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Transcription

Oktober Fest!
Volume 19 Iss: 10
October 2016
GENERAL MEETING
Our Next General Meeting is Monday, October 17, 2016
6:30 pm. Registration; Meet the Vendors
7:05 pm Members Offering Deals
7:10 pm General Announcements
th
OCTOBER 2016 METRO
METRO Real Estate Investors Association
7:30 pm. 4
Annual Halloween Panel: “What Would I
Have Done Differently…If I Knew Then What I
Know Now!” Some amazing stuff just happens and
lessons are learned from the best teacher: experience!
Trick or Treat Time
This night is especially relevant after the Cash Glow
Game Night we had back in July. Our members, playing for
the first time, were intrigued by the results from a turn of
events-by a flip of a card or the roll of the dice! It is not
unlike what really happens in real life. You do the
decision-making based on the information available to you at
the time.
Fate will take over the game is a great way to attach an
investor mindset to your psyche. A little jumpstart to taking
the leap and you will roll with the unexpected twists and turns
in investing. “You can’t win it if you ain’t in it.!
The Panel will show the good, the bad and the ugly in
the details of their experiences; some of which will surprise
you!
This year there will be a change up from prior years’
October scare night. The panel will discuss both the
unexpected good and bad outcomes personally from their
real estate investing.
MREIA is
a Member of:
MREIA is a
Member of
Inside This Issue
3 President’s Desk: Major Mistakes Most Investors Make by Phyllis Rockower
4 Dealmaking: A Florida Bank REO Deal by Marlene Green
5 Dealmaking: A Four Unit Deal by Marlene Green
7 Rehab: Before You Plum with P.E.X. Read This! by Bruce Davis, Sr.
9 Beginners: Hard Money Can Get You Faster Deals, Bigger Properties by David Lindahl
10 Financing: Creative Financing + Hard Work = Profit by Jack Miller
11 Wholesaling: Their First Deal! by Brian Baker
12 Financing: Recourse Versus Non-Recourse Loans by Dyches Boddiford
13 Motivation: Do You Have the Right Stuff? by Phyllis Rockower
13 Rehab: Smelly Toilet Repair
14 Finding Deals: The One that Got Away: Top 8 Reasons I Lose Out on R.E. Deals by Kevin Perk
16 Beginners: Sixty Days to Your First Bargain Purchase by William Bronchick, Esq.
18 Taxes: Documenting Business Expenses Adequately by Charles Perkins
20 Selling: Selling in a Down Market: What Can I Do? by Wendy Patton
25 Options: The Easiest Option Deals by Jackie Lange
27 Legal: RESPA Rule 5B (and the Tooth Fairy) by William Bronchick, Esq.
28 Investing: How I Made $3 Million in Seven Years by Joseph Neilson
31 Finding Deals: Due Diligence Checklist by Gregory Pinneo
LANDLORDING
33 How to Screen Tenants in Five Easy Steps by John Nuzzolese
35 Ten Things I Wish I Knew Before Becoming a Landlord by John Nuzzolese
36 Mrlandlord.com Management Tips
39 Tenants Accidentally Blow Up an Apartment Unit
40 Rental Policies & Standards for Applicants by Robert Cain
41 What Tenants Need to Bring to Showings by Don Conrad
43 Sponsor/Vendor Index & New/Renewing Members
49 MREIA Officers & Contact Information
Volume 19 Issue 10
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October 2016
FROM THE PRESIDENT’S DESK
Guest Editorial: Major Mistakes Most Investors Make
by Phyllis Rockower
"Not Making the Decision That Investing in Yourself on a Continuous Basis is Profoundly Important If
You Want to Continue Climbing to Higher and Higher Income Levels!"
It totally amazes me that so many investors moan and complain about how they're tired of not making enough
money, yet they refuse to do anything about it! One of my favorite quotes is: "If you keep on doing what you've
been doing then you'll keep on getting what you've been getting, so don't be surprised!"
I honestly believe that all of the knowledge you need to do more deals...make a ton of money...take your business to
the next level, etc., is out there. You just need to do whatever you have to do in order to get it. But unless you
decide to take a portion of your income and investor it back in yourself so that you can get the kind of strategies,
tips and shortcuts like I share with you, then YOU won’t make more money!
I believe this 100%!
But, it's profoundly important to make sure you ONLY "invest in yourself" with those who will SAVE and MAKE
you money. Don't fall for the BS "dream big fluff" like so many do, feeling like a complete failure, ready to give up
and quit. And especially don't fall for the national "gurus" with slick marketing ploys that will set you back many,
many thousands.
So, back to my point if you're stuck in a rut, right now, then "Don't just sit there, DO something about it!
NOW!"
Decide to get off of your butt, take responsibility for yourself and for what you are or aren't getting in your real
estate career. Make a commitment to yourself to seek out and invest in whatever CD program, DVD program,
seminar, training session, workshop or boot camp that you need to invest in so you can quickly begin making big
money.
Notice, I didn't say, "Spend money on" I said, "invest in, “because you MUST STOP thinking of it as though you
are spending money. That's the way a "poverty conscious investor" thinks.
From this moment forward, I want you to "shift your thinking' and join me, and the students I've helped, in
thinking like a: "prosperity conscious" investor.
But don't just invest in yourself once. If you really want to make big money from investing each and every year for
the rest of your life, then you need to make this a consistent part of your business so it becomes a habit that you
continuously practice.
It's time to get started before another year goes by.
The author is the President and Founder of REIC of LA. Reprinted by Permission from the R.E.I.C. of
L.A. News. August 2015. Published by the Real Estate Investors Club of Los Angeles. Phone: 310-792-6404
Visit www.realestateclubla.com
Volume 19 Issue 10
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October 2016
DEALMAKING
A Florida Bank REO Deal
by Marlene Green, Vice-President, CFRI
Editor’s note: if you transacted a good deal that you would like to share with us, please email
[email protected] Please put “MREIA BUSINESS” in the Subject Heading.
Seasoned rehabbers of over 60 properties and long-time investors, Susie and Michael Reale of InvestiSource.com,
believes in “buying low, making it fabulous and selling fast at market value.”
Susie and her hubby purchased a 2/1 SFH, 980 heated SF, College Park Bank REO on the MLS for $102,000 on
October 10, 2012. The original asking price for the property was $120,000.
Susie funded the deal with a $120,000 private money loan from a CFRE member’s IRA.
To get the square footage over 1000 square feet for better marketability to 1065sf, they enclosed the utility area.
They also installed a new kitchen with appliances, updated the bathroom, refinished the floors, changed out the
lighting fixtures and ceiling fans, updated the electric panel, improved the exterior and added cedar paneling to part
of the front as an accent, plus landscaping and painting inside and outside.
The renovation cost $18,500. Susie said it was actually one month of work but due to juggling other projects it
actually took two months. The after repaired Value (ARV) was $165,000.
Fortunately, the house was sold before completion to a neighbor who rented in the area and had been looking and
missing out on buying other homes. The Buyer watched their construction and renovation and approached them
about their plans for the property.
They quickly wrote up a contract for a purchase price of $169,000 before Susie could even list the property.
The only snag Susie had was making sure the project was permitted properly since city inspectors decided to stop in
but she got the help of CFRI Business member Mark Orman, who took care of everything for her.
Susie says that she does very conservative and accurate comps when buying and that she has never lost money on a
rehab by buying wrong.
When selling she makes a point of meeting the Buyer’s appraiser on site, she shows them the before and after
photos, gives them her detailed Scope of Work, her list of expenses and a list of suggested comps.
Susie shared that as a long-time CFRI member, she is thrilled to be able to call on fellow members for help as
needed from permitting to private lenders to mortgage folks for Buyers, plus inspections and other services.
Susie Reale’s Deal Summary:
Purchased: October 10, 2012
Sold:
February 21, 2013
Purchase Price:
$102,000 (Borrowed $120K Private Money from CFRI member’s Self-Directed IRA)
Sold Price:
$169,000
(Continued on Next Page)
Volume 19 Issue 10
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October 2016
(Continued from Previous Page)
Acquisition Cost: -$102,000
Rehab:
-$18,500
Interest:
-$4,800
Insurance and closing costs, utilities, misc.: -$4,500
Closing gift
Commissions:
NET PROFIT:
-$300
$0
Marketing to Sell: $0
$38,900
Reprinted Courtesy of the Central Florida Realty Investors. Visit www.CFRI.net
From the May 2013 issue of the CFRI Newsletter.
DEALMAKING
A Four Unit Deal
by Marlene Green, Vice-President CFRI
Editor’s note: if you transacted a good deal that you would like to share with us, please email
[email protected] Please put “MREIA BUSINESS” in the Subject Heading.
Eli LaSalle, a coaching student of CFRI Success Team Member Chris McClatchey, found a four unit apartment
building with 3-1Brs and 1-2Br offered by a tired landlord who was a motivated seller on realtor.com. The property
was free and clear and the after repaired Value is $95K.
David contacted the Realtor® and with Chris’ Coaching on the Power of Zero he offered $10K Down and $300
per month for 10 years on the Seller’s full asking price of $75,000.
The Realtor® countered that $20K and $400 per month for 10 years would be more acceptable to the Seller. They
also wanted a short inspection window of 28 days because the Seller was frustrated that he lost time giving a
wholesaler the opportunity to sell the property and he could not perform.
Eli used his contractor to inspect the property and found that there were roof leaks and minor improvements to be
made estimated at $6K-$8K and taking two weeks. He was able to negotiate $50 off the monthly payment taking it
down to $350 per month. David wishes that he used an inspector to inspect the property instead of his contractor.
David used his own cash of $20K as the down-payment and it took seven weeks for them to close on the deal. He
is now working on getting the renovation work done for $25,000.
As part of his turnaround plan to improve the property he plans to increase the rents after the repairs are done and
put in a Section 8 Tenant. Currently 3 units are rented and cash flow is now $415/month.
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October 2016
Terms of Eli’s Deal:
$75,000 Sale Price
0% Interest
$20,000 Down
$350 monthly payments
10 Years/120months
$13,000 balloon
Zillow Zestimate - $93K
The Seller paid the Realtor’s fee.
Eli’s Turnaround Plans are as follows:
• Approximately $25K for rehab: mild to moderate rehab needed in all 4units, common areas and cosmetic exterior
touch ups
• Hire Property Manager
• Raise rents on current tenants
• Strong Potential for Section 8 rents higher than market
Calculating Cash Flow and ROI [return on investment]:
Gross Rents
$ 2,100
Expenses
$ 1,000 (Utilities, Property Management, Maintenance, Vacancy Rate)
Debt Service
$ 350
Monthly Cash Flow$ 750
ROI
$9K/$45K= 20%
Eli shared that aside from his mentor Chris McClatchey, attending CFRI events and focus groups to meet and learn
from experienced investors and other members has helped him tremendously!
From the August 2013 issue of the CFRI Newsletter.
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October 2016
REHAB
Before You Plumb With P.E.X. Read This!
by Bruce Davis, Sr.
It used to be that all water piping was metal pipe. About a quarter century ago we in the U.S. started using a pipe system called
P.E.X. pipe, which had been used in Europe for several decades. P.E.X. is simply polyethylene pipe that has been changed by
one of three methods, into a “crosslinked” material. Crosslinking alters the performance of the original polyethylene pipe and
substantially improves it in several ways so that it can better withstand pressures and temperatures in domestic hot and cold
systems, while it remains very stable chemically and very flexible.
We are often asked questions about P.E.X. pipe/tubing:
• What are the differences between, the several brands?
• Which P.E.X. is best to use?
• Is there any P.E.X. pipe or tubing I should avoid?
And the answers to these questions are always governed by the system; what will it carry, and where and how will it be used.
Here are the specifics.
1. What will the application be?
• Domestic potable cold and hot water?
• Heating System; radiant and/or baseboard?
• Another, different liquid used for some commercial process?
2. What liquid will be carried by the system?
•
•
•
•
•
Is it clean, soft water?
Will the water be chlorinated?
Is it hard, aggressive or acid water?
Will it be a pressurized static system? ,
Does any part of the system need to circulate full or part-time?
3. Where will the system be located?
• Hidden behind the walls of an occupied living space?
• Inside a structure, but not in a heated space?
• Underground?
• Surface mounted and exposed to ultra-violet light; either natural sunlight or artificial from fluorescents?
The point is that everything possible needs to be considered regarding the system that is being built, and then the
piping/tubing system can be chosen based on those things.
In the United States, any system that's sold for use as a potable water system (P.E.X. or not) is required to comply
with NSF/ANSI 61; Drinking Water System Components. Another organization that tests and rates the systems we use is
ASTM International. Founded as the American Society for Testing and Materials (ASTM), it's a non-profit that develops and
publishes approximately 12,000 technical standards, covering the procedures of both
testing and classification of materials of every sort.
As far as I know, all of the P.E.X. piping/tubing systems that have been approved by every Plumbing Code used in the U.S.
have been tested and rated to NSF/ANSI 61 and by ASTM International; so once we know the details and specifics of our
system, we need to check and see that it conforms to NSF/ANSI 61, and also see how ASTM has rated the P.E.X. systems
we are considering; then we'll be able to see what system would work best for us. Additionally, I think it's good to talk with a
professional who has used the system being considered, to make sure that both the piping/ tubing and the fitting/connection
method has held up well in “real world” applications.
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October 2016
For example, over 25 years ago we started to offer and use a brand of P.B.X. piping for domestic potable water that rated
very well in every category. We liked offering a P.E.X. system, because in the Pacific Northwest where we live and work, our.
drinking water is almost exclusively snow-melt, surface waters; not from wells. The water is very clean, but. because it's so
pure with extremely few minerals in it, it's strongly aggressive .
We learned that many of our clients who have copper water pipes were experiencing 'pin-hole' leaks after about 15 years. It
was not due to “acid water;” the ph was neutral. And it was not due to improper or non-existent
“grounding” from the electrical system; we checked carefully. Sometimes, the water is so clean it's “hungry,” and it
eats into the copper pipe.
P.E.X. was a great solution. However, after several years we found that we started to get a leak or two on houses
that we had re-plum had with the P.E.X. system, and the leak was always in the same place; next to a fitting, where there
was a thick band of P.E.X. squeezing down on the fitting to make it watertight. After extensive research, I discovered
that wholesale suppliers were not keeping those P:E.X. bands protected from artificial U.V. in storage, and some of
them were being exposed beyond what the manufacturer recommended (depending on the type, all P.E.X. is sensitive
to U.V. in varying degrees and can only be exposed to it for 30, 60, or 90 days maximum).
Consequently, we changed systems so that all the fittings are made watertight by crimping an S.S. band onto
it, and we've never had another leak due to a materials issue.
These days installing metal piping for either potable water or' heating systems is the exception and not the
rule. In our experience a P.E.X. system that is wisely chosen, and carefully and properly installed in accordance
to both the manufacturer's recommendations and the Local Building Code, is a system that will outlast and
out-perform any other type of system. It takes a little more careful planning than in the “old days,” but the benefits are
worth it!
Copyright © 2016 Bruce Davis Sr., Day & Nite Plumbing and Heating Inc. Reprinted by Permission. Bruce Davis Sr., Licensed
Journeyman Plumber, Licensed Electrician, HVAC/R, Electrical Administrator, HVAC/R, Certified WA State C.E.U.
Instructor, is President of Day and Nite Plumbing and Heating, a 60 year old family owned and operated plumbing and
heating business in Lynnwood, Washington. Email Bruce@ dayandnite.net Call 425-775-6464 or visit
www.dayandnite.net Courtesy of the Rental Housing Association of Puget Sound, Washington State. From the
March 2016 issue of “Update.” Visit www.rha-ps.com
September Election Results
President: Daniel Schwartz
Treasurer: Robert Mularz
Volume 19 Issue 10
Vice President: Murray Kane
Secretary: Nick Zampetti
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October 2016
BEGINNER’S CORNER
Hard Money Can Get You Faster Deals, Bigger Properties
by David Lindahl
Blog Posted on September 22, 2010
You’ve found a great property. But you need ALL CASH to close quickly before other investors grab the deal. And you
don’t have nearly enough money on hand. Furthermore, your credit score is lower than the I.Q. of a mosquito and
there’s no chance a bank will loan you a dime. Are you out of luck? Not at all. You have a resource that’s older than the
banking industry itself: the hard money loan.
Hard money is also known as “private money” because it comes from a private individual, company, or investment pool.
You can have your money in a couple days as opposed to a month or more. Being able to tell a seller that you can close
in a week and pay all cash gives you tremendous negotiating power.
The reason that hard money is available so quickly is that private moneylenders don’t look at your employment history,
income statement, or credit score. They make their decision based solely on the collateral for the loan. Which in your
case is the real estate that you’re purchasing.
Typically, hard money lenders will give you 65% to 80% of the property’s value. In today’s foreclosure heavy market
where properties can sell for 50% or more below value, a hard money loan could cover 100% of the cash you need.
Hard money loans are for a shorter term than conventional bank loans. Typically, hard money loans peak out at 24
months. But they can be much shorter. A hard money “bridge loan” can be for a period of days and is often used to
close a deal while the buyer’s conventional bank loan goes through its snail paced approval process.
For some borrowers, “hard money” has come to mean bridge loans, whereas “private money” has become more closely
associated with longer payback periods of 1 to 5 years. For clarity, be sure that whomever you’re dealing with
understands exactly what you mean when you use a generic term like “private money.”
Here’s a short list of the main risks and rewards of hard/private money.
Risks
▪
▪
▪
▪
Private money loans are short-term. Unless your plan is to flip the property, you’ll need to still find long-term
financing.
You really must know what you’re doing. You get your money fast, but you could also lose the property fast.
If your property is foreclosed, you less protection and recourse than property owners with bank mortgages.
The industry is not as regulated as the banking industry. Borrower beware.
Rewards
▪ Most lenders are online and thus it’s easy to shop rates.
▪ Hard money interest rates do not fluctuate from day to day like mortgage rates in the institutional market.
▪ Less “red tape.” No personal credit check, employment check, income check.
▪ The property is the total collateral. If you have a strong property, hard money should be no problem to acquire.
▪ You can get the money fast. Sometimes within 24 hours.
▪ Unlike banks, hard money lenders value a property based on ARV (after repair value).
▪ Hard money lenders will take risks that banks will not.
▪ Private money lenders will fund large projects. This can be your opportunity to enter the major leagues.
Don’t shy from seeking private money. If you find a great property, negotiate a savvy deal, and have a solid exit strategy,
you shouldn’t have any problem presenting your plan to private lenders and getting the funds you need.
Reprinted by Permission. David Lindahl, also known as the “Apartment King” has been successfully investing in single family
homes and apartments for the last ten years. He was a featured MREIA speaker in January 2008. He can be reached at
[email protected] and www.rementor.com.
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October 2016
FINANCING
Creative Financing + Hard Work = Profit
by Jack Miller
I just got back from a seminar in a high priced area. What I discovered was that people seem a lot more
interested in proving to themselves that they can't make a profit in an area full of over-leveraged speculators
than in finding ways to overcome the obstacles that a slow housing market presents. They don't seem to
understand that when it becomes much harder to make money, that only those who persevere will come out on
top. They constantly seem to be looking for some gimmick that will enable them to avoid loss and capture easy
profits as they were able to do for the ten years preceding 2005.
When you get right down to the bottom of their dilemma, it boils down to the lack of easy financing to use
when buying, and when re-selling to marginal buyers. For some reason or other, they seem to think that the
people they buy from are justified in standing by their prices even when they won't be able to sell the houses
they buy from unmotivated sellers. My conclusions are that many people would rather sit idly by with their
hands folded awaiting salvation in the form of some government program that will return the good old days
rather than taking the bull by the horns and changing their own attitudes and ways of doing business.
Gone are the days when a real estate broker would be willing to carry endless offers and counteroffers back and
forth between buyer seller in order to work the price down. So too, are all those complaisant inspectors,
appraisers, loan officers, and escrow companies that stretched standards to the breaking point. Today, the deals
are going to go to those who develop some negotiating and financing skills to make deals go together.
I'm not talking about working some kind of short-sale magic to lower the price. I'm talking about being creative.
One of the buyers who I finance just bought a free and clear mobile home priced at $105,000 that had been
converted to real estate. He paid the full price, but not in dollars. He found a bond broker who could buy
$100,000 in bonds for $66,000. The seller preferred to accept these bonds in lieu of carrying back seller
financing at zero interest. With about $15,000 in fix-up, the unit should sell for about $159,900 with 103%
financing for someone with a 650 FICO score. This is in one of the hardest hit foreclosure markets in the
country.
How did he manage this? Not by buying lists of foreclosures or hiring someone else to find the property. He did
it the hard way by knocking on doors and sending out letters offering to pay cash for houses and mobile homes.
In short, the used his initiative and imagination to put the deal together.
I'll readily admit that he has been a long time student who learned these techniques at my seminars and from my
newsletters. The question you should be asking yourself is whether you are willing to invest in your own
success by doing the same. If not, you'll be leaving all that opportunity to people like him.
Reprinted by Permission. This article was first published at www.CashFlowDepot.com Call (972) 496-4500. Jack
Miller passed away in October 2009. A few of us were fortunate to be able to attend some of his outstanding
seminars and also to get to know him as a wonderful person. Jack appeared at MREIA meetings and was an
international speaker and active investor, specializing in single family houses. He wrote a monthly investment
newsletter and conducted seminars on Exchanging, Management, Portfolio Strategies and Options.
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WHOLESALING
Their First Deal!
by Brian Baker, Vice-President, CFRI
Completing the very first deal as an investor is a HUGE milestone. And Jonny & Bree March, members of CFRI
for just over three months, have certainly hit it big with the deal below!
Following the advice of mailing for dollars and wholesaling properties, the March’s found their first investment deal
through a direct mail campaign targeting absentee owners over 50 years of age with properties having at least 60%
equity. A seller quickly responded to their mailer and the contract was agreed to over the phone before the March’s
had even visited the property!
The single-family house they found was in very good condition. It had an ARV (After Repair Value) estimation of
$190,000, and was owned by an individual that was tired of landlording. Located in Altamonte Springs, the property
was a tenant occupied, 3-bed/1.5-bath at just over 1300 sq. ft., with a pool, renting at $1000/month.
The property was put under contract with a $100 deposit, 45 days to close, and the option to assign. This allowed
the Jonny & Bree to bring in an alternate buyer for the property, take an assignment fee, and still deliver the agreedto purchase price to the seller.
Deal Entrance
Purchase Price $110,000
Holding Costs
$0
Repairs
$0
Total Upfront
$100
The March’s quickly found a qualified cash buyer through their CFRI network, yet they soon tasted panic when that
buyer abruptly backed out of the deal just days before closing. Bree went back to the seller and was successfully able
to negotiate an extension. “Since Bree is so amazing, when we needed an extension to the contract there wasn’t
really an issue,” said Jonny.
They soon found three more potential buyers via CFRI, two of which also backed out before leaving the final buyer
to take make the purchase moments before contract expiration. All went smoothly from there. The March’s were
able to assign the contract the final buyer for a handsome wholesale profit of $10,000 in exchange for only 20
hours of their personal time.
Their end-buyer purchased a tenant occupied, turn-key rental property at a sales price plus wholesale fee that made
complete sense for them. And, the seller was able to get full-cash at the sales price they desired. An awesome
example of a win-win-win transaction!
Deal Exit
Sales Price
$120,000
CC + Commissions
- $0
Total Exiting
- $120,000
Gross Profit
$10,000
From the February 2016 issue of the CFRI Newsletter.
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October 2016
FINANCING
Recourse Versus Non-Recourse Loans
by Dyches Boddiford
As an investor, you may have gotten owner financing in the past that was non-recourse. You may have thought it meant
the seller could never come after you personally, but as you will see below, that is not necessarily true.
A recourse loan is a loan where the borrower is personally liable for repaying the outstanding balance on the loan. This
is in addition to the collateral itself. In other words, if the collateral securing a loan needs to be liquidated but is
insufficient to cover the total owed on the loan, “recourse” enables the lender to go after the borrower and any
guarantors personally to cover the shortfall. Full recourse loans are common with consumer loans and construction and
other shorter term commercial real estate financing.
A non-recourse loan is a loan where the borrower or guarantors are not personally liable for repaying any outstanding
balance on the loan. Only the collateral itself can be looked to by the lender to cover the outstanding loan amount.
Though we see this type of loan occasionally in individual real estate investor area, non-recourse financing is typically
found on longer term institutional commercial real estate loans collateralized by a performing asset in good repair.
A common misconception with non-recourse loans is that with such a loan a borrower can never be held personally
liable in the case of a loan default. But this is not always true and there are several exemptions commonly covered under
what’s known as carve out provisions or the bad boy guaranty.
Carve out provisions, also known as “bad boy” guaranties, protect the lender by enabling personal recourse in the case of
certain events, such as fraud. Essentially, bad boy guaranties are exceptions to the non-recourse status of a loan. They
were created to prevent the borrower from simply siphoning cash from a property and then defaulting.
These carve out provisions vary by state, but here are some common bad boy clauses included in non-recourse loans:
*Committing a criminal act
*Fraud or misrepresentation
*Failure to maintain required insurance *Failure to pay property taxes
*Filing for bankruptcy
*Any environmental indemnification
Many people wrongly think that the bad boy guaranty is limited to just those major events or bad acts. Though
somewhat true in the past, over time the bad boy guaranty has slowly expanded to include more and more minor
provisions, such as failure to provide financials to the lender or to permit lender inspections of the collateral.
Most of you will never give non-recourse financing. This is the best approach. Even if you never expect to go after a
borrower personally, using recourse financing will encourage them to use their best efforts to get you paid. You want
them to lose sleep in a default situation wondering if you will come after them personally.
But, should you ever provide a non-recourse loan to a borrower, you want to make sure that you include any bad boy
provisions you desire covered, irrespective of those provided under state law. While limiting the personal exposure for
borrowers, it also protects the lender and allows them to go after the borrower/guarantors personally in the case of
certain events such as fraud.
Recourse just puts the borrower on the hook for the loan, in addition to the collateral itself. This type of loan incentives
borrower to get a property fully renovated, constructed, and/or leased. Avoid non-recourse loans unless you are the
borrower. Reprinted by Permission. Copyright 2016 The Oaks Group, Inc. All Rights Reserved.
PO Box 505, Marietta, GA 30061. Visit www.assets101.com
Volume 19 Issue 10
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October 2016
MOTIVATION
Do You Have The Right Stuff?
by Phyllis Rockower
When you buy a cd set, attend a seminar, hire a mentor, you are not spending money, you are investing in your
future success. If you don't think this way you will never have a prosperity mindset. You have a poverty mindset. If
you don't have the right mindset- you won’t be successful
You can't look at it as what does it cost? What will it cost if you don't do it? What success have you achieved by
doing what you have been doing up until now? Do you want more of the same or do you want to step up?
Lottery winners are broke in 3-5 years and are living on their paycheck. They don't have the right mindset. What
about your mindset? When I read about everyone losing his or her job, I am so glad that I don't have to rely on a
boss to determine my future. I am the master of my own fate. I know that the real estate knowledge that I have will
always allow me to make money- no matter what. . I have started over in 4 cities and made money every time.
These are skills that anyone can learn and apply. This is the era of the entrepreneur. Don't you want to be in a
position to have the financial and mental freedom that being your own boss gives?
Real estate can bring that and more. This is going to be the greatest opportunity you will ever have in your lifetime
to have the life style you deserve. When you read this, I will be playing golf. That's the beauty of real estate. I set my
own life!!! The author is the President and Founder of REIC of LA. Reprinted by Permission from the R.E.I.C. of L.A. News.
April 2016. Published by the Real Estate Investors Club of Los Angeles. Phone: 310-792-6404 Visit www.realestateclubla.com
REHAB 101
Smelly Toilet Repair
Author Unknown
Q. My downstairs toilet sometimes doesn’t flush properly and emits an odor that smells like rotten eggs.
I’ve replaced the toilet, and it still acts up sometimes. I’m thinking I might need to call a plumber to run a
snake rom the main line outside to the inside of my house. What could it be?
A. This could be a tricky one. As far as the smell goes, I would first look at how well the toilet is seated to the floor.
If the wax seal is allowing air into the room, you will get a smell like you are describing.
What else is in the bathroom? If there is a lavatory or shower that doesn’t get much use, you might just have a dry
p-trap causing your smell. Being that it is in the basement, you should check any floor drains that might be dry also.
The toilet not flushing properly can be a couple things. A lot of the 1.6 gallon flush toilets just don’t flush very well,
especially inexpensive ones. If you have one of these toilets, you will have clogging and slow flush problems. If you
replaced it with another poor flushing toilet, you will have the same problem. Any plumber can recommend brands
of toilets that work well, based on their experience in the field. I find that Toto toilets perform well.
The problem could also be the line under the floor. Does it ever clog completely? If it does and you can plunge it
open, it is probably the toilet. If it just flushes slow, I would also be it is the toilet. A plumber can perform a flush
test on the toilet to get an idea what is going on and proceed to further if need be. That might be your best bet.
Reprinted Courtesy of Landlords of Johnson County, KS. Visit www.jocolandlos.org
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FINDING DEALS
The One That Got Away: Top 8 Reasons I Lose Out On Real Estate Deals
by Kevin Perk
Having been in the real estate business for a while now, there are many deals out there that I just did not get. As I
drive around, I come across some of those deals from time to time, and almost every time I feel a sense of regret
and mentally kick myself. I’ll say to myself, “That should be one of my properties.” Or, “I should have bought that
one.”
Honestly, seeing those properties makes me a bit angry with myself, but being angry serves no purpose. So I try to
let those properties serve as little reminders to myself for what I did to lose those deals and what to do next time a
potential deal comes along. So why did I not get those deals? There are, I think, several reasons.
The Top 8 Reasons I Lose Out on Real Estate Deals
My Offer Was Too Low
This is of course the obvious answer. Why was my offer too low? It was not for me. But perhaps the seller had
unreasonable expectations. Or other buyers could have outbid me, either due to ignorance or the ability to make the
deal work on a smaller margin. In the future, I need to see where I can cut costs and streamline processes to make
my business more efficient and cost effective to perhaps make more appealing offers.
I Did Not Listen to the Sellers
And because I did not listen, my offer likely did not give the seller what they wanted. Every seller wants money, but
there are other things a seller might want or need. They could need time to get their affairs in order. They could
need a way to move their stuff. They might want a new vehicle or boat, or even a trip to Paris. Listen to your seller,
find out what they need and solve their problem. If a trip to Paris makes the deal work, then book it!
I Did Not Educate the Sellers on the Value of Their Property
Sellers often have unreasonable expectations of the value of their property. They may not understand the current
market. They may have been lied to by an unscrupulous real estate agent so they could get a listing. They may
remember the property when it was nice and new and not be aware of its current condition. A little education here
can go a long way.
I am not afraid to show a seller my numbers, comps and pictures to help them understand where I am coming
from. Sometimes it helps; sometimes it does not. Sometimes I will get the deal after some time has passed and the
seller has let reality sink in.
I Was Focused on Other Things
This could mean that I was focused on other properties, on a current project, or perhaps on even going to a Tigers
basketball game. Whatever the reason, I have learned when a potential deal comes along, you need to refocus
yourself and look at the potential deal.
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I Was Penny-Wise & Pound-Foolish
I was painting when I should have hired painters. I was fixing a sink when I should have hired a plumber. I thought
I was saving money, but in reality I was so busy, I did not have time to focus on the deals. So was I saving money? I
was saving pennies for sure, but losing pounds on missed deals.
Did Not Follow Up
Potential deals can come onto your radar screen with relative frequency. The trick is to keep them there. Sometimes
a seller is just testing the waters. They want to sell, but they do not want to make a mistake either. So they make a
few calls and respond to a couple of letters. It can be hard to tell how motivated a seller is sometimes, so you have
to follow up. A simple letter or phone call may just be the extra push you need to get the deal.
I Did Not Have The Money/Resources Lined Up
Deals seem to come in bunches. When they do, you can very easily find your money sources dried up or your
contractors too busy. When you get in that position, you may find yourself having to say no. Think about what you
would have needed to do to say yes.
I Was Scared
This was true when I was new to the business. I was scared to say yes too many times. I was scared to say yes even
once. There are a lot of zeros attached to real estate prices, and fear is normal when starting out. Hindsight is,
however, 20/20, and I do kick myself for being scared. So don’t wait to buy real estate, as a friend of mine says. Buy
real estate and wait.
Who Knows?
Who knows what the reason is. Perhaps I did not build the right rapport with the seller. Perhaps they liked the other
buyer better because he could talk UT football better than I could. Perhaps my timing was off. Who knows? The
point is there could be a myriad of reasons, and you may never know what the real reason is.
Whatever the reason, however, do not get discouraged. There is always another deal out there. Let the one that got
away serve as a reminder to keep making your business and yourself better.
Copyright © 2004-2016 BiggerPockets Inc. All Rights Reserved. Reprinted by Permission.
Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real
estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past
president and vice-president of the local REIA group, the Memphis Investors Group.
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BEGINNER’S CORNER: FINDING DEALS
Sixty Days to Your First Bargain Purchase
by William Bronchick, Esq.
Finding good real estate deals is an art that takes time to master. Like any business, customers are what drive it.
Your primary customer is the seller who is motivated to sell below market value. Finding motivated sellers requires
advertising, marketing, salesmanship, and, like any business, keeping your nose to the ground.
Nothing happens and nothing matters in real estate until you find a deal. You cannot put together a deal without a
motivated seller and you can only convince a motivated seller to do something creative or that involves a discounted
price. A motivated seller is one with a very good and pressing reason to sell below market.
The most common problem new investors face is finding bargain properties. Many who start out in real estate
investing quit without ever buying their first property. They go through the motions of looking for deals for a few
weeks or months and then decide it doesn’t work. They forget that finding motivated sellers is similar to the
salesman finding his first customer... it takes persistence and hard work.
Find the Motivated Seller
At the cost of sounding redundant, the concept is simple: find motivated sellers that are willing to sell their
properties at a discounted price or “soft” terms. Currently, the real estate market in some parts of the country is hot,
hot, hot! Many people are complaining that the strength of the market precludes investors from finding deals on
properties. The popular misconception is that in a rising market, even the most motivated seller can find a buyer for
his property at full market price.
The truth is, you can find deals in ANY market. Real estate legend A.D. Kessler once said, “There are no problem
properties, just problem ownerships.” The definition of a motivated seller fits squarely within Kessler’s idea. A
logical person knows that time, money and effort can solve virtually any real estate problem. However, some people
are too emotional about their real estate problems or have other motivating issues to deal with.
Some of these issues include:
Divorce
Lack of concern
Inexperience with real estate repairs
Time constraints
Death of a loved one
Job transfer
Landlording headaches
Impending foreclosure & other financial problem.
Farming Neighborhoods
Successful real estate agents utilize a technique called “farming” to increase their business activity. They pick a
neighborhood or two and focus their marketing efforts within that area. You should try the same technique. Start
with a neighborhood that is relatively convenient for you.
1. Drive the Area
Spend a few weekends driving around the area. The goal for you at first is to learn about the area, the style of
houses and the average prices. Over time, you may expand your farm area, but stick with areas that contain the type
of homes you plan to purchase. It is not necessary to begin your investment career by learning every square mile of
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a large metropolitan area; it is important to learn the value of “typical” homes in your target areas. This knowledge
will enable you to make quick decisions about whether a particular prospect is a bargain.
2. Attend Open Houses
Visit open houses and “for sale by owner” (FSBO) properties on weekends. Speak directly with owners and their
agents. Pass out your business cards. Make friends. Word of mouth and referrals are a big part of any business.
Part of the process of finding a deal is to know how to recognize one.Take a good look at the property and its
physical features. After viewing a couple of dozen open houses in the neighborhood, you will get to know the value
of the properties and the different styles of houses. When someone calls you about a house in that area, you will
know the value by its description.
3. Look for Ugly & Vacant Propertiees
While you are driving around neighborhoods, look for vacant, ugly houses.How can you tell if a house is vacant?
Look in the window! Of course, this practice may get you shot, bitten by a dog or arrested. First look for the
obvious signs of vacancy – overgrown grass, no window shades, boarded windows, newspapers, garbage, mail piled
up, etc.
If you are not certain whether the property is vacant, knock on the door. If the owner answers, be polite, respectful
and ask if he is interested in selling. In many cases, it may be a rental property, so ask the occupants for the name
and telephone number of the owner.
If the property is vacant, ask the neighbors if they know the owner. Most neighbors are helpful, as they know
“ugly” houses hurt their own property values. In addition, ask the mailman — they know all of the empty houses on
the block. Leave a business card and write down the address of the ugly or vacant properties. When you get home,
look up the name and address of the owner. Finding the owner of a vacant house can be difficult, which is why the
persistent people who find the information make the most money. The name of the owner can be found by calling
your local tax assessor’s office or by looking up the deed recorded with the County land records.
If you want to contact the owner, it takes a little more digging.
Try speaking with the neighbors or asking the post office for a copy of a change–of–address form on file
for the property.
Online services, such as www.infousa.com, will search public databases, such as the Driver’s License Bureau
and the Department of Motor Vehicles.
Some cities, towns and counties will “tag” a house with code violations. This is often a sign of a neglected or
vacant property. Ask your city if you can obtain a list of such properties or find where this information is
publicly recorded.
The above article is an excerpt from the author’s Home Study Course: “Flipping Properties.”
Reprinted by Permission. Visit www.legalwiz.com or call 1-888-587-3253. The author, CEO of Legalwiz
Publications, is a nationally known attorney, author, entrepreneur and speaker. He has been practicing
law since 1990, having been involved in over 700 transactions.
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TAXES
Documenting Business Expenses Adequately
by Charles Perkins November 13, 2010
Are you adequately documenting your business expenses? There are several regular expenses that often don’t get
documented very well. These are vehicle miles, meals, entertainment and business travel. In this post we’ll look at
important factors when documenting business mileage. An overall consideration is that expenses must be ordinary
and necessary to the operation of the business.
Auto Expenses
Total Miles
Mileage is the one deduction that many seem to have the most trouble with. You want to note your odometer
reading at the end of each year so that you know how many total miles were put on the vehicle. This is an important
starting point.
Business Mileage
Whether as an employee, contractor or business owner many of us incur business mileage. It’s important to find a
systematic way of recording these miles. Very often a vehicle is used both personally and for business. There may
even be commuting miles to track.
All business expenses must be reasonable necessary and clearly serve a business purpose. When documenting
mileage you want to keep this in mind.
Documents you should keep
How you document your miles is up to you. I use a day planner. This is a convenient way to note the business
activity (client meeting, pickup supplies, sit visit, etc.), who was involved, where it occurred. When it is a regular
client, it is sufficient to have my accounting records to support that location. If possible write odometer readings.
Otherwise keep track of the total mileage. For those that get busy, you can go on the internet later and use any map
program to find out the mileage between destinations.
Supporting Information
If you decide to use a day planner this will become part of your tax records that you will need to keep. You may still
want to summarize this on a spreadsheet or in your day planner. By summarizing this data you can save yourself
time and money later on your taxes. I generally summarize weekly and monthly while it is still fresh. Never know
you might forget something during a hectic day. If all your days are hectic, you better get in the habit of
summarizing at the end of each day.
Meals and Entertainment
There are several elements that must be established in order to have a legitimate meals and entertainment expense.
These are the amount, time, place, business purpose and relationship of the parties involved.
A Business Log
The main way to establish that all of these business elements are met is by using some type of log or journal.
Common journals might be a diary, day planner, an account book of some kind, or other similar activity log. I
generally use a day planner for this purpose which also assists me in time management. You can use whatever form
of journal makes sense in your business. The important point here is keeping track of all these expenses noting all of
these elements (amount, time, place, business purpose, parties involved).
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Supporting Evidence
You also will need to keep documentary evidence of the business meals and entertainment expenses. Adequate
receipts include:
•
•
•
•
Canceled checks
Credit card slips
Cash register receipts
Credit card statements
There are some exceptions. One is that if the cost is less than $75 for meal or entertainment expense, then
no receipt is required. Still a good idea, but not required.
Travel Expenses
Travel expenses can be deducted when they satisfy a legitimate business purpose and meet the ordinary and
necessary test.
Legitimate Business Purposes
The type of business you are in makes a difference. Here is a short list of purposes that may be ordinary and
necessary in your business.
1) Meeting with existing and potential customers, suppliers or other business contacts
2) Continuing education, association meetings, conferences, trade shows and other trade activities
3) Meeting to discuss potential investment deals
4) Speaking engagements
5) Attending shareholder meetings
6) Meeting the publisher of your book
7) Taking photos for your marketing pieces
Documenting your Travel
You will want to keep copies of receipts, but I generally will keep a file as well. In the file I keep copies of
meeting outlines, agenda lists, notes, a log of hotel, rental car, meals and entertainment used during the trip.
I use this file also to help me decide if this trip might be worth doing again.
Supporting Evidence
You also will need to keep documentary evidence of these business meals and entertainment expenses.
Adequate receipts include:
•
•
•
•
Canceled checks
Credit card slips
Cash register receipts
Credit card statements
More information is available on the IRS website
Charles G. Perkins, CPA - Specializing in helping small business owners succeed. Located in Seattle, WA
Email: [email protected] Reprinted by Permission. Copyright © 2004-2014 BiggerPockets
Inc. All Rights Reserved.
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SELLING STRATEGIES
Selling In A Down Market: What Can I Do?
by Wendy Patton
[Editor’s Note: Although this article was written for realtors®, many of the concepts will also be helpful to
investors.]
It’s in the news day after day about how bad the real estate market is across the country. Available supplies are
rising, builders are cutting back, foreclosures are skyrocketing, the sub-prime mess, prices are dropping, etc. This
makes it a difficult time for real estate agents to survive. More and more listings just sit on the market and never sell.
If you are a buyer’s agent finding qualified buyers is no easy task, they are few and far in between.
This is a time to get creative. Down markets are buyer’s markets, meaning your listings are competing for the
smaller pool of buyers who have a large inventory of housing to choose from.
We hear about making sure your listing is priced competitively and it is well staged. These things certainly can help.
However, often they aren’t enough. The reason is that you are still competing for the same small pool of buyers as
everyone else. If you really want to get your listings sold, or as a buyer’s agent attract more buyers, you need to
expand the pool of buyers. What I mean by that is that the existing pool of conventional buyers is comprised of
people who want to buy now and can qualify for a mortgage now.
We all know that the extreme tightening of the lending industry has made it much harder for prospective home
buyers to qualify for mortgages. If you really want to sell your listings or get more buyers you need to expand your
pool of buyers to include those people who want to buy a home but can’t qualify for a standard mortgage at this
time. This pool is actually much, much larger than the pool of buyers who can get a mortgage right now.
Think about it. As a buyer’s agent how many times have you turned away a potential buyer because they couldn’t
qualify for a mortgage? As a listing agent how many of your listings have just languished on the market never
finding a buyer because of the competition?
Wouldn’t you have liked to get paid for a few of those?
Who are some of those buyers?
•
•
•
•
Buyers who have moved from one area and are still trying to sell their old home and can’t qualify for two
mortgages,
Someone who is going through a divorce and their existing home is tied up,
A buyer whose credit is bruised,
A buyer whose credit isn’t established enough yet to qualify for a mortgage,
just to name a few!
In order to survive and even thrive in down markets you need to get creative. Don’t hold out for just the
conventional buyers when there is so much more out there. In this article we will look at several choices you, as a
Realtor®, can offer both your buyers and sellers:
•
•
•
•
Seller Carryback
Land Contract
Lease/Option or Lease/Purchase
Mortgage Assumption
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Let’s take a look at some of the more creative methods you can use to reach a larger pool of buyers.
Seller Carryback – aka Seller Holdback or Seller Second Mortgage
Seller Carrybacks bridge the gap between conventional financing and more creative seller financing. In this case the
home buyer can qualify for a mortgage but not for the full amount. They may be able to qualify from 70% to 90%
of the purchase price. To cover the difference the seller must give the buyer a second mortgage covering the
remainder, which is fully disclosed to the primary lender. The Seller is essentially acting as a bank offering an
additional mortgage. The terms of the second mortgage are entirely negotiable.
In the case of the Seller Carryback, the sale of the property and transfer of the deed is completed. This allows the
buyers to get their principal mortgage at the time the Seller is providing the second mortgage. There are several
advantages to this. By completing the sale the buyer is the new owner of the property, freeing the Seller from the
responsibility of taking care of that home. Additionally, if the Seller has equity (beyond the amount of the second
mortgage being offered) he/she will get paid that equity. The disadvantages to this are:
1. Should the buyers default on their loan for some reason, the Seller would have to foreclose and
2. The Seller must actually have equity in his/her home so that when the buyers purchase their home, the buyers’
first mortgage is enough to pay off the Seller’s existing mortgage and hopefully cover real estate commissions.
As I mentioned, the terms of the second mortgage are entirely negotiable. That means the interest rate, the
frequency of payments, the rate at which the interest compounds (yearly, monthly, daily, etc.), whether the payments
are principal and interest or interest only, whether there is a balloon payment, and the duration of the loan are all
factors that can be set with the buyer. These terms should not be taken lightly either, as they can substantially affect
your seller’s profit or your buyer’s costs by negotiating favorable terms.
Although all of these terms may sound a bit intimidating, fear not, you don’t have to resolve them on your own. As
agents we mainly fill in the blanks when it comes to contracts. Talk with your brokerage’s legal representation to
help you with the loan documents and terms. This gives you good CYA (Cover Your, you know what) which is
crucial as a real estate agent. We don’t want to create liability. Plus using the attorney can help your client by setting
favorable terms and protect them with proper documentation. If you are a listing agent I DO NOT recommend
allowing the buyer’s loan officer to set up the second loan! Remember, they work for the buyer. They will be doing
their best to make sure the terms favor the buyer and not your client.
To help you understand how important it is to get favorable terms for your client, let’s take a look at a variation in
just a single term, the interest rate. All other terms being equal, let’s assume a seller carryback of $25,000, amortized
over 30 years but with an 8 year balloon – this means the interest is based on a 30 year time table like a conventional
mortgage, but the buyer will have to pay the balance after 8 years, usually by refinancing. If the interest rate is set at
8%, over the 8 year period the buyer would pay a total of $15,364.77 in interest on the loan. If the interest rate is set
at 8.5% the buyer would pay $16,381.76 in interest. That’s just over $1,000 in additional interest for just a ½%
increase in interest rate.
Real estate agents may not receive all of their commission upfront with a Seller carryback. It will depend on how
much equity the seller has left after carrying the second mortgage. If they do not have enough equity you would
need to work out a payment plan.
There are a couple of important things to keep in mind when doing a seller carryback transaction. The first is that
the primary mortgage lender must be fully aware that the seller is providing a secondary mortgage. Failing to
disclose this constitutes fraud. Definitely not something we as agents want to be implicated in. The reason for this is
banks lend based on what they feel the borrower can handle based on the value of the property.
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If they are willing to loan 80% of the value of the home and permit a second mortgage for 15%, requiring the
borrower to put 5% down, that is the most the bank feels this borrower can afford. If they are only willing to loan
80% of the value with NO second mortgage, it’s because they feel the borrower cannot handle the additional
mortgage. If the seller provides that mortgage anyway, you are violating the terms of the first mortgage.
The second thing you need to keep in mind with a seller carryback is another type of fraud. It’s the forgiven loan
scheme. It works like this: The buyer is approved for, let’s say, a 90% mortgage. The buyer, their loan officer, or
their real estate agent, might ask your seller to take a 10% second mortgage, but they adjust the purchase price up to
cover all or part of that 10%. They disclose to the bank that the seller will provide a 10% second mortgage, but as
soon as the sale is complete the seller forgives that 10% second. In other words, they accepted the 10% second but
had no intention of ever making the buyer pay it. What this effectively does is make the buyer’s 90% first mortgage
a 100% first mortgage instead. Make no mistake, even though the second mortgage is being disclosed it is still fraud.
Fortunately this one is harder to pull off now because appraisers don’t have nearly as much fudge room as they used
to.
Both of these types of fraud are very rare, and most likely you won’t encounter someone who asks you to do it.
However, I want to make sure you are aware of them because no matter how badly you need that next commission,
it’s not worth committing fraud.
Land Contract aka Contract for Deed
Land contracts are essentially 100% seller financing. In this case the buyer will not be getting any other mortgage
except the financing the seller is providing. Land contracts can be structured 2 different ways:
1. The seller can either close on the property with the buyer and convey the deed to them and the land contract
exists as financing on the property or
2. they can set the land contract in place and the deed isn’t conveyed until the buyer pays the land contract off,
either by refinancing down the road or by paying the balance in full.
If you represent the seller it is to their advantage to do the second, where the seller retains the deed until the buyer
pays off the land contract. If you represent the buyer the first option is better.
You may have heard that in order to sell on land contract the home must be owned free and clear. This is not 100%
true. In some cases, the seller’s existing mortgage may have a “Due on Sale” clause. By conveying the home on a
land contract with a mortgage the bank has the right to invoke the “Due on Sale” clause. However, it is VERY,
VERY rare that a bank will invoke this clause as long as payments are being made. This is especially true in down
markets where foreclosure rates are high.
However, as a real estate agent you definitely want to clear this with your office’s legal counsel BEFOREHAND.
You definitely do not want to create liability. Your legal counsel may, as a minimum, insist on having additional
disclosure and liability waivers signed as well as receive approval from the lender.
Like a seller carryback the terms of the land contract are completely negotiable. All of the terms I mentioned in
seller carrybacks apply here. I also strongly encourage you to make use of an attorney when it comes to setting the
terms of the land contract and completing the paperwork. In some states title companies can assist with these
documents.
As we know, traditional closings can be very costly in terms of closing costs, especially for the buyer who has to pay
loan origination fees. An advantage to selling with a land contract is that most of these fees don’t apply, saving
thousands of dollars in closing costs. This means that the buyer can either put this money towards a down payment,
or for the buyer whose funds are more limited, they are still able to get into the house when they might not
otherwise be able to do so.
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A land contract results in the conveyance of the property. Because of this the buyer is actually a buyer and not a
tenant. This gives the seller the advantage of putting someone in their home that has a buyer’s mentality not a
tenant’s. They are much more likely to take care of the house and be responsible than the average tenant. The
disadvantage to this is if the buyer should stop making payments for some reason, in most states, the seller cannot
simply evict them. They will either need to follow forfeiture procedures or foreclosure procedures, both of which
cost more in time and money than a standard eviction.
On a land contract the seller can also “wrap” their mortgage. For example, if the seller is paying 5.5% interest,
he/she might be able to charge 8% or more to the buyer. Even without much of a higher price on the home (which
is great for sellers with little equity), you have the spread between 5.5% and 8.0%. On $100,000 of a loan balance, it
would mean $2,500 per year in interest payments in the seller’s pocket! That’s 2.5% difference in interest on
$100,000.
Land contracts hold a big advantage over seller carrybacks in that you are able to market to a much larger pool of
buyers. With the seller carryback the buyer is still qualifying for a mortgage for most of the cost of the property, but
the land contract reaches out to someone who is currently unable to get a mortgage, which greatly increases the
buyer pool.
In the case of a land contract you might receive part of to all of your commission upfront if the buyer is able to
front a down payment. Otherwise you would probably need to work out a payment plan with the seller where your
commission is paid in installments over time.
Lease/Options and lease purchases are probably the most creative forms of seller financing and are particularly
effective for selling homes in a down market. In both, the buyer is leasing the property from the seller for a period
of time and at the end of the lease period they can buy the home for a pre-set price. In the case of a Lease/Option,
the buyer has the right to purchase the home, although if they don’t they would forfeit their option fee. In the case
of a Lease/Purchase the buyer is obligated to buy the home at the end of the lease period. Obviously as an agent
representing the seller, the Lease/Purchase is more desirable. Despite being more desirable, however, it is more
limiting which doesn’t always make it the best choice in a down market. You must make sure that if the buyer signs
a lease purchase they can actually get a mortgage down the road, otherwise the seller will be suing them in court for
specific performance (not a good experience).
Unlike the seller carryback and land contract, the seller is not charging interest on a loan, the tenant buyer is,
instead, paying rent. One of the negotiable terms of the Lease/Option- Lease/Purchase contracts is whether any of
the rent will apply as a credit towards the purchase price, otherwise there is no principal pay down.
With Lease/Options and lease purchases the seller has a landlord-tenant relationship with their buyers until they
actually purchase the house. This bears some advantages and some disadvantages. While the buyers are tenants, they
do not have the typical tenant mentality. Their intention is to buy the house. As part of the Lease/Option or Lease/
Purchase contracts they pay an option fee, which applies against the purchase price when they buy, but it is nonrefundable if they don’t. This money helps keep them motivated to become home buyers. However, because they
are tenants, during the lease period the seller will be responsible for repairs on the house, except of course for
damage done by the tenants.
One of the main advantages to having the landlord-tenant relationship during the lease period is that if the tenant
stops paying rent the seller can evict them. The reason is in Lease/Options and Lease/Purchases the seller retains
ownership of the house until the buyer actually exercises the purchase agreement. While evictions are rare, they are
definitely advantageous because they are much less costly and much quicker than foreclosure or forfeiture.
Additionally, if a seller is forced to evict they still get to keep the option fee.
The terms of Lease/Options and lease purchases are different than mortgage-based seller financing. Instead of
negotiating interest, amortization and the like, they are negotiating things like:
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* the length of the lease,
* the amount of the rent,
* the amount – if any – of the rent applied against the principal,
* whether extensions will be permitted
* how much, if any, the purchase price, option fee and rent will increase for an extension period.
Like land contracts, Lease/Option and Lease/Purchases are truly offering the home to the largest possible pool of
potential buyers. Offering this kind of flexibility is the most effective way to sell in a down market.
As a real estate agent, typically you would receive a portion of your commission upfront paid out of the option fee
and the remainder when the buyer actually completes the purchase on the home.
Mortgage Assumption
Mortgage assumptions are much more limited, but can be a useful option for down markets. Instead of obtaining a
new mortgage the buyer assumes (takes over) the seller’s existing mortgage. Depending on how much equity the
seller has in the property it may be necessary for the buyer to either make a down payment or for the seller to offer
a second mortgage.
The reason that mortgage assumptions are more limited is because of the qualifying criteria that must be met. First,
the existing lender must be willing to let a new buyer assume the mortgage. Most mortgages are non-assumable,
however, given the challenged market conditions many areas are experiencing this may be negotiable with the
lender. In order for the buyer to assume the mortgage, however, they must be able to qualify. The lender will not let
just anyone assume it. If the buyer can qualify for the existing mortgage they can likely qualify for a new mortgage as
well.
There are a couple of reasons a buyer might want to do a mortgage assumption versus just getting a new mortgage.
First, the terms of the seller’s existing mortgage, such as interest rate, may be much better than the buyer can get on
a new mortgage. If you remember from our above example, just a ½% rate differential on a much smaller loan can
make a difference. The other reason a buyer would want to assume a mortgage is because it can save them
thousands of dollars in closing costs. The advantage of this to the seller, is that is means the buyer can put more
money down when buying, or it allows them to buy when they might not otherwise have been able to.
Mortgage assumptions are much like seller carrybacks for real estate agents when it comes to getting paid their
commission. If the buyer can afford a down payment you may receive some commission upfront. Otherwise you
may need to structure a payment plan with the seller.
When working as a real estate agent in a down market it is critical to reach as many buyers as possible, whether
listing homes or acting as a buyer’s agent. The typical pool of buyers is limited to those who can currently qualify
for a mortgage. By offering creative solutions you are able to reach far more buyers than your competition,
especially using Lease/Option, Lease/Purchases and land contracts. This allows you as an agent to do far more
business than if you just did conventional sales.
Being a real estate agent in a down market can be tough. By utilizing some of these creative financing potential
buyers and as a listing agent your listings will reach a larger pool, helping you get homes sold. This means more
sales and more commissions, allowing you to not only survive in a down market but actually thrive. Reprinted by
Permission. Copyright © 2010. All rights reserved. The author is widely recognized as one of the most inspiring
speakers on “Little or No Money Down” real estate investing. Her real estate savvy and great depth of experience and
knowledge has helped her in orchestrating the most complete and easy to follow Lease Option Program in circulation.
Visit www.wendypatton.com
Volume 19 Issue 10
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OPTIONS
The Easiest Option Deals
by Jackie Lange
When I first got started in 1995 I didn't know anything about real estate or investing. My husband and I had bought
a few houses to live in (used a realtor, paid full price and got a loan) but that was the extent of my real estate
knowledge. I was not sure how to determine the value of a house, how to estimate repairs, how to negotiate, or
where to get started to avoid risks.
I bought a course from one of those late night infomercials but their strategies seemed WAY too risky so I didn't
take action on anything they suggested. They taught you how to buy houses below market then pull cash out at
closing when you get financing. I doubt that you can even do that anymore. The result was that you'd owe more
than the house is worth the day you bought it.
I didn't have any money to attend seminars to learn what to do so I hit the public library and read
everything I could find about real estate investing. There was a lot of conflicting information. It felt like I
was being pulled in a lot of different directions. One book would tell you one thing and a different book
would tell you the exact opposite.
Back then, I didn't know Jack Miller or Peter Fortunato. There was no www.CashFlowDepot.com where I could
learn everything I needed to know from the comfort of my home for one low price. But I didn't let any of that get
in the way of my dream of being self-employed and financially independent.
Because I'd been a stay-at-home Mom for 12 years and had no college, the chances of me getting a job making
more than minimum wage where slim to nothing so I had to find a different way to make the kind of money I
wanted to make and create the financial security I needed.
When you want something bad enough, you should find a way to make it work - mo matter what. Because I was so
naïve, I knew that actually "buying" a house could be a big (and potentially costly) mistake. I was not willing to risk
our family savings on a bad mistake. But I was determined to learn how to make money with real estate.
So, after a lot of research I decided that wholesale option deals were the safest thing I could do. From what I'd read
about option deals, you got paid quickly so that sounded like just what I needed. With a whole sale deal, you find
old run down and usually vacant houses, get a contract on it with a contingency clause ( that makes it an OPTION),
then sell your contract to someone who will buy the house and fix it up.
The typical turn around time was 7 days from the day I wrote a contract to the day I got paid. Because I didn't have
money for marketing, I just got in my truck and drove around to find run down houses. Then I'd look up the owner
in the County tax records and send them a postcard. Postcards were cheaper than letters and that's why I sent
postcards. The calls started coming in right away.
A typical deal in Dallas was a house worth $90,000 fixed up. I'd get a contract for $30,000 and sell the contract for
$5,000. At first, I'd find the house then look for a buyer by calling all the "We Buy Houses" ads in the newspaper
and Thrifty Nickel. I was able to sell every contract I got within a few days. Sometimes my profit was as little as
$500. The average profit was $3,000 - $5000. And sometimes I made as much as $20,000 - $30, 000 ON ONE
DEAL - IN ONE WEEK.
Keep in mind that the profit was on a house that I didn't buy and I didn't fix up. I quickly learned that it was better
to find the buyers first, determine where they wanted to buy, and then go find the deals. I was basically an order
taker for my buyers.
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It's important to have a lot of buyers lined up. If you only have one person to sell to and he/she knows it, you'll
make less on each deal. But the bigger danger is that you'll call your buyers with a deal and they will say they can't
buy any more this month or they are out of money.
The more deals I did, the more money I made but there were only so many hours in the day to go find deals. So, I
recruited the moms from the Mother's Day Out program at a church to help me find deals. My deal volume
instantly doubled. The mom's would get paid $500 at closing for any deals they referred to me. My first year in
business, I did 40 wholesale options deals! Do the math!
The biggest advantages of wholesale option deals are:
(1) you don't actually buy the house. You don't need money. You don't need credit to get a loan. You don't do any
repairs.
(2) You get paid FAST!
(3) If you can't find a buyer, you simply tell the seller that you could not find a partner and you get out of the deal.
You're never stuck with buying the house.
(4) With every deal, you improve your negotiating skills.
(5) You learn more about determining property values and repair costs with each deal.
All the above skills will serve you well when you actually do decide to buy a house. So, wholesale option deals are
like getting paid to learn more about real estate investing.
Wholesale Option deals are a great way to get started:
*Options remove any risks.
*Options are the ideal strategy to use now. They are SAFE.
*Options are the fastest way to replace your income or increase your income.
*Options are not just for old run down houses - they apply to all types of properties.
One of Jack Miller's favorite strategies was to walk through a neighborhood and knock on doors asking people if
they wanted to sell their house. If they said yes, he'd get an option for 3-6 months.
Often the options were to buy the house subject to the existing mortgage. That made it easy to sell the Option
Contract quickly. The financing was in place - all the buyer needed was a down payment - which went directly in to
the Jack Miller Hip Bank.
There are so many ways to use Options. You can start simple - like I did with wholesale option deals. Or like Jack
Miller did by just knocking on doors. Jack rarely had a DAY that he didn't make at least $500 selling an Option
contract. Now, you can learn how to do Option deals too. Get started with Options the right way with Jack Miller's
Options courses at www.JackMillerOptions.com
I wish I had these courses when I got started. I know I would have made four times more money if I had them.
[Editor’s Note-to be continued in April 2011 Metro] Reprinted by Permission. The author is the founder of
www.ExtremeSuccessSystems.com and co-founder of www.CreativeRealEstateWorld.com. Visit www.CashFlowDepot.com or
call (972) 496-4500.
Volume 19 Issue 10
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LEGAL: RESEARCH THE LAW!
RESPA Rule 5B (and the Tooth Fairy)
by William Bronchick, Esq.
RESPA Rule “5b”. Do you know it? If not, you can get sued, go to jail and have your property condemned for up
to eighteen months by the Federal government.
Actually... I just made that up! Why would I play a dirty trick on you like that? To make a point – learn the laws
and the customs that are common to your real estate business, and make it a point to learn the difference between
the two. Too many people just “wing it” without learning the laws and the customary practices in their business.
Such an attitude can lead to lost profits, failed businesses, and unnecessary lawsuits.
Reliance on the “Professionals”
Most investors rely on advice from real estate brokers, title company representatives, and lawyers when it comes to
their real estate. Most so-called “professionals” do not know anything other than what was told to them by their
bosses, their colleagues, and from word of mouth. Like the game “telephone” in which each participant secretly
whispers a phrase or sentence whispered to them by the preceding participant, the end result is a hodge-podge of
half-truths and urban myths. Case in point, ask 10 real estate brokers if flipping is legal, and you get 10 different
answers.
Attorneys Aren’t Much Better
Surprisingly, most attorneys don’t know the law or misstate the law when you ask. An attorney’s answer is often a
knee-jerk “don’t do that” response because the attorney fears being sued for giving bad advice that might lead to
the client losing money. Challenge the answers you get from attorneys and ask for a citation of the law so you can
read it yourself.
Recently, I attended a closing at which it was demanded that I place my fingerprint in black ink on all the closing
documents. "Why?", I asked. "I don't know - our legal counsel said it is required," was the reply. "Let me speak to
your legal counsel," I demanded. The lawyer walked in the closing room and insisted, "It's now required by the
Patriot Act." "Really... which provision?" I inquired. He gave me a blank stare, then admitted, "Well, I was at a
legal conference last month and I was told it was their interpretation of the Patriot Act that all closing required the
fingerprint." Can uou see how things get twisted around so that people accept these things as legal gospel?
In short, you should seek advice of experts in areas where you are not sure. But, you should always question things,
research the law and know what it says. Don't take the "expert's" word for it - learn the law and be able to recite it.
Know the Difference Between Law and "Custom"
Many uninformed investors also accept what is customary practice without questioning it. For example, a title
company may say, "We can't do double closings... they aren't legal." The reality is, many title companies won't do
them for fear of potential fraud, but that is a company decision, not law. Ditto for many mortgage companies, who
insist on six or twelve months of seasoning before they will refinance a loan on a recently-purchased
property. Seven out of ten mortgage brokers will tell you that "nobody does it anymore," when in fact that's their
own reality in their own small world. In short, don't accept the answer you get from one person as "that's the way
we do things." Challenge the professionals you do business with to make an exception for you, or take your
business elsewhere.
In summary, learn the law, learn the local customs, and take the time to learn the difference. You will close more
deals, avoid more problems and have a leg up on your competition, 99% of which doesn't have a clue.
Reprinted by Permission. Visit www.legalwiz.com or call 1-888-587-3253. The author, CEO of Legalwiz
Publications, is a nationally known attorney, author, entrepreneur and speaker. He has been practicing law since
1990, having been involved in over 700 transactions.
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INVESTING PHILOSOPHIES
How I Made $3 Million In Seven Years
by Joseph Neilson
As my book Buy & Rent Foreclosures explains, in 2005 I needed monthly income and decided to invest in rental
houses. I had no interest in building equity, nor did I perform any work in the ensuing years to that end. How then
did I stumble on $3 million? The equity COMPOUNDED BY ITSELF over seven years as an unintended
consequence of my buying, rehabbing and renting houses.
"Life is a snowball. The important thing is finding wet snow and a really long hill." Warren Buffett
Consider my "hill" the market demand for well-located 4-5 bedroom rental houses. The wet snow is real estate's gift
of compounding appreciation, for the most part from inflation.
The following are the five steps I used to build monthly cash flow, which also compounded my equity into the $3
million: (1) Buying low - you immediately gain equity, (2) Rehab with $2 in "forced appreciation" for every $1 spent - gives
you a big-time hit in equity, (3) Inflation fuels annual compounding on a hard asset like real estate, (4) Monthly principal
paid from the mortgage payment increases your equity, (5) Substantial net income of an investment house increases its
value and equity.
Let's take these one at a time.
1. Buying Low
I buy foreclosed houses from banks (REO) that need a rehab. I make "ridiculous" offers and sometimes get
ridiculous buys. Buying low gives me instant equity.
You Make Your Money When You Buy
Purchase
Price
Appraisal
80,000
120,000
40,000
1250
800
450
212
238
B)
70,000
more #1)
130,000
50,000
1250
720
530
212
318 (33%
C)
60,000
more #1)
140,000
80,000
1250
640
610
212
398 (67%
D)
50,000
more #1)
150,000
100,000 1250
560
690
212
478 (100%
A)
Equity
Rent - PITI - GM - Expenses
= Mo. Net
One of the reasons #4 has higher equity than #1 is because it was purchased for $30,000 less. Another reason is its
higher net income.
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2. Rehabs with "forced appreciation"
Well-structured rehabs can give you $2 in "forced appreciation" for every $1 spent. The concept is to do those
aspects of a rehab (kitchen, bath, refinished hardwood, etc.) that will return 200% in "forced appreciation".
Caveat: I do not always reach the 2 to 1 ratio.
Examples: Purchase price
Settlement (2)
Rehab
Total Cost
A
B
$26,000
4,000
20,000
$50,000
$30,000
3,000
30,000
$63,000
Appraisal
Mortgage
Equity
90,000
(50,000)
$40,000
125,000
(65,000)
$60,000
Therefore:
Rehab A $20,000 x 2 = $40,000 equity or "forced appreciation"
Rehab B $30,000 x 2 = $60,000 equity or "forced appreciation"
3. Inflation’s Appreciation of hard assets such as real estate is an extremely potent force that
compounds its value year after year. Examples:
A) My parents purchased a home on Long Island in 1949 for $7900. Today Zillow estimates its worth at $790,000 100 times its original value in 64 years.
B) I purchase a New Jersey shore property in 1976 for $70,000. Today it's worth $1,000,000.
Let's follow one, five and ten houses purchased for $120,000 and assume the historical appreciation of 3.5% per
year will continue.
1 House
Inflation 3.5%
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
EQUITY GAIN
$120,000
$124,200
$128,547
$133,046
$137,703
$142,522
$147,511
$152,674
$158,017
$163,548
$ 45,548
5 Houses
Inflation 3.5%
$600,000
$621,000
$642,735
$665,231
$688,514
$712,612
$737,553
$763,368
$790,085
$817,738
$217,738
10 Houses
Inflation 3.5%
$1,200,000
$1,242,000
$1,284,470
$1,330,461
$1,377,028
$1,425,224
$1,475,106
$1,526,735
$1,580,171
$1,635,477
$ 435,477
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4. Monthly Principal Paid: Your mortgage payment is principal and interest. The principal paid is immediate
equity. For simplicity's sake I will assign $150 a month as principal paid or $1800 per year. I will also add $120 of
equity per house each passing year because as a mortgage progresses you pay more principal and less interest.
YEAR
1 HOUSE
5 HOUSES
10 HOUSES
1
2
3
4
5
6
7
8
9
10
PRINCIPAL
PAID IN
1800
1920
2040
2160
2280
2400
2520
2640
2760
2880
$23,400
9000
9600
10,200
10,800
11,400
12,000
12,600
13,200
13,800
14,400
$117,000
18,000
19,200
20,400
21,600
22,800
24,000
24,200
26,400
27,600
28,800
$234,000
It's "FORCED SAVINGS" - Really quite beautiful - all paid by the tenant.
5. Substantial net income increases value.
A) House A nets $1000 annually
B) House B nets $3000 annually
C) House C nets $6000 annually
D) House D nets $10,000 annually
Using any method (ROI, CAP rate, cash on cash %) of estimating an investment asset's value, the higher
netting asset is worth more. Sometimes a lot more. As an investment vehicle, House "D" is worth ten
times House "A".
I am an "Accidental Millionaire" as I did nothing to accrue the $3 million other than purchasing, rehabbing and
renting houses for monthly cash flow. I will note, however, that I did not "flip" or sell them, because I wanted the
monthly cash flow AND they will consistently compound with inflation in the future. Neither should you ever sell.
If you need money, refinance, because it's tax free.
The bottom line of making millions: Own assets that compound in value year after year without you doing anything
- or as little as possible. Make money while you sleep, vacation or watch your favorite team lose on TV.
Reprinted by Permission. Visit www.therealestateprofessorbaby.com
Volume 19 Issue 10
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FINDING DEALS
Due Diligence Checklist
by Gregory Pinneo
Things You Would Like to Know Before Presenting An Offer To Purchase
THE HISTORY
-Last Sale Date?
-Last Sale Price?
-Arms length transaction?
-Listing history?
-Zillow history?
-Google history?
-Historical registry?
THE DIRT
-Topography acceptable?
-Tagged as sensitive area at city or county?
-Flood Plain?
-Soil Permeability?
-Landscape value?
-Timber value or liability?
-On site utilities? Permitted?
-Underground tanks or vaults?
-Sun, daylight, exposure?
-Irrigation and irrigation rights?
-High or low maintenance property?
-landscape maintenance?
-pool maintenance?
-exposure maintenance?
THE ENVIRONMENT
-Wind flow.
-Odors from environmental factors?
-Hazardous materials on site?
-Asbestos siding or ducting?
-Lead based paint?
-Leaking oil tank?
-Historical environmental concern?
-Retention ponds or vaults?
THE ZONING
-Current zoning?
-Neighborhood zoning?
-County / City comprehensive zoning plan?
-Grandfathered zoning?
-Shortplatability?
-Additional unit potential?
-Rezone potential?
-In the path of possible eminent domain?
THE NEIGHBORHOOD
-Neighborhood association? Dues?
-Neighborhood association leadership?
-Value / Nuisance considerations:
-Shopping
-Schools
-Busy Street?
-Airport noise?
-Police /Fire / Hospital proximity?
-Proximity to economic core / center.
-Detention facilities?
-Handicapped facilities?
-Industrial / commercial nuisance?
-Parks and recreation facilities?
-Demographic of neighborhood?
-Check of registered sex offenders?
-Felons on parole in area?
-Over 50 community?
-Momentum of neighborhood?
-Immediate neighbors.
-Pets? Noisy? Dangerous? Dirty?
-How long have they lived there?
-Condition of property?
-Personalities / Attitudes?
-Hobbies of immediate neighbors?
-Pedestrian traffic at different times of day?
-Community mail box location?
THE PERSONAL PROPERTY
-What comes with the property? Good? Bad?
-On site disposal problems?
-Dead cars / boats / trailers?
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THE TITLE / RIGHTS
-Easements?
-Conditions, Covenants, Restrictions?
-Water, mineral, air rights?
-Conditional use permits in place?
-Tenant leases?
-Utility leases?
-Community well?
-Inspections and testing up to date?
-Recorded options?
-Who is the legal owner?
-Liens / encumbrances?
-Open mechanic lien window?
THE STRUCTURE
-Building Inspection areas to be covered:
-Heating systems
-Electric panel and systems
-Plumbing systems
-Roof: Pitch, type, condition, engineering
-Fireplaces
-Siding
-Mold
-Windows
-Insulation value or lack thereof
-Rot, earth to wood, vapor barrier
in slab?
-Sump pump?
-Wall surface: plaster or sheetrock?
-Drainage systems: gutters, storm drains
-Original? Added on to?
-Architectural appeal?
-Improvements? Permitted?
-Utility bill history.
-Flowing floor plan?
-Garage / carport / on property parking?
-Unfinished areas that could be easily finished?
-Basement? Plumbing
THE NUMBERS
Assumable? Wrapable?
-Property taxes?
-Annual cost of insurance?
-Tax assessed value history?
-Maintenance / repair records.
-Comparable sales in area.
-Price per square foot?
-Underlying loan balance
-Rental role. How long? Last rent raise?
-Area rent comparables vs subject property rents.
-Option consideration received
-Rent per square foot?
-Replacement cost of structure?
-Estimate of deferred maintenance expense?
-Is the sale subject to capital gains? Estimate of basis?
THE SELLER
-Age?
-Education?
-Time in area?
-Roots?
-Emotional attachment to property?
-Sellers language?
-Desired end goal?
-Need urgency?
-Motivation for selling?
-Hobbies?
-Attitudes?
-Family?
-Politics?
-Religion?
-Soap box?
-How they process information?
-Causes?
-What has been the sellers financial benefit as owner?
THE ROMANCE FACTOR
-View?
-Quiet street?
-Privacy?
-Parks, bistros, cool stuff?
-Uniform neighborhood feel?
THE MANAGEMENT PLAN
-Existing management?
-New management plan?
-Existing management contracts to honor?
-Reliability of books and records.
-Out of state property watch considerations
Reprinted by Permission. The author’s personal portfolio has included the purchase of over 500 units in over 200
different buildings. In addition, he has conducted more than 500 brokerage negotiations. Visit
www.reachreturn.com, call (206) 550-4242 or email [email protected]
Volume 19 Issue 10
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LANDLORDING: TENANT SCREENING
How To Screen Tenants In Five Easy Steps
by John Nuzzolese
I always say that "95% of your tenant problems can be eliminated in the screening process." If you're like me, you
probably find it difficult to relax when you have vacancies. So getting it rented is the main idea, right? Well, from
now on, let’s say "getting it rented to a properly qualified tenant is the main idea."
Below is what I call The 5 Steps of Screening Tenants.
STEP 1: First Contact
From the very first contact with the tenant, the screening process has begun. Whether you are the landlord, real
estate agent or property manager, the same still holds true.
First Contact is usually by telephone*, so you need to ask the right qualifying questions in order to decide if you
should proceed to step 2. Advise customers of your up front rent and security deposit requirements and other
important facts regarding the rental that may help disqualify the prospect.
I suggest you make a list or prospect card of questions to ask and have it handy while you conduct your first contact
interview. For example:
Name:
Phone:
Reason for Moving:
# of People & Relationship to You:
Intended Rental Term:
Occupancy Date:
Pets:
Smoking:
Credit:
Landlord Reference?
* First contact can also be through an internet ad by email. This is becoming a more popular method of rental
advertising and I have found huge savings in rental advertising money. Here is a link to my Pre-screening Tenant
Prospect Card for internet ads, such as Craigslist or LPA Rental Ads, etc. Pre-screening Tenant Prospect Card
Please note that anyone who has a problem answering your questions (as long as you ask them politely), probably
will not qualify for your rental. Serious customers want to make a good impression on you and should be happy to
answer your questions. This process can save you and customers a lot of time and trouble.
STEP 2: Showing the Property
From landlords to real estate agents, we all have our own style in showing the rental. I think we all need to be aware
of certain telltale signs to watch for while evaluating your prospective new tenants.
1. Appearance. Is the prospect neat and clean? Did he or she make an attempt to make a good impression? In
most cases, an unkempt person keeps an unkempt lifestyle and home.
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2
3
4
5
Car. Does the prospect have a nice car? Is it clean? Although we can't judge people by their car, we should
take note of it along with other details.
Attitude & Manners. Does this prospect behave respectfully? Does he or she show indications of being
difficult to deal with in the future? Did the prospect wipe his or her feet when stepping into the house? Did
the prospect walk into the rental while smoking? You can learn a lot about people even before speaking to
them. Sometimes it helps to pay attention to details.
Criticizing the property. Are the prospects pointing out legitimate concerns, or are they trying to come up
with items to negotiate price?
Yes or No? Can the prospect make the decision now or will they have to think about it? If they know now
that they want your rental, did the prospect come ready to give you a deposit and fill out an application?
STEP 3: The Application Process
The first thing you need is a quality rental application. Let the applicant know that his or her application will be
considered along with others, and you will notify the applicant once a decision is made. Advise the applicant(s) that
it is very important to fill out the application as completely as possible. If you (and I recommend you do) run a
credit report on the applicant, I suggest you be sure to collect a screening fee. This is a provision in the The LPA
Rental Application.
Inform your prospective tenant that the application must be returned as soon as possible to avoid the risk of losing
the rental to a competing prospect.
Review and verify the application thoroughly and look for inconsistencies and "red flags." When you are satisfied,
you will proceed to approving your new tenant in step 4.
STEP 4: The Approval Process
This is usually a fun part, but keep in mind that you are still screening the applicant while preparing him or her for
the next step. I like to congratulate the applicant on being approved and let them know they came in first place.
Also, let them know if you made any special concessions just for them, such as overlooking minor credit infractions,
etc.
This process is also an opportunity for you to make sure the applicant can and will deliver. Set the time, date and
place for your lease signing. Instruct the applicant(s) to bring the proper amounts of monies, identification (if you
don't already have it), and how you prefer to be paid. (Check*, money order or cash) * Be sure to tell your new
tenants that possession or keys will be given only after checks have cleared.
STEP 5: The Lease Signing
It is very important that you have a quality residential lease. You'd be surprised at how many people would just
sign a lease without reading it! And I don't just mean tenants! I believe it is crucial to read the entire lease with the
tenants at a lease signing. It is your agreement with them. Shouldn't you both know what is really being agreed to?
As you read the terms of the lease with the tenants, you will be able to conduct your fifth and final step of
screening. Does the tenant argue on every item? Is the late charge an issue? And so on.
Of course, if you are unhappy with how your prospect responds to you and/or your lease, you must not rent to this
person. I believe: "It is better to have NO tenant than it is to have the wrong tenant."
Copyright © 2000-2012 The Landlord Protection Agency, Inc. All Rights Reserved.
Reprinted by Permission. Visit www.thelpa.com, email [email protected] or call (516) 483-4785
Volume 19 Issue 10
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LANDLORDING: TIPS
Ten Things I Wish I Knew Before Becoming A Landlord
by John Nuzzolese
Experience is a wonderful teacher, but wouldn't it be great if you could learn from the negative experience of others
who paid the price for you? I hope some of my tips come in handy for some of you!
1. Owning rental property does not automatically mean you will be able to consistently collect rent to make it
profitable.
2. Understand that being a landlord is a serious business, not a hobby. People who make this mistake usually lose
large amounts of money.
3. Don’t get your rental advice from people who are not successful in the rental property business.
4. Learn your state landlord tenant laws, mainly (https://www.thelpa.com/lpa/forms/state-lease.html )
o Lease notice periods, (we have these charts on our Free Landlord Forms page)
o Security deposit limits Security deposit return time
o Late fee limits
o The LPA has State Specific Lease forms to help landlords comply with local laws. So many landlords get
into legal trouble because they are unaware of the local laws. Also be aware of the laws against
discrimination. Google Fair Housing Laws
I always say "95% of tenant problems can be eliminated in the screening process" and
"The best way to avoid tenant problems is to avoid problem tenants"
5. My article “How to Screen Tenants in 5 Easy Steps” helps the beginning landlord understand the tenant
screening process. [see page 33 in this issue]
Also it is imperative for landlords to have access to tenant credit reports. "It is better to have NO tenant than it is to
have a bad tenant."
6. You can’t rent out junkie rental properties and expect a successful management situation. In order to attract
quality renters, you must offer a quality rental. Too many landlords are reluctant to invest enough in a property to
make it nice for the tenants because they are afraid it will just get wrecked up again. This is a mistake.
7. Location. Know where you want your rentals to be. Avoid bad neighborhoods, bad school districts, and low
income areas where you aren’t likely to find good paying quality tenants.
8. Have a real estate / eviction attorney lined up. So many landlords allow the tenant to fall behind in the rentextremely behind, simply because they are afraid to evict in court or of the attorney’s fee. Having an attorney ready
to evict can save a landlord thousands of dollars in lost rent and damage.
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9. Have a team of reputable repair people and handy-people ready to deal with issues as they come up on your
properties. Having relationships with them before the work is needed will save time money and stress!
10. Keep your Landlord – Tenant relationships professional.
*Try not to get too friendly with your tenants.
*Landlords who rent to friends and family or become friends with their tenants are setting themselves up for
problems. It rarely ever works out because it is almost impossible to maintain a serious business relationship once
the "friend barrier" has been broken.
*Relations break down with friends when landlords try to enforce their agreement.
Copyright © 2000-2016 The Landlord Protection Agency, Inc. All Rights Reserved.
Reprinted by Permission. Visit www.thelpa.com, email [email protected] or call (516) 483-4785
LANDLORDING: MANAGEMENT IDEAS
Management Tips from MrLandlord.com
25 Things I’ve Learned In Over Three Decades Of Landlording
The following list is compiled by an experienced landlord and contributor to LandlordingAdvice.com. Thanks,
Ralph (WA)!
1. I like to think that I am a good judge of character but I've been fooled before. So always verify your applicant's
credit, employment and rental history.
2. Look at the applicant's car to know that your property will be cared for in much the same manner.
3. An applicant who claims to have been a victim of unfair circumstances will often make you a victim of unfair
circumstances.
4. Do not rent to friends or friends of friends.
5. Pets cause problems more often than not. If you're going to accept them you need to be compensated for the
extra wear tear and risks that you will be taking on. However, a "No Pets" policy is the best policy.
6. Replace water heaters every 10 years whether they need it or not.
7. Keep the gutters clean and the moss on the roof at bay.
8. Do not provide or loan lawn mowers, string trimmers, or power tools of any kind. You'll get them back broken
and if someone gets hurt you might get sued.
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October 2016
9. Don't let residents do their own painting. They often botch the job.
10. Don't hand over a signed contract until you have a completed inspection report filled out and returned to you.
It's best to be present when the resident inspects.
11. Take lots of pictures and video before each residency. Include the front page of that day's newspaper to verify
the date.
12. It does no good to prohibit anything in your lease unless you have you have effective and immediate remedies
included in your agreement or available by statute.
13. Require residents to carry renters insurance for their protection and yours.
14. Include wording in your lease that limits your liability during periods where the rental is rendered inhabitable
(through no fault of the landlord) to abatement of rent during that period.
15. Include a modest rent escalation clause in your lease (I use 2.9% per year). It gets them used to the idea and
prevents you from agonizing about when, whether, and how much to increase the rent.
16. Avoid roommate situations if possible. They are inherently unstable.
17. Get a Lowes credit card and you'll get an automatic 5% discount on your purchases.
18. Get a Home Depot card and ask them to match the Lowes discount.
19. If you are ex-military disregard 18 & 19 and ask for a 10% discount at Lowes and Home Depot.
20. I have had bad experiences with Section 8 situations and recommend that you avoid them.
21. Give your number to the neighbors and ask them to let you know if there are any problems or concerns.
22. I offer well-maintained rentals that are very competitively priced but I insist on well qualified residents.
23. I also ask for two year+ leases whenever possible. Those who rent from me know they are getting a good deal
and are usually willing to commit to a longer lease.
24. Make sure that residents understand that if they cause stoppage of the drains, they will get the bill. Feminine
hygiene products, wet wipes, foreign objects, or even large wads of toilet paper should not be flushed down the
toilet.
25. Place battery-operated water leak alarms under the sinks--Best $10 you can spend.
Lesson Learned-Screen Your Contractors
The following is a happy ending to a landlord tale that could have turned out very bad.
Back in 2009, I hired someone to seal up and dry out a rental property basement.
I paid $1,250 (1/2 down for supplies) to a man who was supposed to do the basement sealing work for me. I
always check out the resident's background, but never thought to check out the background of a contractor until it
was too late. Basically he skipped a few days after getting the check, without buying any supplies or doing any work.
Volume 19 Issue 10
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October 2016
In 20 years of landlording before that, I had never had a contractor rip me off. He left the state without ever doing
anything. I filed a police report and eventually it went to small claims for theft by contractor and the state became
the prosecuting force. There was a warrant put out for his arrest. My name was not on the court case.
After filing suit, I discovered that he abused his girlfriend and also that he had killed someone a decade or so before
that. I was not going to back down but decided not to attend the proceedings so that maybe he would had
forgotten what I looked like, as I had forgotten what he looked like.
Luckily I got a picture of him from the victim advocate. I didn't want him to come to my house and not have me
even recognize him. Although he came back to the town where he originally lived (more than an hour from me),
the police could never seem to catch him.
FINALLY, he was stopped for a traffic issue and arrested. He was bailed out (by his girlfriend) and again escaped
out of state, but for some reason he must have been tired of running. He turned himself in but then kept coming
up with excuses and doing various things to prolong the court case. I was notified of all court proceedings and
could ask questions, if desired.
FINALLY, he was found guilty and his attorney called me to see what name they should make the money order out
to. Apparently it was a condition of the court that he had to pay the restitution up front. It was a LONG time
coming (five years), but that $1,250 felt SO good to deposit into my account. The lesson here is to check out those
you have working on your property, or they can cost you thousands.
If You Can’t Stand the Heat...
You should always be looking for ways to protect your investments. When your income depends on owning
property to rent, you'll start to see risks everywhere. But you can take a few simple steps that will help reduce the
likelihood a catastrophe will happen to one of your properties. One of the simplest things you can do is to install a
fire extinguisher in the kitchen of each property you own. Your insurance company may even give you a discount if
you do so.
An extinguisher in each kitchen can keep a small grease fire from turning into a blaze and burning down your
property. Of course, you need to check extinguishers on a regular basis to make sure they're still functioning. Each
one will have a date from the manufacturer that states when it needs to be replaced. Some great times to inspect
extinguishers are when you rent each property, when you do your annual inspection, or at the start of each year, but
always stay within the manufacturer's recommendations. If you indeed provide the extinguisher, you should
consider charging a deposit for it. A few people will steal anything that's not bolted down, and you don't want to
pay for new extinguishers every time a resident moves out.
Who Should Terminate a Lease After a Fire?
What are the insurance coverage implications of terminating a lease after a major loss?
Insurance policies that provide coverage for loss of rents typically pay for the rents that you are owed as a result of a
valid lease while the covered property remains unfit for habitation. Using this framework, let's examine two
possible scenarios:
Volume 19 Issue 10
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October 2016
Scenario #1. Landlord leases property to Tenant effective on January 1, 2013 for a one year term. Property burns
down on February 1, 2013. Landlord terminates the lease by providing written notice.
Scenario #2. Landlord leases property to Tenant effective on January 1, 2013 for a one year term. Property burns
down on February 1, 2013. Tenant terminates the lease by providing written notice.
The only difference between Scenario 1 and Scenario 2 is the party terminating the lease, yet they may have
drastic differences in coverage as applied by an insurance company. Let's assume that both policies are identical and
both provide coverage for loss of rents. Which Landlord would have Loss of Rents coverage as outlined in the
examples above?
Landlord in Scenario #2.
Most policies provide for loss of rents coverage for rents that are due to you. In scenario #1, the Landlord
voluntarily terminated the lease so it could be argued that she is no longer due the lost rents as a result of her
voluntary termination. Conversely, Tenant in scenario #2 terminated his lease as a result of the loss, and Landlord
in scenario #2 has lost rents as a result of Tenant's lawful termination. There may be additional implications
surrounding your insurance claim, the loss of rents is just one example. You should contact your insurance agent for
any questions you have about coverage including loss of rents, vacancy, and business interruption with extra
expenses such as tenant displacement.
This is why, it is important understand the effect a particular decision may have on your insurance claim should you
experience a loss.
Reprinted by Permission. The above tips are shared by regular contributors to the popular
MrLandlord.com Q&A forum, and by real estate authors. To receive a free sample of Mr. Landlord
newsletter, call 1-800-950-2250 or visit their informative Q&A Forum at LandlordingAdvice.com, where
you can ask landlording questions and seek the advice of other rental owners 24 hours a day.
LANDLORDING: TENANT DAMAGES
Tenants Accidentally Blow Up An Apartment Unit
Author Unknown
Three insect bomb canisters turned on in an apartment to exterminate cockroaches were detonated by a gas
stove pilot causing an explosion that blew out w i n d o w s and destroyed kitchen cabinets.
There were no injuries at the two-story apartment building and investigators said that tenants used too
many insect foggers and did not follow the safety instructions by turning off the stove's pilot light.
Although warning labels on the canisters advised the user to turn off pilot lights, the tenants activated the three
bug bombs without doing this and left the apartment. When they returned about an hour later, they opened
the front door, causing a rush of air to enter the apartment, causing the explosive reaction between the bug spray
and the pilot light.
Reprinted by Permission. Courtesy of the Shawnee County Landlords Association, August 2010.
Visit www.sclandlords.com
Volume 19 Issue 10
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October 2016
LANDLORDING: MINIMUM STANDARDS FOR APPLICANTS
Rental Standards And Policies-Why Bother With Them?
by Robert L. Cain
It's amazing. Too often landlords have no concrete idea of whom they will accept as a tenant. The result is that they
accept just anybody, or they rent on "gut instinct." Both methods are fraught with danger. A third method is taking
your property off the rental market for a month or two, because you didn't get any decent applicants and are afraid
to either rent to any of them or turn someone down for fear of a Fair Housing complaint. Then you lose one or two
months rent--and needlessly.
We know what happens when you rent to the first person who shows up with cash. That's the last cash you'll see
from him. And, you can end up spending a lot of your own cash to fix the damage that he or she did, plus paying
the mortgage out of your own pocket because of the rent you never received.
The gut-instinct method has worked for some landlords for many years, without them getting burned. They have
been lucky. It is perilous two ways. The first is related to the "rent-to-just-anybody system" of landlording: you pay
because they don't. The second is that you reject a perfectly acceptable, possibly even sterling, applicant because he
or you had a bad day or didn't quite hit it off. A corollary result is the Fair Housing complaint because your rejected
a member of a protected class because you had a "bad feeling" about him or her, but accepted another applicant
who was not a member of a protected class.
Rental standards avoid all three of the problems I've just described. In fact, having printed out rental standards does
three things for you:
One, it self-screens applicants. Properly done, you will eliminate a large percentage of the
unqualified applicants from even asking to rent from you. When they ask for a rental application,
you give them one and with it a copy of the rental standards. Many times when they read them, you
never hear from that applicant again.
Two, it gives you an idea of the minimum standards you will accept for a tenant. No more
guessing and using how you feel to decide.
Three, properly drawn and managed, rental standards protect you against Fair Housing
complaints far more than if you do not have standards.
Reasonableness
Standards are kind of like Goldilocks when she tasted the porridge, they can be too strict, too easy or just right.
Too strict standards can mean you end up making yourself a lot of extra work and losing a good tenant because
your standards didn't fit the property. Not every rental property is going to attract applicants who have ten years of
increasing responsibility at one company and a previous tenancy lasting seven years.
What kind of rental standards are reasonable? You have to choose. But standards you include are things that show
that the applicant will be a good tenant, not just that they meet some standard.
If you have some properties that attract low-income people or first-time renters, probably the kind of housing that
has the greatest number of bad tenants, one way to accomplish that is by using standards that leave options for
qualifying.
Volume 19 Issue 10
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October 2016
For example, you might use the following reference criteria:
At least one of the following types of references is required of applicants:
1) A satisfactory current landlord reference of at least three months in duration.
2) A satisfactory past landlord reference of at least six months' duration in the past two years.
3) A referral from a social service agency which has a partnership agreement with the property
manager.
4) If none or insufficient landlord references, then satisfactory personal references (such as teachers,
coaches or ministers), and/or participation in a housing readiness program may be acceptable.
From the tape series, "Avoiding the Tenant from Hell," available from Cain Publications. Reprinted by Permission. Copyright
2005 Cain Publications, Inc. Robert Cain is a nationally-recognized speaker and writer on property management and real estate
issues. For a free sample copy of the Rental Property Reporter call 800-654-5456 or visit www.rentalprop.com.
LANDLORDING: SHOWINGS
What Tenants Need To Bring To Showings
by Don Conrad
Once you’ve decided how and when you’re going to show your rental, you need to make sure the prospects meet
you at the rental with as much of their needed information as possible. You don’t want to make unnecessary trips
showing the property if you can help it, and having all needed paperwork and information required by you at the
time of the showing will go a long way toward preventing these extra trips.
On the Phone. When you have the prospect on the phone, either from your initial interview or when you call back
to schedule a showing, you need to tell him or her this: “I’m going to ask you to bring some information to make the showing a
success should you be interested in the unit. Please grab a pen and paper and write down the following.”
Tell them you’ll need the following from each person who will sign the lease:
•
Five personal references per adult, including names and phone numbers (I want to speak to at least three
references, so I always ask for five. Parents, grandparents, and other relatives don’t count.)
•
Past landlords’ names, addresses, and phone numbers
•
Copy of their social security number or card
•
Copy of current driver’s license or photo ID
•
Recent pay stubs (I recommend asking for two months’ worth.)
Volume 19 Issue 10
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October 2016
•
Solid verification of other income source, such as alimony check stubs, regular pension or government
support check stubs, and so forth (You want concrete proof that they have solid, reliable income. Have
them show you proof for at least two recent, consecutive months. This is a must, because you don’t want to
be chasing government agencies on the phone trying to verify this information.
•
If self-employed, a copy of last two years’ tax returns and three to six months of bank statements.
•
One or two current utility bills with their present address on it (optional).
•
One other source of ID or credit card (optional).
•
Bank name and phone number (You might want this to verify they have an active account. This may also be
optional. Some landlords want bank account numbers, but with the increased identity theft, tenant prospects
are more reluctant to give that out. I don’t blame them. I wouldn’t give out any account information, either,
but you can ask.)
•
Cash for their credit check (If you are charging a deposit to hold the property, at the showing would be the
time to collect the deposit. If your rental market is extremely hot, I would think about collecting a healthy
deposit to hold a unit.)
•
Any other bits of information you require not mentioned here.
Give directions. Once this list is given and verified as understood by the prospect, set the appointment time.
Give precise directions, including north, south, east and west, notable streets, and easy-to-locate landmarks on
how to get there. Remember that not all people are good with compass type of directions, so include left and
right turns, number of stoplights or signs, and approximate mileage between these streets and landmarks. If you
can’t do this properly, drive to your unit from all possible directions and write a complete set of directions
down. (you could get your directions off Map Quest although it won’t have landmarks designated). You should
keep this set of directions in your file of paperwork on that rental so you have them for future reference. Don’t
lose a great prospect because you gave poor directions.
Before you end the call. As you conclude your call, again give them a precise meeting time and your cell
phone number. Have them repeat what they need to bring, the complete directions, the time of your appointment
and your cell number. Ask them to call you thirty minutes ahead of their scheduled time—or whatever time you
need before you leave you house—if they are going to be late or not show up at all.
And last but not least, let them know they will need all parties present who will be making the decision on
renting. Also let them know to plan for about forty five minutes for the showing and to fill out paperwork if
they like the rental. Unless you live within walking distance of the rental you are showing, I advise you to use
these techniques. You’ll be glad you did. The author wrote the book entitled, How To Find That Quality
Tenant. Visit www.findthatqualitytenant.com Editor’s Note: I tried to visit the website a few times but was unable
to. Regarding the author’s book: it is available through Amazon .com (published in 2007) either in new or used
condition. Reprinted as a courtesy in appreciation of the author, Don Conrad, for the above article.
Volume 19 Issue 10
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October 2016
Vendor/Discount Table of Contents
Accounting Services PG
Construction & Renovations
Bill Leary HVAC
No Current Vendors
Financing Services
45
Sam Fisher, CPA
Clark Capital Group 44
National REIA
Discounts
Home Depot Rebate
ISC Discount
Rentals.com
Fire & Water –Cleanup &
Restoration
Servpro – Adriana Sireci
Insurance
Esposito Insurance Group
Real Protect
PG
47
Energy Services
No Current Vendors
PG
Home Inspections
No Current Vendors
45
45
50
Internet/Computer
Services
No Current Vendors
50
50
50
Investment Services
No Current Vendors
Legal Services
Fein Such Law, Harry Frieland, Esq.
Pest Control Services
No Current Vendors
Real Estate Agencies
No Current Vendors
Telecommunications
No Current Vendors
Title Agencies
No Current Vendors
Member Discounts
45 Kiuken Brothers
Ricciardi Brothers
Paints & Supplies
48
48
Residential Screening
No Current Vendors
Our Vendors support us and help us maintain our low membership dues.
Please contact them first when you need a product or service.
SEPTEMBER 2016 NEW AND RENEWING MEMBERS
Clark, Kevin
Esposito, Rocco
Friedmann, Scott
Gauer, Paul
Robinson, Beth
Rotenberg, Steve
Sharp, Cheryl
Volume 19 Issue 10
Sharp, Donzelle
Sigman, Marshall
Thomas, Shibu
Vitale, Frank
Vitale, Robyn
Watson, Harry
Whitaker, Wayne
43 of 50
October 2016
Clark Capital Group, LLC is a consultant firm to Real
Estate Investors, Mortgage Bankers, Mortgage Brokers
and direct clients who desire commercial financing
such as hard money or un-conventional business
financing. We specialize in non-conforming, nonbankable, troubled, or opportunistic commercial
mortgage and business financing when conventional
financing is not an option.
We have an extensive network of Hard Money or unconventional lenders/funders who finance “NonConforming” commercial hard money loan
opportunities. Our Commercial Hard Money Loans are
made to fit the needs of a variety of clients.
Email me directly with questions regarding our
programs:
[email protected]
Volume 19 Issue 10
44 of 50
October 2016
YOUR AD COULD BE HERE!
CONTACT OUR VENDOR
CHAIRPERSON.
FOR MORE INFORMATION
SEE PAGE 50
Samuel S. Fisher & Associates
Certified Public Accountants, LLC
100 Bayard St, Ste 311
New Brunswick, NJ 08901
Tel: (732) 846-1700
Fax: (732) 846-1788
Website: www.samfishercpa.com
Harry Frieland, Esq.
Fein Such Law Group
www.FEINSUCH.com
auto * home * commercial * life * health
Rocco Esposito
89 Franklin Avenue
Nutley, NJ 07110
Phone: 973-284-1083
Fax: 973-284-0821
Email: [email protected]
Website: www.espositoinsurance.com
Email Address:
[email protected]
Mailing Address
7 Century Drive
Parsippany, NJ 07054
Telephone Number:
(973) 538-4700 ext. 3394
Volume 19 Issue 10
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October 2016
DISCLAIMER
The goal of the Metro Real Estate Investors Association
(MREIA) is to educate investors, based on information edited
from material contributed by leaders in the real estate investing,
legal, accounting, property management, financial, legislative
and other related professions.
We do not render legal, accounting, tax, investment or other
professional services either through our e-newsletter, the Metro
or at general meetings. We disclaim all liability for actions (or
inactions) taken as a result of any communications between the
Board of Directors, appointed officers and the membership. No
warranties, expressed or implied, are provided for the data we
publish, its use or its interpretation.
We do not officially endorse any product, project, person or
organization. Before making any investment decision, you are
urged to seek advice from qualified and competent
professionals and to use due diligence before using any product,
services or ideas presented in the Metro or at general meetings.
At times the Board may take particular positions or points of
view on matters regarding the real estate industry. Said positions
do not represent solicitations.
Our speakers are permitted to sell any products or services they
may have to offer our members or non-members. The opinions
expressed by the speakers and writers do not necessarily reflect
the opinions of the Executive Committee or Advisory Board.
By attending any of the activities provided by this association, you
hereby release, discharge and agree to indemnify the club name,
its respective officers, directors, members, employees and/or
contractors, past or present, from any and all liabilities associated
with our organization.
Volume 19 Issue 10
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October 2016
Volume 19 Issue 10
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October 2016
Volume 19 Issue 10
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October 2016
Board of Directors
Executive Committee
President Dan Schwartz
Vice President Murray Kane
Secretary Nick Zampetti
Treasurer Bob Mularz
(201) 791-4639 [email protected]
Past Presidents
David Corsi.
Frank Barillari
Nick Zampetti
Newsletter Editor
Dan Schwartz
Advisory Board Chairs
Audio/Visual Allen Catbagan
Legislative Awareness David Corsi. (732) 923-1410 [email protected]
Lending Library Angela Fan
Meeting Site Nick Zampetti
Membership Peggy Martini
Registration Chuck Martini
Vendors (acting) Murray Kane
MREIA is primarily an educational organization and a National REIA Chapter
whose area covers all of the counties in northern and central New Jersey.
Volume 19 Issue 10
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October 2016
National REIA Member Discounts
You can pick up a Home
Depot application at a
MREIA monthly meeting
Volume 19 Issue 10
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October 2016

se pt ember 2016 metro

Transcription

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