Wealth Wisdom System

For those of you who are using Monica Main’s Apartment Building Cash Flow System, I know you have a new found interest in cap rates. Do you need reports for 2009?

We are pleased to present the CBRE Capital Markets Cap Rate Survey for the second half of 2009, which highlights investment trends for all property types in each of the key markets across the US. For this survey, our Capital Markets professionals provided their estimation of current cap rate ranges and investor activity in their local market. These cap rates are based on recent interactions that our professionals have had with active investors in their market.

I just read this article about buying houses from courthouse auctions that I thought you’d like to see.

By Octavio Nuiry
Staff Writer

Every week, tens of millions of dollars worth of foreclosed real estate is sold nationwide at sheriff’s sales and trustee’s sales, and savvy investors are finding a few golden bargains mixed in with many lumps of coal at these public foreclosure auctions. Investor Gregory Metcalf in Orange County, Calif., said sometimes he’ll scoop up five or six properties in a day.

“This is a highly specialized area of real estate,” warned Metcalf, the dean of the auction bidders who buys 500 to 600 properties a year and shows up daily at each of the Orange County trustee sales in Santa Ana, Orange and Placentia, Calif. “You would be foolish not to get training to learn how to work courthouse auctions. Spending $3,000 or more on training is nothing, because if you make a mistake here you’ll get killed.”
Last year, the auctions were largely deserted, with only a handful of the “regulars” attending the sales.

Not anymore. Now, from Malibu to Manhattan, courthouse auctions are attracting large crowds of bidders and gawkers – and investors are snagging bargains left and right. With the housing market enduring one of the largest declines in housing prices since the Great Depression, Metcalf and other regulars have an unrelenting cascade of foreclosures to select from. Sales are stalling, however, because delinquent borrowers are renegotiating the terms of their loans with lenders, working out new payment plans with banks. Some borrowers are filing for bankruptcy, delaying the foreclosure process. Others sell their distressed dwellings ahead of the auction via short sale. The rest go back to lenders.

Shrewd auction buyers won’t bid on underwater properties unless there are huge discounts and a potential to make a quick buck.

“In a declining market, you have to be very cautious about what you are buying,” warned attorney Ward Hannigan, owner of InnoVest Resource Management, a San Diego-based firm that specializes in buying courthouse auctions and a private, one-on-one foreclosure trainer. For one thing, cautions Ward, buying a house at auction is far different from buying a house through a broker. And though auctions offer a real opportunity to find a house at a lower-than-market price, the risks, he said, are real.”

As Hannigan, Metcalf and other regulars have learned over the years, no minefield of American real estate is as explosive and dangerous as foreclosure sales. Buying at the foreclosure sale is plagued with risks. Most defaulting properties have multiple loans, and buyers need to verify that they are bidding on a property that has no senior liens. For protection, buyers should hire a title search company to make sure the property is not encumbered by liens.

Experts said the most important rules when buying at auction are to have an exit strategy, don’t get too greedy, and be patient waiting for the best deals.

Source

Have you heard of HomeVester’s Ugliest House Contest?

HomeVestors is known for buying ugly homes, and homes from people in ugly situations, and rehabbing them. Many of the rehabbed homes are sold on the retail market; others are maintained as rental properties.

“To most people ugly is bad, but to us ugly can be tomorrow’s beautiful. Beautiful homes easily attract attention. This contest celebrates the ugly ones – the ones that may be homely now but will become the bell of the block after they’ve had a makeover.”

Rules of the “Ugliest House” contest:

• Any investor can enter ugly houses he/she owns/owned in the area.
• An ugly house cannot be entered if the original occupant still lives there; the original occupant must vacated.
• The ugly house already may have been rehabbed; that’s okay, as long as it was ugly at some point between March 1, 2009 and February 28,2010.
• Houses must have been investor-owned at the time they were ugly.
• There is no limit to the number of ugly houses that can be entered by each investor.

To submit a house in the contest, email ugliesthouse@homevestors.com by March 26, 2010:

• A detailed description of the ugly house.
• Photos of the nominated houses of what makes each house ugly.
• One-minute videos also may be submitted by first uploading each video to YouTube and then providing a link as part of the submission.
• The name, email address and phone number of the investor submitting the contest entry.

See past winners!

If you’re working on getting business credit, here are some great ways to totally screw it up:

• Using personal guarantee to secure corporate credit
• Not incorporating business
• Out of sync with credit bureau score standards
• Wrongly believing in your actual ability to repair your bad credit
• Believing that you already have a great profile just because you have a business credit card
• Improper documentation of personal and business finances
• Presenting an incomplete application to potential lenders
• Working with bad vendors who report negative feedback
• Approaching lenders who charge too much interest rates on loans
• Not studying the basics of corporate credit management

Here’s instructions on the right way to do it so that you can have some real cash at hand to grow your business.

“Throughout the life span of a business, the critical need to set up and establish corporate credit will most likely emerge without fail. Businesses may need to build corporate credit before they find a need for it! No lending institution will lend credit to a business that is in need of some urgent cash. All businesses must initiate and start building a positive business credit history so that they can get a sizable amount of corporate credit over time.”

I know it’s been a little while since I last told you my discouraging news that Monica didn’t like the property analyses I had sent her way. Not long after that, I received an email saying that because it’s been such a buyer’s market, she and her partners had bought more than they anticipated this quarter and wouldn’t be buying again until next quarter.

Which is one month away.

I have spent this time continuing to analyze properties. And I’ve been learning about building my own business credit. While I LOVE the idea of Monica — with her TWELVE YEARS of experience — being my partner on my first purchases, I also know that eventually I’m going to want to buy them on my own.

I JUST now received two emails from Monica saying that she may be interested in moving forward on a couple of deals I sent her. She wrote:

Katy,
Thank you for sending the CFE for your deal.

As you know, there are many requirements that have to be analyzed then matched to our criteria before a deal can be presented for partnership.

Please make sure that you send me the following in ONE email:

* CFE including itemization of actual expenses from the last fiscal year (2009)
* 3 years of actual income and expenses
* Current rent roll
* 3 year proforma
* 12 pictures of the property
* Appraisal (if the property owner had one in the past 6 months)
* Business plan for how you will manage the property as part of the partnership requirements
* Affidavit from the seller or seller’s agent stating that the property is 85%+ occupied

Please go down the list and send me each of the above requirements so that I may present your deal to my investor partners for further review.

Sincerely,

Monica Main

I forwarded the email over to my broker in the area. Yes, I got myself a buyer’s broker to represent my interests. I pay him nothing. He’ll split the commission with the listing broker. He’s going to get to work on putting all this information together on both properties first thing in the morning. I, meanwhile, will be writing up the business plan for property management.

I’m so excited. Let me tell you just a few quick numbers about these two properties.

• 131-unit property with a monthly cash flow of $9,462
• 138-unit property with a monthly cash flow of $15,454

The way the partnership works, Monica and her partners get all the financing, and then I’d get half the equity and half the cash flow. So for these two, I’d get $4731 and $7727, respectively. If she wanted to go ahead with both properties, I’d make $12,458 and month.

You ready to do this too?

Learn How You Can Invest in Self Storage Facilities

I just got this from my buddy Preston. I think he’s awesome, and I find him inspiring. I wanted to share his message with you.

Proper Perspective Produces Positive People
Say That Fast Ten Times. Actually Now That I Just Did It I Realized It’s Too Easy. Nevermind.
by Pre$ton Ely

“The basic difference between an ordinary man and a warrior is that a warrior takes everything as a challenge while an ordinary man takes everything either as a blessing or a curse.”
- Don Juan, Tales Of Power

Don’t you just absolutely love it when you read or hear something that confirms you have been doing things the right way all along?

There are so many uncertainties in this world. So much confusion. We’re always second guessing ourselves. We’re not fully convinced that we have what it takes to make it in this merciless and sometimes downright terrifying world. We’re almost certain that we have been doing everything wrong. Everyone else knows what time it is; But not us. We’re messing things up royally. Right?

But then along comes some little message from the universe that confirms that in at least one area – we’ve been doing a pretty darn good job! What a relief!

This happened to me just this past week on my way to Costa Rica.

I woke up at 4 am and went to the airport only to find out that my flight was canceled.

“How annoying,” I thought. “No biggie. God is probably just saving me from a plane crash or something. Thanks, God. Good lookin out.”

And then I missed another flight due to Delta being…special. And then Delta lost Louis (my luggage. I name my luggage). And then I got physically sick from the stress.

So as I’m standing in the Atlanta security checkpoint line for 3 and 1/2 hours after waking up the next day this time at THREE a.m., sick, my back absolutely killing me (I have a bad back), getting the run around from the airline about where in the hell Louis is, and a bunch of other secret annoying things that I’m not telling you…I was tempted to just go ahead and freak out right then and there, curse the day I was born, and say what we all say in these types of situations -

“Why, God?”

And I did say it.

But the second I said it, I realized how weak that was. And the realization of how pathetic I was being acted as a catalyst for immediate and purposeful change.

I realized I had a choice to make. Was I going to be a wussy and whine? Or was I going to be a warrior and win?

I embraced the way of the warrior.

I chose to view the whole entire thing in the context of THE TRUTH. And the truth was simply this – This was simply a test. A battle to win. This was warrior training. Nothing more and nothing less.

And it was for my own good.

“The more you sweat in training, the less you will bleed in battle.”
- Motto of Navy Seals

Get through this without physically murdering myself or any random emoloyee of Delta? Maybe even put a smile on my face in the midst of it? …and come out on the other side one notch stronger. One notch more powerful. One notch bigger. One notch more prepared for greater obstacles in life.

My soul was expanding right there in front of me. And it simply does not feel good to be stretched. Picture William Wallace at the end of Braveheart. That’s what was happening to my heart.

The second I made that switch internally – that I was going to view this as warrior training – something happened.

It didn’t get any easier. But my angst turned to determination. My fear became confidence. My fretting faded. And my “Why God?” turned to “Bring it on.”

And then on the plane ride over to Costa Rica I came across this quote in a book I was reading:

“The basic difference between an ordinary man and a warrior is that a warrior takes everything as a challenge while an ordinary man takes everything either as a blessing or a curse.”
- Don Juan, Tales Of Power

Man that was so powerful to read right in the middle of my mini-crisis. God was indeed teaching me a very valuable lesson. And He was even kind enough to cement the lesson into my spirit through that quote. Like a loving Father, He was further initiating me, His son, into manhood.

And I thanked Him for it.

I encourage you to view life as a challenge and not a curse. Start influencing life rather than the other way around. Determine within yourself that you simply will not, absolutely CAN not be beat.

In my eyes there is nothing more pathetic than people who sit back and let life have it’s way with them. It makes me physically sick to my stomach.

Where is your self respect?

Where is your courage?

Where is your shame of being a damn loser?

How can you possibly bear that?

Where is your HEART man??????

Wake the *@#$ up and FIGHT damn it!!!!!!!!!!!!!!

For me I would rather DIE than be a loser in life. It is simply unacceptable. Unbearable. I absolutely insist on being one of the best at whatever I do. If not…what’s the point? What are you doing? What are you working towards? Who is it that you think is going to come and do this for you? Are you just floating along pointlessly taking up space? Why not just put yourself out of your misery now? What GOOD are you doing anyone?

Deep down you want to win. You want to be happy. You want to FIGHT. You want people to look up to you as a source of strength in this world that they can lean on. You want to do GOOD. You want to come ALIVE.

Well DO it for crying out loud.

Life has beat you up a little, and I understand that. You think I’ve had it easy? Think again. Life has brought me to the point of near suicide. To where I simply did not know how in the world I was going to go on.

But I simply refused to quit.

“To what do I owe my success? Man, I just absolutely refuse to give up.”
- Will Smith, famous actor

There are two kinds of quitting in this world. Physical suicide and spiritual suicide. They are both just about the same in my opinion. Very few people choose the former. 97% of people on earth have chosen the latter.

Are you alive? Do you have any real hope that spurs you on to action that leads to gradual, steady, and noticeable success? Are you really even trying? Or are you simply going through the motions? Spiritual suicide occurs when you decide to stop feeling. To stop caring. To stop trying. To stop enjoying. You simply turn your heart off…and coast. You are a walking dead person.

Tragically this often occurs as a child because of something your parents did. Your dad sucked. Whatever.

Go to counseling. I do. I go every week. Done it for the past 7 years. I’d be a wreck without it. Call me weak if you want. I call me REAL.

Do some digging and find that place in your heart that is so wounded. So scared. So hurt. So buried and hidden away from the world. It is the root cause of all your problems and discontent. And it’s not going away easily.

Ask God to heal your heart. And He’ll do it.

Man, I keep trying to end this article, but it’s just not happening.

More rants…

STOP RUNNING FROM YOUR PAIN. TURN AROUND, LOOK IT IN THE EYE, AND FREAKIN FACE IT.

You are not a victim. No one feels sorry for you. Life sucks for everyone (everyone who is paying attention anyways) – join the crowd. Life is not “doing” anything to you. You are getting exactly what you want. You are quite literally attracting your life to you.

Start wanting and attracting different things. Accept responsibility for your life.

“Don’t wish it was easier; wish you were better. Don’t wish for less problems; wish for more skills. Don’t
wish for less challenges; wish for more wisdom.”
- Jim Rohn

“The LORD your God is in your midst, A victorious warrior. He will exult over you with joy, He will be quiet in His love, He will rejoice over you with shouts of joy.
Zephaniah 3:17

Real Estate Investing Coach/Rockstar/Assassin R. Preston Ely publishes the critically acclaimed weekly ezine The Flip Factor. If you’re ready to jump-start your life, quit your boring job, make a bajillion dollars, and have more fun and freedom, get your FREE 7 Day Mini-Course RIGHT NOW at www.learntowholesale.com!

© R. Preston Ely (Don’t steal my stuff.)
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