently working toward building her children’s trust), Pam knows what investors need and deserve from their property management team. Her company, Professional Asset Management and Sales, offers investors a full-service experience. Pam Blanco doesn’t want to put her name behind managing a property she doesn’t think is a good value - so she has a team of researchers on the case. The research arm of Professional Asset Manage-ment and Sales scouts out the best properties in neighborhoods that offer tenants the amenities they want (i.e: schools, transportation) and gives investors the stability they crave. Pam’s proactive manage-ment team walks every single property they care for every single month. A quick glimpse at her company’s website reveals a multi-channel approach to property management: PamTexas.com has everything from featured listings and utility info to online rent pay-ment processing. Systems for management are what sets a great property manager apart from a good one. Systems should be in place, Pam implies, for every-thing from finding new properties for her investors to finding new tenants. Clearly, Pam Blanco has systems in place that are blazing a new path for other property managers to follow.

Property Management Tips from PamTexas.com, pg. 6


Attracting PRIVATE MONEY

LendersJust a few short years ago, many real estate investors were unaware of private money.

More recently, private money has become fa-miliar in almost all real estate investor circles. Private lenders can be a great source of busi-ness growth. Unfortunately, there is currently a lack of good quality information about private lending, which is why I wrote a book about it.

Let’s first clarify what I refer to as private money. Private money is monies that you ac-quire from any private individual. Private mon-ey is not institutional money, hard money, or money from a lender that is in the business of lending money. Private money lenders (PMLs) are individuals that have the funds available to invest in any vehicle they see fit, and they often find that vehicle to be you and your real estate portfolio.

No matter your exit strategy - flipping, buy and rent, owner finance – private money can help you create lasting wealth. Arrangements can be structured for financing only or equity shares. Sometimes a combination of both can be beneficial. For example, let’s say your PML will loan you one million dollars to buy rental properties, but they want some equity. Perhaps you would find it favorable to pay your PML a 7% note rate and give them 50% of the equity above purchase price and make ready costs. In return, you would collect a management fee to manage the properties and also benefit from all the earned equity from principle payments as well as 50% equity above purchase price and make ready costs.

Attracting private money involves much more than telling someone that you can give him or her a certain return on a safe investment in real estate. It’s more about you and how you conduct your business, structuring what you do in a way that is inviting to others. PMLs want to do business with someone that they trust, have confidence in, believe in, and enjoy work-ing with.

You do need to be an expert in your business and your field of practice. Whether you plan to flip or buy-and-hold rentals, you need to know the questions to ask about the properties you look at. Property analysis is extremely impor-tant to PMLs, and you should have a way to analyze every deal from multiple exit strategies so that you are comparing each deal as similarly as possible. It’s up to you to know the property values in your area and understand how to pull accurate comparable sales and leased proper-ties. Know the rehab costs of projects in differ-ent price ranges and exit strategies. Understand

how to efficiently hire and work with contrac-tors. People and property management skills are important, as is keeping all that you are doing as organized as possible.

Practicing profitable habits is important to at-tracting PMLs and their money. To maintain your business acumen you should be in a constant state of education. The more you know, the better you can communicate, and the better you can com-municate, the more money you can raise. There are plenty of real estate topics to choose from on Amazon, you can go to seminars, attend inves-tor club meetings, and even view webinars from your home office. Take some time to learn about personalities and communication styles. Be the realistic optimist, plan for the worst but hope for the best.

PMLs want to work with someone that is working hard to build their business and willing to do what it takes to succeed, even when it requires a great deal of discipline or restraint. Handle your business professionally and in a timely manner. Do what you said you would do, and do it on time. You should be out beating the trees and shaking the bushes to see what pops out. By doing so you will create activity and get the attention of PMLs.

Producing income will make you attractive to PMLs though it is not a requirement. Whether you have a full-time job or income from your cur-rent real estate business, use that to your advan-tage when talking to potential PMLs. Producing income shows the stability of your business and is a testimony to your expertise. When starting out, the quickest way to produce income in your real estate investment business is to start wholesaling. Not only does this provide you with income, but it will help you to become familiar with the market and values, which all makes you more attractive to PMLs.

Targeting high-wealth PMLs will be most beneficial. High-wealth PMLs are those that you believe have the funds to invest one million dol-lars with you. The fewer PMLs you work with the easier it will be to operate your business. In your pursuit of high-wealth PMLs, you will find others with smaller sums that want to invest and you should be happy to oblige. Small sums can come in handy to use as second liens when you are financing your first lien with a bank.

No marketing is required to get all the private money you need, only networking. Start with your sphere of influence and the people you know. Tell them how great real estate is going for you and how you have individuals loaning you money and earning them 10%. Invite one PML prospect to lunch every week, and you will find private money. It may take 6-12 months, but nothing worth having comes easy. Don’t expect to get a

firm commitment but if they seem interested begin sending them properties that you plan to acquire. It is a good idea to have a presentation manual that you can show or email to prospec-tive PMLs that discusses you, your business, and how you structure your loans. Include a short video showcasing a few of your best proj-ects in different price ranges. You should also take the time to understand estate planning, tax implications, and finance. High-wealth PMLs have a good understanding of those topics as they work to preserve their estate.

Private money lenders are people from all walks of life. They are often humble and conservative, past their years of working long hours, and enjoy putting their money to work for them. PMLs working with real estate inves-tors are a rare instance where two individuals in different stages of life can help each other achieve their goals in an incredible way, bring-ing forth a profitable business and personal relationship.

by John Pribble

John started his real estate career in 1999 at the age of 19. In 2000, John got his real estate license and today is a real es-tate broker. He has practiced many differ-ent strategies in his real estate business depending on market conditions. John has experience in wholesaling, rehabbing, subject-to, owner finance, rentals, short sales, foreclosures, brokerage and cli-ent representation, property management, and working with banks and private money lenders. When his rehabbing business be-gan to grow John found it beneficial to uti-lize private money. As the market changed he shifted to more of a buy-and-hold strate-gy buying rental properties. Private money and local bank financing became a great resource as he accumulated more proper-ties. John has learned many important les-sons from working with private lenders and their funds in his business. A great deal of effort has gone into marketing, lead track-ing, management, and developing systems for a smooth and successful operation. He also works to maintain a balanced life, remaining focused on family, friends, and enjoying life through activities such as net-working with others, climbing mountains, and spiritual growth.

For more information, visit: www.johnpribble.com/about-john


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the median cost of housing for the geographical area where the property is locat-ed. With the state coming out of its worst recession and values continuing to rise, this is an absolutely great time to fix and flip your next deal with ZINC Financial. Question: Can you de-scribe a profile of who your ideal investor client is? ZINC: Most of our borrowers are entry-level or moderate-level real estate investors. Most are knowledgeable in real estate investing, and they are very well informed in the community where they live. Most have at least some exposure to real estate or construction and they all have some money to work with. ZINC requires a down payment of at least 15% so having some capital to work with is a must. ZINC typically shies away from the true nov-ice who has not done signifi-cant homework on this trade, or whose complete exposure to this segment is a weekend guru seminar on how to get rich quick. So, if you have some exposure to this field, have some working capi-tal, we at ZINC are ready to partner with you on your next fix-and-flip or rental property transaction. Question: What are your company’s goals for 2014?ZINC: Currently ZINC is con-sidered a boutique lender for fix-and-flip financing. Our goal is to provide reli-able, quick and easy funding for our investors. Reliabil-ity is key, as investors rely on this capital to fund their deal when they just placed a non-refundable deposit. Quick funding is important, because owners of dis-tressed properties will not wait months for funding, and finally, ease is important, as we do not mandate all of the strict lending guidelines re-quired by most banks. ZINC is the premier lender for fix-and-flip and rental buy -and-hold properties located in California or Arizona. We can fund loans with our own capital in less than 10 days. Our service sets us apart; we are reliable, quick and easy for our funding process. Contact us today at 559 326 2509 or visit us on the web at zincfinancial.net. Lastly mention coupon code “REALTY411” for $750.00 off your next loan, expires in 30 days.

Q & A with Zinc Financial, pg. 10 Hands-On Learning with Anthony and Duncan, pg. 15

how a typical tour with goes. He explained it’s run like a lab, chock full of real-world applications. “On our tour you can expect to learn how to set up your team, how to find and work with a REALTOR®. You will discover how to find a deal, how to find comparable proper-ties. We will explain the ARV (After Repair Value) and figure out if a property is a fix and flip or a buy and hold. We will talk about wholesaling as an exit strategy for the deals you pass on. The whole class also visits a local Home Depot store and we go over materials needed for a typical rehab. It’s a jam-packed tour because we also visit numerous houses: one under construction, one in the middle of construction, and a finished home in escrow. We also see a couple of deals that we have yet to see ourselves and go over them with our students. We teach what to look for and whether an offer should be made or not. Lastly, we wrap it all up from start to finish and go over how we can get deals accepted.” Duncan and Anthony are clearly more motivated by their love of real estate than of wanting to turn education into a big business - they keep course registration fees refreshingly low - with a three-day tour only costing only $197 for everything. As they’re usually busy making deals for their own portfolios, these workshops don’t happen

all that often. Duncan comments, “We host them only three times a year, and we do limit the number of people who can participate because we want to really give personal attention.” The results students take home of working with these two pros at the top of their game? Anthony says the proof is in the pudding. Students, they say, will be ready to do their own rehabs after the tour - or whatever else they want to try. Anthony explains, “This is a step-by-step event with a simple road map for each person who wants to learn not just rehabs but everything in real estate.” Their coaching students can use them, and their power team, for future deals if they choose to. “We want our coaching students to use our power team so they can get a deal done fast. Our track record is phenomenal, nearly 80% of students have a deal in their first 60 to 90 days!” Duncan and Anthony want to help others find some of the success they have, doing what they love. A love of the craft of investing is what motivates these two proven investors.

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Surely there will be more to come. Want to know what FirstKey can do for you? Check them out online, or, Reiff suggests, “Bring us your portfolio, and let us help evaluate your options.”

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The Equity Recovery Program works for you and not the bankers! Holding real property in your individual name provides no asset protection whatsoever and, upon selling the property, causes you to pay

the maximum amount in capital gains tax and state taxes. Plus, most real estate ‘business deductions’ are not deductible for an individual filing a 1040 tax return. Your silent partner (the Internal Revenue Service) will love being in business with you as they take 30% to 40% of your hard-earned money from the sale of your property in taxes. Sadly this is the reality for over 50% of all escrows in the United States, but it doesn’t have to be that way for you. By employing the Internal Revenue Code (IRC) Section

351-Transfer when selling your property, you can legitimately eliminate state tax and federal capital gains taxes. Our nationally recognized (and patent pending) Equity Recovery Program increases your net earnings from the sale of a property by more than 15% to 20%.

shoRt-teRM CaPital gains taXProperties held for 365 days or less are considered ‘short-term’ and are taxed at your ordinary 1040 income tax rate if the property is owned in your per-sonal name or an entity that is a pass-through entity such as an “S” Corp, LLC (filing a 1065), LP or Sole Proprietorship. Taxes are paid at the 1040 tax rate on those gains of anywhere from 10% to 39.6% for the year 2013.

This could be a real killer should your taxable gain, plus any other 1040 income, push you into the higher tax brackets.

long-teRM CaPital gains taXThe following tax levels are known as ‘long-term’ capital gains and apply to property that you hold for more than 365 days (more than one year). Long-term capital gains tax rates depend on which ordinary

income tax bracket you fall under.0% if in the 10% or 15% tax brackets15% if in the 25%, 28%, 33%, or 35%tax brackets20% if in the 39.6% tax bracket

In both ‘short-term’ and ‘long-term’ capital gains tax cases, there are no allowable deductions that you may ‘take’ in order to reduce your personal capital gains tax liability other than capital improvements and sell-ing expenses such as commissions, closing costs and inspections. Please note that short and long term capi-tal gains taxes do not apply to any “C” Corporation orLLC filing an 1120 tax return. The “gains” from such a sale are considered ‘ordinary business income’ if the said entity is in the real estate business.

iRC seCtion 351The Internal Revenue Code, Section 351 was insti-tuted in 1921 and can be found under Title 26, Subtitle A, Chapter 1, Subchapter C, Part III, Section 351. It wasn’t widely used until Congress provided relief from its previously burdensome provisions in the Miscellaneous Trade and Technical Corrections Act of 1999, which for the first time allowed 351 transfers that included liabilities such as a mortgage. Before that date, 351 transfers could only be undertaken with unencumbered (or fully-paid) properties.

351 tRansfeRsThe government will assist people interested in ven-turing into business for themselves by allowing them to utilize previously owned assets to ‘fund’ their new business venture. The IRC refers to this as a ‘capital contribution’. The IRC further states categorically that in order for a transfer of real estate to a corporation to be tax-free, there must be a verifiable business reason for the transfer. Source of funding, necessary to under-take business, is in large part based upon the entity’s ‘business purpose’ such as the acquisition and selling of real estate.

The Equity Recovery Program is a process whereby a “C” Corporation is specially drafted for the property owner to exchange the ‘basis’ of the property for the stock of the corporation. Once transferred, the stock becomes ‘valued’ at the same basis that the property was valued prior to the transfer. When the corporation sells the property, the ‘code’ considers the income as ordinary income of the corporation and not as a capital gain of the corporation. Thus, the Equity Recovery Program (which utilizes a 351 transfer) eliminates federal capital gains taxes when the property is sold. And, by having formed the corporation in a tax-free jurisdiction such as Nevada, the property owner can eliminate state taxes as well.

oRDinaRy inCoMeOrdinary income is the income generated during the ‘ordinary course’ of a company’s business activities. For example, a new car dealership purchases cars to sell. The Internal Revenue Code considers these cars ‘inventory’. When a car is sold, the income de-rived from the sale is commingled with the income derived from servicing the cars and the parts the dealership sells for the cars. This income is never considered capital gains. This is a very important concept to understand as its application is equiva-lent to that of business whose ‘business purpose’ is the purchasing and selling of real estate. Should the corporation not have enough write-offs to eliminate its taxable income all together,the corporation would be required to pay taxes on the net amount remaining at the end of the tax year, if any. In other words, should the corporation not ‘spend’ all its income on allowable business expens-es by the end of its fiscal calendar year, the remain-

ing net taxable income would be taxed at the corporate level. It is important to remember that “C” Corporations invariably pay less in taxes than do individuals filing a 1040, LLC’s filing a 1065 or “S” Corporations filing an 1120-S on incomes up to $250,000.

351 tRansfeR ReQuiReMentsIRS Code Section 351 states that no gain or loss is recognized by either the contribut-ing shareholder or the recipient Corporation

if three conditions are satisfied. Assuming that the transfers having a bona fide ‘business purpose’ in real estate, the said conditions are:1.) there is a transfer of property (and not ser-vices)2.) solely in exchange for corporate stock, and3.) after the exchange the contributing shareholder(s) is (are) in control of the corpo-ration (i.e. own at least 80% of the voting and outstanding stock).

Contributions by several shareholders may be ag-gregated in determining if the 80% test is satisfied, provided that all contributions were part of a single integrated transaction to form the business. Note that contributions of cash or property in return for long-term debt (e.g., bonds) do not qualify for a Section 351 transfer treatment.

“No gain or loss shall be recognized if property is transferred to a corporation by one or more per-sons solely in exchange for stock in such corpora-tion and immediately after the exchange such person or persons are in control of the corporation.”!

– IRS Regulation §1.351-1(a)(1)

If all Section 351 conditions are met, the trans-action is treated as though ‘nothing happened’ in that no gain or loss is recognized. The basis of the shareholder’s stock equals the basis of the property contributed, and the basis of the property to the cor-poration equals the contributing shareholder’s basis.

Please contact our offices for more information on the Equity Recovery Program and to schedule a private consultation and learn how to lawfully avoid paying any capital gains tax on the sale of your next property, http://AssetProtectionServices.com

Lawfully AvoidCAPITAL Gains

Before selling a property, be sure to plan ahead to avoid capital gains taxes. Leave more profi t in your pocket with these simple steps.

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Damian BartonDamian BartonPresident

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[email protected]@AssetProtectionServices.com

Jay ButlerJay ButlerManaging Director

Mobile: (702) 997-3260Mobile: (702) 997-3260Skype: AssetProtectionServicesSkype: AssetProtectionServicesSkype: AssetProtectionServices

[email protected]

Dr. Robert HagopianDr. Robert HagopianChief Executive OfÞcer

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CashFlow Express - Why Wait for Wealth? It's RIGHT HERE! Featuring Randy Reiff, CEO, FirstKey...

Real Estate

Transcript of CashFlow Express - Why Wait for Wealth? It's RIGHT HERE! Featuring Randy Reiff, CEO, FirstKey...