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Page 1: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with
Page 2: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with
Page 3: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with
Page 4: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

by Bruce E Dinger

Unites Local Investors with Technology

by Tim Houghten

with National Expos in "HOT" Real Estate Markets to Reach

Magazine's Thousands of Social Media Followers

by Lori Peebles

that May be Costing You Money

by Amanda Y. Han & Matthew T. MacFarland

by Randy Hughes

Leads the Way in Enhancing the Community

by Tim Houghten (Featuring John Aaron)

Became the Co-Founder of the Most Successful

Property Management Company in Houston

by Steven Rozenberg

The “Secret Ingredient” of Overseas Deals

by Clint Coons

Improving Quality of Life through Real

Estate Investment “My training is one on one, and I am very

interested in their success. There is nothing

magic about my training. It is just combining

knowledge with hard work. I have a system that

works, if they do. “ – Dennis Henson

for Small Business Owners to Increase Cash Flow

by Dr. Teresa Martin

to Real Estate Investing Under $50K

by Priti Donnelly

Can Make Your Business Efficient and Profitable

by Leon McKenzie

For Financing Real Estate Assets – Learn About AssetAvenue

by Tim Houghten

Business Model

by Gary Geist

Page 6: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

PRIVATE LENDING BRUCE E. DINGER

HAT IS PRIVATE LENDING?

A private money loan is a loan that is given to a real estate investor, secured by real estate. Private money

investors are given a first or second mortgage that secures their legal interest in the property and secures their

investment. As REI,when we have isolated a home that is well under market value, we give our private lenders

an opportunity to fund the purchase and rehab of the home. Through that process, the lender can yield

extremely high interest rates – 4 or 5 times the rates you can get on bank CD’s and other traditional

investment plans.

Page 7: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

Essentially, private money lending is a lender’s opportunity to become the bank, reaping the profits just like a

bank would. It’s a great way to generate cash flow and produce a predictable income stream - while at the

same time, provide excellent security and safety for your principle investment. You can do what the banks have

been doing for years…make a profitable return on investments backed by real estate. There is no other

investment vehicle like it.

HOW THE PROCESS WORKS

The process is simple. The Residential Redeveloper (RR) finds an extremely undervalued property to

purchase - and once lender gives the green light, the RR borrows the funds to purchase and renovate the

property. At closing, the lender receives a mortgage on the home along with other important documents. Next

stage is the property renovation. Once the renovations are complete (typically 3-6 months depending on the

size of the project), the RR will list and sell the property. When it’s time for closing, the lender receives his

principle plus 10% interest payment. It’s just that simple! The goal is to keep turning that money for the lender

and keep them making substantial profits so they keep coming back – building a long term mutually beneficial

relationship.

Through private money lending, lender’s have the opportunity to become the bank

OVERVIEW OF THE PRIVATE LENDING PROCESS

PRIVATE LENDING BRUCE E. DINGER

Page 8: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

HOW THE LENDER BENEFITS

FROM PRIVATE LENDING

The private money lender (PML) can

benefit greatly from investing their

capital. A real estate mortgage/ deed of

trust provides them with security

instruments they would not get with

other investments. The PML also has

added layers of protection because of

how the RR buys, and because the

PML has recourse available in case the

RR were to default on the loan.

RR currently pay 4-5 times what a

typical bank CD is paying. Rates may

fluctuate some, but not much,

depending on the purchase price and

rehab involved. The lower the price the

RR pays for a home, the RR can pay a

little higher rate to make sure the

lenders make it worth their time.

Private lending means the PML can

relax while the money is in a truly safe

place, working for them.

It’s a win/win opportunity for

both the lender and borrower

Done correctly, equity is built in the purchase of the home,

educated RR are buying 30-40% below a retail buyer – that

creates instant equity at purchase. Also, in a typical transaction,

RRs cut out the middleman cost, such as: commissions, mortgage

broker fees, loan fees; and attorney costs are also lower because

there is less work for them to review.

An experienced and educated RR is able to offer buyers a fully

renovated home at or below everything else in the neighborhood.

The goal is to buy right so you can attract a wide variety of PMLs

for your projects….keep in mind, RR make money when we BUY.

PRIVATE LENDING BRUCE E. DINGER

Page 9: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

RISKS VS. REWARDS

Private money lenders bring speed and

efficiency to the RR’s transactions, and

their leverage is far greater when they

purchase using private cash funds.

Many of the homes RR purchase are in

need of a quick sale within 10-14 days.

A traditional bank requires 30-45 days

to close a loan. Many traditional home

Sitting in Bank Real Estate Private Lending

$100,000 x 1% interest $100,000 x 10% interest

12 Month Term = $1,000 ROI 12 Month Term = $10,000 ROI

*Backed by Real Estate Private Lending

PML are making a 10x greater return on their money!

Stock Market Real Estate Private Lending

Completely Unsecured Secured by Deed of Trust or Mortgage Deed

Completely Uninsured Collateral is Fully Insured

Invest at Market Price Collateralized Below Market Value

Returns Are Unknown Returns Are Fixed and Agreed Upon Term

Tangible Asset

HOW PRIVATE MONEY HELPS YOU AS A RESIDENTIAL REDEVELOPER (RR)

sales fall out of contract because of financing issues. Using quick cash as leverage allows the RR to

negotiate a much lower purchase price and reduce risk.

Being able to offer a fast closing with private funds motivates sellers to take the RR’s offer over the

competition, and entices them to take a much lower price than they would from a conventional buyer. Also,

lending guidelines are also continually changing and are requiring applications, approvals, junk fees and strict

PRIVATE LENDING BRUCE E. DINGER

Page 10: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

investor guidelines. They also limit the number of

investment properties that can be purchased by

one company.

On a new home purchase requiring renovations,

private lender funds will be allocated to the

purchase price, renovations, carrying costs, cost to

resell and a small buffer for unexpected expenses.

PROTECT YOUR LENDERS

Mortgages offer the banks solid, long-term, fixed

returns. The PML can put themselves in the

position of the bank by directing their investment

capital, including retirement funds to well-secured

real estate mortgages. Mortgages have ultimate

safety because if default occurs, the bank can

recover its investment as the first lien holder on the

property.

Each property acquired should be put through a

rigorous evaluation process in order to assess the

profitability before the property is ever purchased.

“lntegrity" should be an essential part of the RR’s

business. Also, for the PML’s protection, the PML

should be provided these documents to secure their

investment capital:

Promissory Note: This is the PML’s collateral for

their investment capital

Deed of Trust/Mortgage: This is the document

that is recorded with the county clerk and recorder

to publicly secure their investment against the real

property that the RR is providing as collateral

Hazard Insurance Policy: This is where the

private lender would be listed as the “Mortgagee” for

their protection in case of fire or natural disaster, etc.

The RR would pay for a title search as well as a title

policy on the home just as would be done in a typical

transaction. For a rental investment with a long-term

note, the RR always keep a valid hazard insurance

policy on the property to protect against causalities.

PRIVATE LENDING BRUCE E. DINGER

MORTGAGE

Page 11: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

Kennsei Trading, Inc.

Kennsei Trading Inc. is a Registered Investment Company – specialzing in buidling wealth through the financial markets,

including the stock and equity markets, and the real estate market. The firm is lead by CEO Bruce E Dinger, who has over

20 years experience as an investor.

Kennsei Trading Inc. has an extensive network of private money investors and understands the thought process of a savvy

investor and what they look for in any investment prior to the deployment of their capital.

Join Bruce Dinger for an incredible session on “Raising Private Money for Your Properties and Learn Key Cash Flow

Strategies”. Also get an opportunity to tap into his Inner Circle of Private Money Investors looking for key investments.

Bruce Dinger can also be reached at [email protected] or 408.639.9793.

PRIVATE LENDING BRUCE E. DINGER

The PML will be named as a mortgagee and notified if the insurance was not kept current. In the event of any

damage to the property, insurance distributions would be used to rebuild or repair the property, or used to repay

the PML.

Page 12: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with
Page 13: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with
Page 14: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

relion is plugging in the missing links to real estate investment success

REAL ESTATE PLATFORM BRELION UNITES LOCAL INVESTORS WITH TECHNOLOGY BY TIM HOUGHTEN

Real estate crowdfunding has been a popular buzz topic in the media for a couple years now. Investment

through crowdfunding platforms has grown by tens of billions during this time. Yet, much of the capital

changing hands has been to the benefit of big funds, giant corporations and brands, and even the banks that

have littered the nation with distressed properties.

Page 15: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

The original vision for crowdfunding was much

different. It was about giving individuals access to

better investments, and enabling small and mid-

sized businesses to access capital without being

captive to a few old institutions. CEO and Founder

of Brelion, Vadim Kleyner, and his team recognized

this, and the many gaps which have created a void

for those that should be benefiting from the new

JOBS Act opportunities. Then they created a new

solution…

Putting the T.L.P in Real Estate

Crowdfunding

There are three core components which have

proven to be key to real estate success for

thousands of years.

1. Technology

2. Location

3. Partnerships

Today we still marvel at the technological and

logistical genius of the pyramids. It takes new

technology and tools to make progress, and

achieve greater things. Everyone knows that winning

in real estate is all about “location, location, location.”

And since the time of the pyramids the crowd and

real estate partnerships have consistently created

the most magnificent works of architecture and

wealth. That’s true of monarchies which still exit

today, of the 50 United States of America, and the

Statue of Liberty.

Yet, today’s crowdfunding platforms appear to lack

unity of the crowd, or thoughtfully curated local

investment opportunities for busy professionals.

Brelion has changed all of this for those living in

Northeast Ohio.

Innovation in Real Estate Investment

Brelion offers an easy to use investment platform

for property investors in the Cleveland, OH area.

Returning to the original design concept for

crowdfunding – the platform specializes in

connecting local investors with local projects. Vadim

explains that “failure to localize investing was a

major flaw in other platforms. Now investors can

confidently and efficiently invest in real estate in the

neighborhoods they know, understand, are

comfortable with, and want to be engaged in.”

REAL ESTATE PLATFORM BRELION UNITES LOCAL INVESTORS WITH TECHNOLOGY BY TIM HOUGHTEN

Page 16: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

The platform has been

expanding from neighborhood to

neighborhood in Northeast OH to

offer new opportunities and

revitalize communities. Recent

projects have included fixing and

flipping single family rentals,

creating turnkey rentals, new

development, and small

apartment buildings.

Investments are short term with

an average timeline of around 6

to 12 months. With a minimum

investment of just $1,000, and

some projects paying monthly

yields, this provides a great

platform for investors to test drive

the results before putting in more

capital, and more deeply

diversifying portfolios. CEO

Vadim tells Realty 411 Magazine

that “this has really helped

investors to lower risk, and

enables them to invest in 20

different local projects, with the

same amount of capital they

might have barely been able to

enter one investment outside of

their comfort zone.”

One critical feature that other crowdfunding platforms forgot, or failed to

include that you’ll love at Brelion is social functionality. You’re not just a

faceless icon in the crowd here. You actually get to engage with others

investing in the same projects, and to communicate between organizers

and capital investors.

Brelion is open to both accredited investors with money to invest in

local real estate projects, as well as local investors seeking capital for

their projects. According to Vadim, “the platform’s intense local focus

enables the team to quickly and accurately evaluate the safety, value,

and profitability of deals investors want to raise money for. They are all

just a few minutes away. No other platform can say that. To speed up

the approval and funding process the firm has created a proprietary

algorithm which incorporates 25 plus different metrics for evaluating

deals.” The team is so confident in the system that Mr. Kleyner says

he has personally invested his own funds in every single deal

promoted on the site.

Backend support for fundraisers also includes introductions to

investors, facilitating project updates, fulfilling accountability to

investors, and dealing with taxation and bookkeeping.

Delivering What Busy Professionals Need Most

We were fortunate to track Vadim Kleyner down between working on

real estate projects and speaking at Notre Dame where he has been

helping a new generation of student entrepreneurs understand the

science of marketing. In fact, before stepping into the real estate

industry full time Vadim had a strong career in IT and big data.

REAL ESTATE PLATFORM BRELION UNITES LOCAL INVESTORS WITH TECHNOLOGY BY TIM HOUGHTEN

Page 17: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

As a busy technology professional himself he wanted to invest in real estate. There just weren’t any viable

platforms around. He says “you had to get out and do it yourself, and buy properties, and be engaged in the

industry every day.” That’s a luxury most busy professionals don’t have today. So Brelion was born to enable

them to invest in great projects, close to home, but with the ease of a few taps on a smartphone.

Discover the platform’s current investment opportunities at www.Brelion.com

REAL ESTATE PLATFORM BRELION UNITES LOCAL INVESTORS WITH TECHNOLOGY BY TIM HOUGHTEN

Page 18: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with
Page 19: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

REALTY411 CELEBRATES NEW ISSUE WITH NATIONAL EXPOS IN “HOT” REAL ESTATE MARKETS… LORI PEEBLES

ealty411 Magazine, the longest-running real estate investment publication owned by the same owner,

is celebrating their new issue by hosting numerous expos around the nation in an effort to meet as

many of their social media followers as possible.

Page 20: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

Based in Santa Barbara County, Realty411 publishes

real estate investment resources for investors and

real estate professionals and produces real estate

expos, mixers, and meetings around the country.

Their publications, along with their digital monthly

magazine, REI WEALTH, have the largest social

media network across online platforms such as:

LinkedIn, Facebook, Twitter, Ning, Tumbler,

Instagram, Pinterest, Blogger, Google +, YouTube,

MySpace, and many other up-and-coming platforms.

Realty411 makes their issues available freely

online and also mails out complimentary copies in

an effort to expand real estate education and

compel others to choose real estate as a tool for

building long-term wealth. Many REI WEALTH

issues can also be found complimentary online,

other editions cost an affordable rate of $1.99 to

$2.99 per issue.

Their national tour schedule was specifically created to

reach the "hottest" markets around the country.

Realty411's schedule is as follows:

REALTY411'S SCHEDULE DESIGNED FOR

MAXIMUM VISIBILITY IN TOP MARKETS:

* FLORIDA

- Ft. Lauderdale - July 30th - Life's a Beach - East

Coast Real Estate Investors' Expo

https://realty411floridaexpo.eventbrite.com

* CALIFORNIA

- Pleasanton, Calif., - August 26th - Realty411's

California CA$FHLOW Conference

https://cashflowconference2016.eventbrite.com

- San Jose, Calif. - August 27th - Silicon Valley's

CREATIVE Real Estate Investors' Expo

https://sanjoserealty411expo.eventbrite.com

REALTY411 CELEBRATES NEW ISSUE WITH NATIONAL EXPOS IN “HOT” REAL ESTATE MARKETS… LORI PEEBLES

Page 21: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

"The best part of my job is meeting our readers and

social media followers," says Linda Pliagas, owner

of Realty411. "It's great to learn what type of

transactions they are engaging in and find out what

their needs and concerns are. We have very faithful

followers who have been joining us for many years.

It's really nice to see their progression as investors

as well, as they begin to engage in more

sophisticated deals."

Pliagas who started the magazine as a digital

newsletter in 2006 and a print edition in 2007, is a

licensed California real estate sales agent. A

landlord for many years, Pliagas is an active

accredited investor and entrepreneur. Her family

owns several long-standing businesses in Los

Angeles and Santa Barbara Counties.

Currently, Realty411 reaches more people around

the nation with their in-house expos and events

than any other realty investor publication.

Some expos also double as charity benefits where

awareness and donations are raised for numerous

worthwhile organizations focusing on children,

assisting the homeless, victims of domestic

violence, and animal welfare. **

* NEW YORK

- Long Island, NY - Sept. 17th - Long Island

Realty411 Expo - Investors Unite to Learn, Network

and Grow Wealth

https://longislandinvestorexpo.eventbrite.com

- Manhattan, NYC - Dec. 3rd - Our 3rd Event in

Manhattan!

Mingle in the Heart of the Big Apple in Times

Square - Details coming soon.

* TEXAS

- San Antonio - Oct. 7th - ALAMO EXPO with Lisa

Lewis

** A Charity Expo for the Leukemia Lymphoma

Society.

https://alamoreicharityexpo.eventbrite.com

- Arlington, TX - Nov. 12th - GIVE THANKS, GIVE

BACK

** Gives Thanks, Give Back Part 2 - More

information coming.

* NEVADA

- Las Vegas - Oct. 22nd - 3rd Annual Viva Las

Vegas Real Estate Expo

A special tribute to the local Las Vegas market and

Real Estate Insider's Club.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Realty411's jam-packed schedule was created to

maximize its publications in the nation's most active

and investor-friendly markets. While their calendar

may seem full, the company plans to add more

events for 2016 to reach even more readers in new

markets. Currently they are considering several

other keys cities.

REALTY411 CELEBRATES NEW ISSUE WITH NATIONAL EXPOS IN “HOT” REAL ESTATE MARKETS… LORI PEEBLES

Page 22: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

This year, both of the Alamo Real Estate Charity Expo and the Arlington Give Thanks, Give Back Expos will be

raising awareness and donations for charitable causes.

To learn more about Realty411 magazine, please visit their websites, including:

Realty411's original website: http://realty411guide.com

Realty411's NEW expo website: http://realty411expo.com

Realty411's NEW magazine website: http://realty411magazine.com

For further information about Realty411 or to inquire about sponsorship opportunities, please

contact: Ryan Gay, Director of Marketing: 805.693.1497

* Schedule subject to change due to conflicts, emergencies or unforeseen issues.

REALTY411 CELEBRATES NEW ISSUE WITH NATIONAL EXPOS IN “HOT” REAL ESTATE MARKETS… LORI PEEBLES

Page 23: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with
Page 24: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with
Page 25: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

ould you be shocked to learn that the average American “spends” more money on taxes than

they spend on food, clothing, and shelter combined? Unfortunately, this is a true statement.

When you add up federal income taxes, state income taxes, city taxes, property taxes, sales

taxes, and other various taxes we all pay, it is no wonder that taxes are one of our biggest

expenses each year.

TOP 5 MISTAKES THAT MAY BE COSTING YOU MONEY AMANDA HAN & MATTHEW MACFARLAND

Page 26: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

For real estate investors, it is even more important to ensure that we minimize

our taxes because $1 saved can provide us with $4 of real estate investments.

For example, if we were to reduce our taxes each year by $5,000, then we

would have $10,000 of extra cash in just two years. With the additional

$10,000, we may be able to use that as a down-payment and purchase a rental

property worth $50,000. Imagine how much faster you can grow your real

estate portfolio when you are able to maximize your tax savings and re-direct

that money to real estate?

It may be surprising to know that a large majority of Americans unknowingly

overpay in their income taxes each year. This begs the question of “Why?”

Why is it that the average American loses so much money to taxes each year?

Well, as tax strategists, we hate to say this but one of the major reasons that

taxpayers lose a ton of money to Uncle Sam is really because they receive bad

advice. As such, we want to share with you some of the most common and

costly tax mistakes that you need to know in order to protect yourself from

overpaying the IRS this year:

Mistake #1: Deducting Expenses in the Wrong Place

Have you heard of the phrase “all men are created equal?” Well, unfortunately,

not all tax deductions are created equal. For example, did you know that your

travel expenses can, on one hand, reduce your tax by 50%, but on the other

hand could save you nothing? Surprisingly there is actually a right way along

with a wrong way to take your tax deductions.

One of the most common

mistakes we see as

CPAs are tax deductions

being taken in the wrong

places. Take the example

of a taxpayer named

Tony. Tony is a pilot by

trade and he also has a

business in which he

sells nutritional products.

For all of Tony’s travel

costs, in previous years

his tax preparer took

those deductions on his

Schedule A as

unreimbursed employee

business expenses.

Based on his income

level and the limitations

on Schedule A, he was

unable to benefit from

any of his $20,000 of

travel costs incurred. Had

he correctly reported

these travel costs to be

part of his business

expenses (i.e.: on his

business tax return or

Schedule C), he would

have increased his tax

refund by close to

$10,000.

TOP 5 MISTAKES THAT MAY BE COSTING YOU MONEY AMANDA HAN & MATTHEW MACFARLAND

Page 27: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

Now you can see what we mean when we say not all tax deductions are created equal. To ensure you maximize

your tax savings, make sure that you are taking your tax deductions on the right forms and schedules!

Mistake #2: Real Estate Professional Status

As an investor, you probably already know about the wonderful tax benefits of depreciation. Depreciation is the

ability to write off the purchase price of your rental properties over the life of the asset. However, if you are

someone with higher income, it is possible that your rental expenses are not being used to the fullest extent to

reduce taxes from your other non-rental income. One way around this hurdle is to become a “real estate

professional” in the eyes of the IRS. Let’s go over an example of what this means.

Lynne had been working with a CPA for many years and was under the false impression that she had been

benefiting from the tax deductions as a real estate professional. Unfortunately several years after investing in

real estate she found out that her CPA prepared her taxes incorrectly which resulted in lost refunds of $20,000.

Lynn’s returns were prepared so that her excess rental losses were not fully utilized to offset the taxable income

from her husband’s W-2 job. Instead of being deducted, those losses were trapped and could only be used to

offset taxes from “future” rental income.

This is by far the biggest

mistake that we see time and

time again made by real

estate investors. This can be

a costly mistake and one that

may not be undone. So what

exactly is a real estate

professional and how could

that have helped in Lynn’s

situation?

Contrary to popular belief, the Real Estate Professional Status is not taken by simply indicating that as your

occupation on your tax return or even by filling out a specific form or checking a box. Being a real estate

professional does not mean you need to be a licensed realtor or broker. It just means that you have to be

actively involved in your rental real estate and you have to spend at least 750 hours in real estate per year.

Lastly, to be a real estate professional in the eyes of the IRS, you must also spend more time in your real estate

than your other job(s).

TOP 5 MISTAKES THAT MAY BE COSTING YOU MONEY AMANDA HAN & MATTHEW MACFARLAND

Page 28: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

We reviewed Carol’s prior year tax return to find out

that her CPA incorrectly prepared her individual tax

return showing her to be a passive investor in the

partnership rather than as an active business

owner. Because of this error, Carol left $30,000 of

tax write-offs on the table! Fortunately for Carol, we

were able to simply check a box in the tax return for

her to claim that $30,000 tax write-off. So if you are

a business owner or someone who receives a K-1

from any of your businesses or investments, make

sure you speak to your tax preparer to ensure you

are not erroneously being limited on your tax write-

offs by the passive loss limitation rules.

Mistake #4: Missing Carryforward Tax Benefits

There are a lot of things on our tax returns that

move with us from year-to-year, better known as

“carryforwards.” For example, if you have had

certain types of tax deductions, losses, or credits

that you were not able to use in the past for any

reason, these generally get “carried forward” to

your future tax returns, from one year to the next.

Carryforward tax benefits being lost between the

years is yet another common mistake we see in

reviewing client’s prior year’s tax returns.

If you invest in real estate, make sure you speak to

your tax preparer to ensure that are claiming real

estate professional correctly and that any

appropriate election is in place before you send off

your tax returns. On average, the tax savings

between a real estate professional and someone

who is not a real estate professional is anywhere

between $5,000 or more each and every year.

Mistake #3: Limited by Passive Loss Rules

This next example is a common situation that we

see time and time again. One of our clients, Carol,

is a retired teacher that operates a home-based

health food business with her friend Joyce. Based

on the suggestion of her advisor, Carol and Joyce

correctly formed a partnership to jointly run the

business. As with many businesses, not every year

was a not a profitable year. For Carol and Joyce’s

business, it was especially bad the first year and

they suffered losses of around $30,000. After

meeting with their tax preparer, Carol was shocked

to learn that after losing so much money, she still

owed taxes to the IRS.

TOP 5 MISTAKES THAT MAY BE COSTING YOU MONEY AMANDA HAN & MATTHEW MACFARLAND

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For example, a taxpayer named Jack made some bad investments back in 2014 which resulted in close to a

$20,000 loss carryforward on his tax return. However, his over-worked CPA somehow “lost” that carryforward

when he prepared Jack’s 2015 tax return. It was a mistake that could have cost James close to $8,000 of tax

refunds over the next few years! A small yet potentially costly mistake.

Mistake #5: Not Doing the Appropriate Analysis

Filing tax returns should not be simply putting numbers on forms. Often times, it take analysis and scenario

modeling to determine how to file the returns to provide you with the optimal results. Let’s take a look at how

impactful an analysis can be.

Sherri has two sons who are currently in college. After a review of her previous year’s tax returns, we noticed

her prior tax preparer did not claim an education tax credit of $2,500 each for both her sons attending college

because she was told that due to her high income level, she was not able to claim those credits. This is a

correct statement (there is an income limitation for claiming the education tax credits), however, there is a

loophole that was overlooked. With some analysis, we discovered an easy loophole: Sherri’s sons could have

filed their own tax returns which in turn could have provided them $2,500 each in education tax credits! With a

little strategy and analysis, Sherri and her sons were able to increase their overall tax refunds by $5,000 per

year just by taking advantage of their education credits!

As you can see, not all tax deductions are created equal and not all tax preparers are created equal.

TOP 5 MISTAKES THAT MAY BE COSTING YOU MONEY AMANDA HAN & MATTHEW MACFARLAND

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Matthew T. MacFarland, CPA

Matt has over 20 years of experience in

public accounting as a CPA & Tax Strategist.

He has worked for both the “Big 4” and

regional CPA firms. While at Deloitte, Matt

served as a Tax Manager in their Private

Client Advisor (PCA) group where he

focused his expertise in tax planning and

compliance for high net worth individuals,

business owners, commercial real estate

investors, and professional athletes. His

diverse portfolio of clients included real

estate, manufacturing, retail, technology,

and professional services industries.

There are so many strategies that are available for each of us to utilize for saving taxes, and all it takes is

knowing how. So ask yourself:

1. Do I know what I can legally deduct on my tax return?

2. Do I have a plan in place to minimize my taxes each year?

3. Do I meet with my tax advisor throughout the year to learn new strategies that are available to me?

We hope that you can answer “Yes” to all of the questions above. If not, then get in touch with your tax advisor to

do some proactive planning. Take some time now to put strategies in place to keep more of your money. If you

have not already done so, check out our newest book Tax Saving Strategies for the Savvy Real Estate Investor

on Amazon to discover strategies that you can use to reduce your taxes each and every year.

Amanda Y. Han CPA

Amanda has over 18 years of

experience as a CPA with special

emphasis in real estate, self-directed

investing, and individual tax planning.

Amanda has extensive "Big Four" public

accounting experience in the Lead Tax

Group servicing clients in the real

estate industry. She provided tax

consulting and tax compliance for

companies engaged in land

development, residential development,

medical facilities, and conglomerate

shopping malls.

Keystone CPA, Inc.

Phone: (877) 975-0975

[email protected]

TOP 5 MISTAKES THAT MAY BE COSTING YOU MONEY AMANDA HAN & MATTHEW MACFARLAND

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have been a

landlord for 43

years and I have

LANDLORDS AND LAND TRUSTS RANDY HUGHES

always threatened to

write a book of my

experiences. Perhaps

one day I will write a

“tell all” book about the

crazy and unique

tenant situations that I

have found myself in,

but for now, I will limit

this article to those

experiences that relate

to using a Land Trust.

Page 34: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

Most rental real estate is owned by mom and pop

operations that have no separation between the

“owner” and the “tenant.” The relationship that

develops is one of an adversarial nature. The

tenant knows that he/she is dealing directly with

the owner of the property and therefore has an

advantage when negotiating lease and

maintenance issues.

For example, when it comes time to renew a

lease it is difficult for the owner of a property to

drive up in his/her Mercedes to demand a rent

increase. Not that the owner doesn’t deserve an

increase, but the perception from the tenant’s

point of view is that the owner does not “need” an

increase.

Unfortunately, most tenants in America today

think that the owner of their property is rich and

has no cares in the world! It is a common

misconception that people who own rental real

estate are wealthy. So, when it comes time to

renegotiate a lease the owner is at a distinct

disadvantage.

Most savvy real estate investors will hold title to their

property in a Land Trust with perhaps the beneficiary

being a Limited Liability Company (LLC) or

Corporation. This structure gives the investor the

anonymity of ownership from a Land Trust and the

asset protection benefits of the LLC.

When a Land Trust owns title to real estate held

inside the trust, the Beneficiary is NOT the owner.

The Trustee is the full legal and equitable title holder.

This means that as the Beneficiary you can honestly

state (to everyone including tenants) that you are not

the owner. This puts the Beneficiary in a much better

negotiating position with tenants.

As the property manager you only have certain

powers bestowed upon you by the owner. Beyond

those powers your hands are tied and it becomes a

take it or leave it proposition. For example, when a

property manager presents a rent increase to a

tenant it is from instruction from the owner of the

property. It is not up to the property manager to

negotiate, just deliver the message. Negotiations

become much more matter of fact when handled in

this manner. The property manager is just “doing her

job.”

LANDLORDS AND LAND TRUSTS RANDY HUGHES

Page 35: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

There are other distinct benefits to not being the “owner” of rental real estate. When I was a younger landlord

(with two young daughters) the last thing I wanted was an irate tenant (who was being evicted by the

“owner.”) to come knocking on my door where I lived to seek retribution. With the easy access to courthouse

records that the internet provides looking up the owner of a property is easier than ever.

Many of the benefits to holding title in a Land Trust relate to personal safety like the example above. Another

personal story to drive home this point was the landlady in Florida who called me and wanted to know how

quickly she could put her property into Trust (and get the title out of her name). Seems that one of her male

tenants was taking an interest in her. The tenant had looked her up online and found eight properties that she

owned in her own name. Armed with this information the tenant was going to each property and knocking on

the door looking for her. It never occurred to me before she called that titling your property in a Land Trust

could help avoid a stalker!

Being a property manager and not an owner is a MUCH better position to be in when dealing with tenants. It

puts you in a different light. One with less authority and less ability to change things. It is similar to actors

having agents to negotiate their movie contracts. Actors are good at what they do, but not necessarily good at

negotiating on their own behalf. Furthermore, it takes confrontation out of the equation and always allows the

agent/manager the ability to say, “The owner will not let me do that” or “I will talk to the owner about your

request and get back to you.” This lets you back off and think about the tenant’s request with a clear head

and a lack of emotion.

LANDLORDS AND LAND TRUSTS RANDY HUGHES

Page 36: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

I could give many more examples of how beneficial it is to hold title to your investment real estate in a Land

Trust, but space limits me and I think you are getting the gist of my point anyway. So, do yourself a favor and

DON’T OWN REAL ESTATE IN YOUR OWN NAME. There are NO advantages to owning real estate

personally…only disadvantages!

Randy Hughes, aka, Mr. Land Trust™

It is difficult to convey all of the benefits of using a Land Trust in a short article like this. I have

been using (and writing about) Land Trusts for the last 40 years. If you would like to learn more

about how to create your own Land Trusts, for FREE training go to:

www.landtrustwebinar.com/411 or email me at: [email protected] for my FREE booklet,

“50 Reasons to Use a Land Trust” or contact me the old fashioned way by calling 866-696-7347

(I actually answer my own phone!) Randy Hughes, aka, Mr. Land Trust™

LANDLORDS AND LAND TRUSTS RANDY HUGHES

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Page 39: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

s your small business struggling to make enough profit to pay the bills? Living paycheck to paycheck can

be quite frustrating. Perhaps you started a small business so you could pursue your dream while

earning money at the same time. If so, then you know that it isn’t always easy to get a small business

to bring in the profits you’d like.

3 PROVEN STRATEGIES FOR SMALL BUSINESS OWNERS TO INCREASE CASH FLOW DR. TERESA R. MARTIN

Page 40: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

However, if you’re willing to work hard and have a good plan, there’s no limit to how far you can take

your small business. Luckily, there are many ways to increase your current cash flow and free you from the

threat of financial disaster.

Consider these strategies to increase your cash flow:

1. Collect feedback. Many small business owners forget the importance of soliciting feedback from their

clients. There are several effective ways to find out what your clients think about your products and services.

• Ask the client to fill out a quick survey or questionnaire to rate various aspects of your business.

These surveys can provide an excellent glimpse into your client’s point of view. There are many

different websites that enable you to create simple surveys. Look online to find one that meets

your needs.

• Follow up with your clients with a phone-call or email asking for comments about your products

or services. Inquire about which aspects they are satisfied with and which need some work.

• Talk to your clients in person and ask them how they feel about their experiences with your

business.

• Remember, word of mouth is one of the best ways to advertise your business. If you have a

bunch of satisfied customers, they’ll tell their friends and family about their positive experience and

you’ll get more business.

3 PROVEN STRATEGIES FOR SMALL BUSINESS OWNERS TO INCREASE CASH FLOW DR. TERESA R. MARTIN

Page 41: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

2. Get rid of products that don’t sell. It’s likely that

you offer your customers a wide variety of products,

but only a few of these products bring you maximum

profit.

• Sometimes a large inventory can work

against your business. Customers often

avoid buying altogether when they’re

overwhelmed with options.

• Instead of offering more products that

likely won’t be sold, trash the

unattractive products and offer more

items or services related to your best-

sellers. This is an excellent way to boost

sales while reducing upkeep and

inventory costs.

• Think about marketing your business online. It’s

becoming easier with each passing day and more

people are prone to search the internet for better

deals. Businesses that have online order options

are often much more successful. It’s a perfect

way to increase cash flow.

• Get the word out. Take advantage of social media

sites like Facebook and Twitter to promote your

business.

• Radio advertisements, commercials, billboards,

and flyers all increase the visibility of your

business. Sometimes, door-to-door marketing is

just as effective.

By using these strategies you can boost sales and

increase the revenue of your business. Once these

strategies have been implemented, there will be no

need to worry about how you’re going to pay the next

bill. You’ll finally have the money to live the life that

you’ve dreamed of.

3. Pursue unique marketing strategies. If your

business is experiencing a steep drop in sales, there

must be a reason. It could be that your marketing

techniques are simply not as effective as you

thought. Consider alternative marketing techniques.

3 PROVEN STRATEGIES FOR SMALL BUSINESS OWNERS TO INCREASE CASH FLOW DR. TERESA R. MARTIN

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It just requires determination, persistence, creativity, and an open mind to make your business successful.

Test different strategies and stick to the ones that work best for you. Your efforts will be worth it once you

see those increased profits.

Dr. Teresa R. Martin

Dr. Teresa R. Martin, Esq. is the founder of Real Estate Investors Association of NYC (REIA NYC).

REIA NYC (www.reianyc.org) is a premier real estate investment association serving the New York

City marketplace. Its primary focus and mission is “helping our members build, preserve, and

harvest multi-generational wealth” in the areas of real estate investments, business ownership and

personal development.

3 PROVEN STRATEGIES FOR SMALL BUSINESS OWNERS TO INCREASE CASH FLOW DR. TERESA R. MARTIN

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oung Entrepreneur John Aaron reveals his thoughts on the direction of the Florida market, and

where he sees the most attractive opportunities ahead…

YOUNG SOUTH FLORIDA ENTREPRENEUR LEADS THE WAY IN ENHANCING THE COMMUNITY JOHN AARON

Going from small town to leading a popular brand in the Magic City of Miami, John Aaron demonstrates where

his company is going and what’s possible with serious focus, commitment, and a leap of faith.

Page 45: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

If you’ve ever heard of Sebring, Florida you know it is a little town without much going on. That’s were John

Aaron grew up. There aren’t many options when you grow up in that type of environment. If you do really well

you might eventually get a job at the local hospital, or perhaps get a football scholarship and a pass to a faraway

college. Sebring doesn’t even have any interstate highways going through it. That didn’t stop this hungry

entrepreneur from pursuing his passion and dream.

During a recent interview with Katrina Campins (The Apprentice) he is described as one of the few next

generation young entrepreneurs that have both hustle and work ethic. Early on he knew he wanted to do

something with real estate, and he believed Miami was the place where you could really make the magic

happen.

Initially starting as an agent John quickly through in the towel and started investing. John formed the Aaron

Organization in late 2012 and began hunting for his own property deals. While he insists that real estate

investing is not a get rich quick gig, his first deal which landed him a check for $19,000 got him hooked and only

emboldened his mission.

In the last four years the Aaron

Organization team has flipped over 200

single family homes in the tri-county

area of South Florida. However, John

tells Realty 411 that more than just

being about the money, his focus and

persistence has really paid off in proving

the ability for you to achieve what you

believe in, in whatever field you are

willing to take a leap of faith towards.

The Aaron Organization has a great

brand and blossoming company culture,

but in John’s words the team is also

winning in “creating something positive”

by enhancing the community and giving

job opportunities.

As John experienced; there will always be the pessimists, the bears, and those that have given up on their

dreams willing to offer their negativity or two cents. Aaron Organization’s founder insists “It’s always a great

market, if you have the right strategy.”

YOUNG SOUTH FLORIDA ENTREPRENEUR LEADS THE WAY IN ENHANCING THE COMMUNITY JOHN AARON

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Aaron Organization is definitely on the rise in

South Florida, and boasts a growing team

including Acquisition Manager Darlenys Castillo

who is young, hungry, and has been with Aaron

organization for 2 years. Darlenys has helped

acquire of over 80 homes and counting. Paola

Vizcaino has been with the Organization for over

a year and is closing transactions every week.

Aaron Organizations thoughts on the market now is that there may be more Florida buyers and investors using

loans for leverage today than a few years ago, but for those that have ever visited Miami; you already know the

international attention it commands and its role as a major global banking stronghold, playground for the

wealthy, and investment haven for wealthy domestic and foreign investors. These are trends only likely to

continue and grow with the recent finishing of the Panama Canal widening which is pegged to dramatically

bolster the Florida economy.

This year John reveals that Aaron Organization has gone beyond its stronghold of renovating single family

homes to enhancing the way of life in the region through developing commercial properties. Miami, Fort

Lauderdale, and West Palm Beach have well built up areas, but despite that fact they still have pockets which

are ripe for development and revitalization. John tells us that this is where the biggest opportunities are for both

having the greatest returns for investors who are seeking better value and spreads than can be found in Miami’s

more congested neighborhoods and districts and also have positive impact for the community.

For investment and partnership opportunities for qualified investors find out more about this firm, its founder,

track record and vision online at AaronOrganization.com.

YOUNG SOUTH FLORIDA ENTREPRENEUR LEADS THE WAY IN ENHANCING THE COMMUNITY JOHN AARON

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IMPROVING QUALITY OF LIFE THROUGH REAL ESTATE INVESTMENT DENNIS HENSON

ennis Henson has been

investing in real estate

longer than most real

estate experts have been

out of diapers. He’s seen the market

from every angle, seen it rise and dip,

and rise again. Today Dennis Henson

heads up the Arlington Real Estate

Association, and the comprehensive

training portal Single Family Fortunes,

which has seen one student recently

soar to acquiring 23 properties in just 8

months. So what’s enabled him to not

only maintain success, but successfully

train others to get in and win?

An exclusive interview with Dennis Henson

on enhancing life while making fortunes on single family…

Page 49: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

Here’s the inside scoop…

How did you get started in real estate?

Dennis: “A combination of moving up from living in a small house to a large one, and badly renting out the

old home, and then reading ‘How To Wake Up The Financial Genius Inside You’ by Mark O. Haroldsen.”

If there is one thing you could credit your success to, what would it be?

Dennis: “Maintaining a burning desire to succeed.”

How did you make

president of the Arlington

Real Estate Association?

Dennis: “I started the group in

order to become more

knowledgeable about REI

Topics. For example; probate.

If I had to do a class on that

subject in front of 50 to 100

people - you can bet I was

going study, learn about that

topic, and master it.”

What’s different about your training system from what else is out there?

Dennis: “Many of the other teachers focus on one technique for examples Short Sales or Wholesaling. The

biggest difference is that my training covers all areas of REI. I call it the 5 M’s of Real Estate Investing.”

1. Mining

2. Money

3. Maintenance

4. Marketing

5. Management

IMPROVING QUALITY OF LIFE THROUGH REAL ESTATE INVESTMENT DENNIS HENSON

Page 50: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

You have students who report achieving very

significant results, very quickly. What makes the

difference between them and the rest of the

wannabe investors out there?

Dennis: “My training is one on one, and I am very

interested in their success. There is nothing magic about

my training. It is just combining knowledge with hard work. I

have a system that works, if they do. ”

You have a slogan "Improving the quality of people's

lives through real estate investing" – what does that

mean to you?

Dennis: “Well that is my motto. My goal in life is helping

others become more successful so that they can enjoy a

better quality of life.

What is a better quality of life? It is being able to have the

freedom to do the things you want to do, going to the

places you want to go, and having the things you want to

have.”

Where do you see the best

opportunities in real estate ahead?

Dennis: “I believe that REI always has, and

always will have the greatest opportunities for

those who are willing to learn and work hard.

The number one need for a human is shelter.

Do you ever watch those survivor reality

shows where they leave someone stranded

in a jungle or on an island? What is first thing

they need? Not water, not food, but shelter. It

is the most basic human need, and always

will be. If there is a disaster people will not be

needing stocks or bonds, or gold or silver, but

they will be needing shelter. So I think REI

will always be a great business for my

students and association members.”

Where do you see the best

opportunities in real estate ahead?

Dennis: “I believe that REI always has, and

always will have the greatest opportunities for

those who are willing to learn and work hard.

The number one need for a human is shelter.

Do you ever watch those survivor reality

shows where they leave someone stranded

in a jungle or on an island? What is first thing

they need? Not water, not food, but shelter. It

is the most basic human need, and always

will be. If there is a disaster people will not be

needing stocks or bonds, or gold or silver, but

they will be needing shelter. So I think REI

will always be a great business for my

students and association members.”

IMPROVING QUALITY OF LIFE THROUGH REAL ESTATE INVESTMENT DENNIS HENSON

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What’s the best strategy for those that fear the market may be in for a correction soon?

Dennis: “Buy lots of properties. When the people are not buying houses, what are they doing for shelter?

Living in a cave? No, they are renting; so the rental market will be booming.”

Interested in learning more about Dennis Henson, his training, and the Single Family Fortunes he has

empowered others to create? Look out for Dennis and his wife Norma at upcoming Realty 411 Expos, listen in

to him speaking on Blog Talk Radio, and visit his website at SingleFamilyFortunes.com, where you’ll find a

FREE TRIAL for an online app that helps you evaluate your deals faster.

IMPROVING QUALITY OF LIFE THROUGH REAL ESTATE INVESTMENT DENNIS HENSON

Dennis Henson

Dennis Henson is President of Vanguard Marketing and Investments, and founder of Arlington Real

Estate Association of Investors(AREA), one of the largest real estate groups on Meetup.com in the

country!

Find information about AREA here: http://www.meetup.com/realestate-445/

He is the author of “Becoming Wealthy in Real Estate,” an Investor’s Guide to Riches. He is an expert at controlling property

for profit without ever taking title along with many other creative techniques. Dennis has over 38 years in real estate

investing, and has completed numerous,and profitable real estate transactions throughout the Southern United States.

Dennis specializes in single family investing, and is experienced in all aspects of real estate—options, rent to own,

installment land contracts, contracts for deeds, pre-foreclosure, foreclosure, bankruptcy, probate, contracts for purchase

and sales, subject to, wrap around mortgages, seller carry back notes, land trusts, leases, and creative financing,just to

name a few.

As a mentor and teacher, Dennis has helped hundreds of investors off to the right start in this business. He also works with

many experienced investors helping them take their business to the next level. Examples of his teachings can be seen on

his training website at http://www.dennisjhenson.com .

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started off as an airline pilot for a major airline at 25 years of age when the average age to be hired

was 35 years old in 1998. After 9/11 and the almost certain collapse of the airline industry as we knew

it, I felt I needed another path for retirement and possibly another income source to survive. As I was

HOW A STRUGGLING REAL ESTATE INVESTOR BECAME THE CO-FOUNDER OF THE MOST SUCCESSFUL… STEVEN ROSENBERG

seeing airlines all around me going out of business or filing bankruptcy and liquidating pilot pensions for

their own survival, I realized this was serious and the dream of job security was gone forever. As I started to

look outside my world of aviation I found that I was so specialized there was not many other things I could

do to make the same type of income.

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The more I learned the more attracted to the real

estate world I became, mainly because it seemed

to provide the most leverage of time and money

while still allowing me to do what I loved, which

was fly a plane.

I started off doing some wholesale / flipping and

eventually earned up enough capital to buy and

hold. I realized that was a job and not much

leverage except my time, however I had enough

money to buy into an apartment complex

partnership. After holding that for 3 years, myself

and my business partner began to buy single

family homes.

We got to about 20 doors and realized we needed

some management help. After having no luck with

finding a management company that we felt

comfortable with we decided to create our own

company for self-preservation through the eyes of

an investor (our own).

After fixing our problems and actually running our

properties like a business, they started to make a

decent ROI and we resumed purchasing.

We started to attract other investors asking if we

can fix their problems because there’s were similar

to what our issues were and we were willing to

manage their investment homes. That was the birth

of our management company, Empire Industries

Property Management.

That was about 4 years ago, today Empire

Industries manages over 500 single family homes

in the Houston area and we have had tremendous

success with our business. We have a staff of 20

people and have become experts and educators in

our field.

HOW A STRUGGLING REAL ESTATE INVESTOR BECAME THE CO-FOUNDER OF THE MOST SUCCESSFUL… STEVEN ROSENBERG

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In 2014 we were finalists for the Business Excellence Award for best Marketing and Best Customer Service and

this year we were a finalist in 4 categories (CEO of the Year, Best Customer Based, Best Customer Service and

Best Marketing). We won Best Marketing Campaign in North America with a return of 1474% on our marketing

investment dollars along with complete rebranding of our company and earning the most positive reviews on the

internet than any other management company in the Houston area. We recently won a prestigious Better

Business Bureau award as well. My business partner was the president of the Houston chapter of NARPM, as

well as being on the board for HAR (Houston Association Realtors). I have been fortunate to be invited to speak

to different investing groups around the country, including Canada and have been guests on many radio and

podcast shows. And was just asked to consider being part of a TV reality show helping people in our old

situation. Because I am still an airline pilot and fly internationally I am able to meet with investing groups and

individuals around the globe to enhance our presence with investor clients. I also traveled to Australia as an

international guest speaker to top tier property management companies on my expertise in the industry.

I feel that this truly is an

entrepreneurs story, I would not only

like to share it, but think that I can

add value from not only my

success, but more importantly

discussing our failures along the

way and how we overcame them.

We have doubled our revenue and

tripled our size year over year and

in 2016 we were nominated for

several Business Excellence Forum

awards such as Best Marketing

Campaign, CEO of the Year, Best

Company Culture and many more.

Due to Empire’s overwhelming success, we are growing at an exceptional rate. We have recently opened a

second satellite office in the Clear Lake Area of Houston, we have hired additional staff to manage the increase

in properties that we are taking on and our employees and company continue to receive awards.

Also in 2016, our company received another Better Business Bureau Business of Distinction Award, the

Marketing Department was named one of the top 20 Bloggers in Real Estate across the country and our

Business Development Team won a Business Development Manager of the Year award.

HOW A STRUGGLING REAL ESTATE INVESTOR BECAME THE CO-FOUNDER OF THE MOST SUCCESSFUL… STEVEN ROSENBERG

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We also recently launched the Realty Services side of our company. This means that we can now also locate

properties for investors to purchase and we have the Real Estate Agents working for us that have the knowledge

and expertise to find you the right home or sell your existing home quickly.

Our plans for the immediate future are to continue to add more clients and staff and expand more offices in

Houston and then start looking at other major cities in the state of Texas and around the country.

We believe our business model makes Real Estate Investors profitable while managing their properties like a

business, we have the systems and procedures in place to increase our portfolio of clients exponentially and we

allow our employees to take ownership of their responsibilities and reward them for doing so. At Empire we

believe our future as a company is very bright and would love to talk to you about our management services.

HOW A STRUGGLING REAL ESTATE INVESTOR BECAME THE CO-FOUNDER OF THE MOST SUCCESSFUL… STEVEN ROSENBERG

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Non MLS Investing in SoCal

By JJ Nocco

Whether you Buy & Hold or Buy & Flip, as investors our priority is finding Great Real Estate, in a Hot Area for reasonable prices so we can do

business with it. This usually means investing out of our local areas or out of state which brings its own set of problems. Traditionally

acquiring Foreclosures and Auction Real Estate in SoCal was always risky and expensive due to investor bidding wars and real estate agents

driving up costs.

Now, we have changed the game!

For the last several years, our longstanding banking and mortgage relationships have allowed us to cherry pick non MLS properties in Hot

SoCal areas of our choosing at max cost of about 70% with no competition. Yes, we can access individual properties not buy a tape of mixed,

good, bad and ugly properties. After selecting what we want, we work up a detailed improvement plan to maximize resale value, then we

have our tried and true contractors handle all the improvements to our specifications. We are growing and are offering you the opportunity

to join us.

We are seeking JV Partners who meet the following qualifications:

Minimum $50,000.00 or more plus 1 X 10% Agent Fee*

Minimum term of 12 months

As our JV Partner you are able to evaluate our available inventory meeting your investment level. If you are in the local area, you can visit and walk

thru various properties (if not in the area, we have video tours coming soon). You are free to review the planned improvements via our detailed

scope of work outlines including the APR projection. When you select your property, your funds are deposited in escrow and your name is on title

with us securing your investment. We are completely transparent with our JV partners and you can visit your property anytime during the remodel.

We also partner with a couple of realtors who have a pipeline or prequalified buyers looking for a new home and work closely with them to

promote our almost completed JV projects. With this turn key system in place we are able to we are able to modify and move properties quickly

and keep you, our investors, happy and prosperous.

562-477-9034 [email protected]

Contact:

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ost real estate investors are aware they can use their self directed IRA to invest in real estate. I

have quite a few posts on this topic. If you are familiar with any of these prior posts you probably

know I am not a fan of the self directed IRA unless you are dealing with ROTH funds or you plan

DOUBLE YOUR RETURN WITH A TAX EFFICIENT 401K STRATEGY CLINT COONS

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If you are familiar with LLCs and their creation, then you should know profits will be split based upon ownership

percentages. If John’s LLC generates $20,000 then John will receive $7,000 and $13,000 will be distributed to

his QRP. From a tax standpoint, John will have taxable income of $7,000 and the QRP will not have any taxable

income from its $13,000 in earnings. Straightforward right. How about the losses? If you recall, real estate is

depreciated over 27.5 or 39 years depending on its characterization. Depreciation is often referred to as a

paper loss because it can be used to offset your real estate income. In my example, the 200k house (175k

allocated to depreciable structures and $25,000 to land) will generate approximately $6,400 per year in

depreciation. John’s will receive $2,240 of the deprecation thereby reducing his income from $7,000 to $4,760

and his QRP will capture the remaining $4,160 depreciation. This of course does not benefit John because his

QRP does not pay tax on its portion of the income.

Consider John who would like to

purchase a house for $200,000.

John has a QRP with 150k and

personal funds of $100,000.

John could purchase the house

in his own name with financing or

he could partner with his QRP to

buy the house. To partner with

his QRP John and his QRP

would need to form a LLC and

divide the ownership proportional

to the contributions from each

member, i.e., if John contributes

$70,000 and his QRP contributes

$130,000 then the ownership

would be divided as follows:

John 35% and his QRP 65%.

to buy and hold one property for an extended period of time. Outside of these two situations I believe the risks

of investing through a self directed IRA do not justify the risks given the IRS current interest in these

transactions. My preference is, and will remain, the Qualified Retirement Plan (Profit Sharing Plan or solo 401k)

which offers the same, and many more, benefits over the self directed IRA. Rest assured this is not another

post on why you should avoid self directed IRA, you can read these prior posts if you are in doubt, but a strategy

wherein you can partner with your QRP to buy real estate.

DOUBLE YOUR RETURN WITH A TAX EFFICIENT 401K STRATEGY CLINT COONS

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Without QRP

$20,000 net rental income

<$6,400> depreciation

$13,600 taxable to John

<$4,080> taxes

$9,520 net income to John

With QRP W/O an Anderson Tax Efficient LLC

$20,000 net rental income

$7,000 allocated to John

<$2,240> depreciation

$4,760 taxable to John

<$1,428> taxes

$16,332 net income to John and his QRP

With QRP and Anderson Tax Efficient LLC

$20,000 net rental income

$7,000 allocated to John

<$6,400> depreciation

$600 taxable to John

<$180> taxes

$19,820 net income to John and his QRP

9520 x (X)=19820

Wouldn’t it be more advantageous if John could allocate all of the losses to him where then can be utilized. Of

course it would and you can if you use an Anderson Tax Efficient LLC. An Anderson Tax Efficient LLC will allow

John to take full advantage of all the real estate depreciation by specially allocating all the losses to John. The

following table shows the tax advantage of using such a structure:

DOUBLE YOUR RETURN WITH A TAX EFFICIENT 401K STRATEGY CLINT COONS

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Clint Coons

Clint Coons is a nationally recognized attorney and author who regularly teaches workshops on

asset protection. His latest book “Asset Protection for Real Estate Investors” is available on

Amazon or his website, www.alglaw.com.

Click HERE for a Free Asset Protection Blueprint Consultation to find out more about how to

properly structure your entity and protect your assets from creditors and other threats.

Partnering with your QRP can produce some desirable tax benefits and opportunities to increase you’re your

overall investment portfolio. However, this is not something you should set up without the assistance of our firm

or another qualified advisor experienced in the tax aspects of LLCs and QRPs. If you would like to explore the

creation of this structure, please call my office to schedule a consultation.

DOUBLE YOUR RETURN WITH A TAX EFFICIENT 401K STRATEGY CLINT COONS

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eal estate investing does not necessarily have to be in your backyard. In fact, with volatile markets

around the world, many investors are expanding their criteria to more diverse international real

estate portfolios. International properties can be much more rewarding, both in affordability and

higher yield. To qualify for the under $50K option you must meet the following requirements: have

an open mind to foreign real estate, an interest in cash flow rather than capital appreciation; and

interested in investing under $50k.

FOREIGN INVESTORS APPROACH TO REAL ESTATE INVESTING UNDER $50K PRITI DONNELLY

Page 65: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

The Prospect

Now that you qualify, let’s take a

look at properties in the Japan

market. Outside of Tokyo you can

easily find properties from $30K to

$50K. Even more impressive is

the yield of 6% to 12% because

prices haven't risen as sharply as

they have in other cities. For

example, in the center of big

cities, or first tier cities such as

Fukuoka and Nagoya you can

expect a yield of 6% to 8%. In

second tier cities such as

metropolitan Sapporo, you will find

properties with a yield of 9% to

10%. In the third tier are smaller

townships, albeit with good

profiles, a yield of 10% to 12%, all

net pre-tax. With an occupancy

rate of 93% to 94% properties are

usually occupied bringing your

investment property immediate

income of $250 to $400 a month

on average.

Method

To invest in real estate in Japan,

investors work with an

agent/proxy acting as an

extension of themselves for the

property purchase and

management. This is mainly

because of the language barrier.

As agents/proxies ourselves, we communicate on investors’ behalf

with the property/rent manager, building management company, tax

authorities, and insurance company. Since non-residents cannot open

local bank accounts, by having a physical address and telephone

number in Japan to manage the portfolio, we are able to pay bills,

collect rental income, and transfer/accept overseas funds. In fact, you

actually never need to travel to close the purchase, unless of course,

you want to take a leisurely trip to take in the culture, historic traditions

and breathtaking scenery.

Tenants

Japan is a landlord’s paradise -- high, stable and reliable cash flow, very

affordable, and because of Japanese ethics, tenants are polite, docile,

trouble free, and honest. Living away from your investment property,

you will not need to worry about destruction to your property or

evictions. Of course, the same tenant will not last forever but the

average turnover is quite stable at 4.5 years for singles' units, and

higher for larger family sized units, sometime up to 15 years.

FOREIGN INVESTORS APPROACH TO REAL ESTATE INVESTING UNDER $50K PRITI DONNELLY

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Selling Your Property

Since the market moves very quickly in Japan, properties are listed only a few days before they are sold.

Therefore, if you decide to sell your property, there is usually a buyer ready to purchase. Keep in mind the tax

implications. A property owner, whether foreign or local, who sells a Japanese property within five years can

expect to pay 40% capital gains tax. After five years, the tax drops to 20%.

FOREIGN INVESTORS APPROACH TO REAL ESTATE INVESTING UNDER $50K PRITI DONNELLY

Earthquake Concerns

While the recent earthquakes have not deterred

investors from properties in Japan, we have had

concerns about the effect of earthquakes on

properties. Under a standard policy, earthquake,

tsunami, volcano and flood damages are covered

by insurance policies and insurance is surprisingly

inexpensive, only a few dollars a month. Since the

building itself carries an accumulated funds pool,

any remaining losses not covered by insurance are

generally covered by the pool. As part of the due

diligence process at the time of the purchase, we

check the status of the accumulated funds to

determine whether 100% coverage is necessary.

Page 67: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

Generally, our clients invest in properties for cash flow purposes rather than capital gain. If capital appreciation is

what you are looking for then your ideal market would be Australia, U.K., U.S. and even Tokyo and at a considerable

price. But, for steady monthly income, where yield is high, cash flow is immediate and properties are incredibly

affordable, the real estate market in Japan could be an option to consider to let your cash flow investment journey

begin.

Priti Donnelly

Priti Donnelly is the sales and marketing manager at Nippon Tradings International, a proxy and

buyers’ agency representing foreign investors with purchasing, selling and managing real estate

in Japan. She understands the importance of transparency in today’s international market.

Through her insight, she focuses on breaking barriers and helping investors feel confident about

their overseas property investments. Phone: +1 226 336 4097 / +81 3 4520 9262; Email:

[email protected]; Website: http://www.nippontradings.com

FOREIGN INVESTORS APPROACH TO REAL ESTATE INVESTING UNDER $50K PRITI DONNELLY

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USING A PROBATE LEAD SERVICE CAN MAKE YOUR BUSINESS EFFICIENT AND PROFITABLE LEON MCKENZIE

ave you been working in the probate business for a while and aren’t sure you are making any

progress? Do you find yourself dreading your trips to the local courthouse, frustrated by the amount

of paperwork to sift through, when you could be spending time with friends and family? If this

describes your situation, then it may be time to take a hard look at how using a lead service can

save you time and help make you money.

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Professional probate leads services are designed to fulfill the needs of probate investors in two major areas.

First, by using a probate leads service, you can have access to a customized list of probate leads that are

located in the areas that you choose to target. Secondly, taking advantage of a leads service can make your

business run more profitably and efficiently. These are the main reasons that highly successful probate

investors take advantage of a leads service.

Probate Leads Fuel Your Business

When a loved one passes away, they

generally leave quite a bit of property

behind, which has to be sold by the

Executor of the estate. The Executor

is the court appointed representative of

the individual who has passed away

and has the job of making sure that

legal and tax paperwork is filed in a

timely manner and, once the assets

are sold, will make distributions to heirs

as noted by the will or the court

system.

Gary Digrazia writes, “In my Probate Real Estate business our life blood, of course, is the leads we work.

Estates have real property which needs to be sold to settle the estate. Where do we receive the leads and

how do we have a constant supply for now and future business?”1 This is really a core question for every

probate real estate investor to answer. If you are working in the probate business, then you know that having

access to data is critical in order to move your business forward. As an investor, you certainly can take the

time to visit your local courthouse to see the records in person. When you are beginning your business, this is

probably a good exercise in understanding the process of how probates are filed and what is necessary in

ensuring that the property is sold and the profits are distributed. Taking the time to see and understand the

process can be helpful in gaining a broad understanding of how the probate process works.

That said, taking half a day on a regular basis to visit your local courthouse can become a drain on your

business. In addition to the travel involved in going, there is the use of gas, the time spent parking, paying for

parking if necessary, and then the hours spent finding and locating viable leads. While having access to

viable probate leads is a necessary part of the business, it frankly might not be the best use of your time.

USING A PROBATE LEAD SERVICE CAN MAKE YOUR BUSINESS EFFICIENT AND PROFITABLE LEON MCKENZIE

Page 72: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

Using US Probate Leads Gives You

an Edge

As an entrepreneur, how you spend your

time directly influences the ability of your

business to succeed. Going to the

courthouse week after week can eat up a

good deal of the time that you have

available to actually work your business.

While you are at the courthouse, you

could be sending communications

campaigns, meeting with potential sellers,

networking with attorneys that specialize

in estate law or speaking to business and

community groups in the area, getting

more exposure for your business.

Taking the time to dig through records

simply might not be the best use of your

time. This is the reason that many

probate professionals choose to use a

probate leads service. Said Leon

McKenzie, the CEO of US Probate Leads,

“Our researchers, numbering into the

hundreds, are in county courthouses

across the country finding a never ending

stream of probate real estate leads. This

really puts us in the unique position of

being the only source of probate real

estate leads with such a broad reach into

this niche market. US Probate Leads is

second to none when it comes to both the

quality and the breadth of research that

goes into providing you with prospects that

are both well vetted and favorably located

for you.”2

Having probate leads that are focused on areas and types of

property that you are looking for gives you an edge in the real

estate market. While other probate entrepreneurs might prefer

to get their leads the “old fashioned way” by going to the

courthouse, you can move right to contacting the Executor and

visiting the property. By the time a competing probate investor

finds what they are looking for, you may have already made a

deal! This is one of the most compelling reasons to use US

Probate Leads.

Why Do Executors Want to Sell?

Once a probate has been filed with the courthouse, in order to

have the best opportunity to purchase it at a low cost, you’ll

have to move quickly. Having access to a lead service can

keep you abreast of the changes in your area and immediately

shows you new filings. Finding out as soon as a filing has

been made gives you a distinct advantage in providing you

time to drive by the property and also in contacting the seller.

There are real reasons that you want to have access to this

information so that you can make a deal. While leads are

generally good for up to eighteen months, there are many

Executors that move at a rapid pace once a loved one has

passed away. They may do this for a variety of reasons. If the

USING A PROBATE LEAD SERVICE CAN MAKE YOUR BUSINESS EFFICIENT AND PROFITABLE LEON MCKENZIE

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Executor is struggling with grief, it may be

easier to simply sell the family home to

eliminate the painful memories. Also, if

the Executor lives out of state, they may

feel the need to sell as soon as possible.

This is because they will be facing repairs

and maintenance of a home that they

cannot easily supervise. Selling the home

quickly is a way to eliminate that stressor.

Executors also may need cash in order to

pay bills that have accumulated in the

individual’s name, such as funeral

expenses, tax bills, medical charges or

credit card expenses. By selling the

home quickly they will have cash to cover

these financial needs. The Executor may

also have no one who is willing to live in

the property and may not want to be in the

position of having to rent it out.

All of these reasons are what compels

an Executor to move quickly when

selling a probate property. If you have

access to professional probate leads

then you can take advantage of making

a deal to assist them in moving on from

their family home. This is an important

reason to have a professional lead

service identifying options in your area.

The Professional Probate Leads Process by US

Probate Leads

It might seem too good to be true to be able to have probate

leads delivered into your inbox on a regular basis. With the

US Probate Leads service, you can have just that. Said

McKenzie, “We have relationships with banks and credit card

companies that utilize our service. These contacts have

allowed us to establish a network of Data Researchers

throughout the US. This network coupled with our proprietary

data mining tools and processes allow us to access probate

data at a cost which allows us to provide reasonably priced

information to you. Our network of Data Researchers located

throughout the US provides the first wave of data access. We

couple that with proprietary tools and processes which allow

us to access the data you need.”3

What this means is that every probate investor working with

the experts at US Probate Leads can have access to probate

real estate records without the hassle of sifting through tons of

other types of filings, saving time and effort. McKenzie went

on to say, “We provide all estate-related probates. Most

probate courts also handle guardianships, conservatorships and

cases pertaining to minors. There can be a great deal of excess

USING A PROBATE LEAD SERVICE CAN MAKE YOUR BUSINESS EFFICIENT AND PROFITABLE LEON MCKENZIE

Page 74: PowerPoint Presentation REIWEALTH.pdf · flipping single family rentals, creating turnkey rentals, new development, and small apartment buildings. Investments are short term with

information in these records – information that does

not benefit you as a Probate Investor. We cull those

records out and provide you records that have the

potential for having real estate as part of the estate.”

Once the record has arrived to your inbox, all you

have to do is to contact the Executor and follow up on

a regular basis if it is a property that you are

interested in pursuing. This streamlined process is

what allows probate investors to net huge profits

each and every year.

Finding More than Just Residential Real

Estate with Professional Probate Leads

When you choose to use a professional probate lead

process like the one offered by US Probate Leads,

you may find more than just residential real estate.

Many probate cases have homes, vacation homes,

businesses, commercial property, apartments and

personal property attached to them. This means that

there are many ways to profit. Having access to

information that will propel your business forward is a

powerful tool in a competitive market.

Being able to access information about more than just

residential real estate offers your business the ability

to diversify as well. Instead of simply buying and

selling or holding and renting residential real estate,

you may be able to find a business that will generate

additional cash or add commercial or vacation homes

to your portfolio. Having leads gives you this type of

flexibility which will allow you to adjust to changing

market conditions quickly.

US Probate Leads is the Expert in Probate

Leads Service

Now that you understand why it is critical to have

access to a probate leads service and how the

process works, it is time to take advantage of what

US Probate Leads has to offer. Whether you are a

new probate entrepreneur or you have been in

business for a long period of time, you can be sure

that adding automated data retrieval will give you a

competitive edge in your business investments and

access to the newest properties coming on the

market.

USING A PROBATE LEAD SERVICE CAN MAKE YOUR BUSINESS EFFICIENT AND PROFITABLE LEON MCKENZIE

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Sources:

1 http://activerain.trulia.com/blogsview/1936988/how-do-we-find-probate-leads

2 http://www.usprobateleads.com/RealEstateLeads.aspx

3 http://www.usprobateleads.com/FAQ.aspx

Contact US Probate Leads today for more information on how we can assist you in accessing probate leads

for your county. Our trained, friendly team of probate associates will help you get set up in just minutes. And,

if you are looking for additional support, look to US Probate Leads for software, books, webinars, seminars

and individualized mentoring programs that can take your business to the next level. Call today!

USING A PROBATE LEAD SERVICE CAN MAKE YOUR BUSINESS EFFICIENT AND PROFITABLE LEON MCKENZIE

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ssetAvenue doesn’t just have the money, but prides itself on constantly opening up new in-

demand loan products that enable investors to make power moves with loans that actually serve

them well.

THE NEW AVENUE FOR FINANCING REAL ESTATE ASSETS – LEARN ABOUT ASSETAVENUE TIM HOUGHTEN

So who is AssetAvenue and what do they offer? How are their solutions different from what the real estate

investor has encountered before? AssetAvenue’s VP of Marketing, Jacqueline Thomas gave us the 411…

Capitalizing on the opportunities out there, and securing deals to ensure

a solid financial future is still reliant on the ability to obtain real estate financing.

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THE BACKGROUND - About AssetAvenue

AssetAvenue is an online nationwide direct lender,

offering real estate investor loans on rehab and

rental properties in 44 states. They use technology

to improve the way entrepreneurs borrow money

for real estate investment properties.

In addition, they partner with institutional capital

providers that allows them to offer competitive

rates and friendly loan terms. Their innovative

online platform and propriety data models enables

them to deliver new benchmarks for speed,

transparency and flexibility to borrowers and

brokers; traditional banks and hard money lenders

simply can’t compete.

Their differentiator is providing borrowers with

financing solutions that are completely transparent,

top-notch customer service, and instant online

quotes. They pride themselves in providing real

estate investors with simple, quick and reliable

online lending.

The Rehab Loan

AssetAvenue’s flagship loan product is their rehab

loan. Some unique features of the fix-and-flip loan

product is lower rates than hard money lenders, no

junk fees, free quotes without doing a credit check,

and 10-day funding.

Customers like Scott Moore with BBS Development

have high praise for AssetAvenue’s rehab loan, “I

wouldn’t have been able to close and be awarded

the property without AssetAvenue.”

The 30-Year Residential - Fixed Rate Rental

Loan

Many income property investors haven’t been

finding the love they expected when shopping for

deals and investment property loans. Some

lenders and turnkey property promoters have tried,

but just haven’t been able to create a product that

fits well. AssetAvenue is a mortgage lender

specifically created to fund investors.

Jacqueline Thomas tells us that the

30-year fixed has been in high

demand. “It just makes sense,”

she says, adding: “Our real estate

investors asked for a product that

would expand their investment

portfolio and we delivered. The

new loan product is to finance the

purchase of rental properties,

including single-family homes, two

to four multi-tenant units, condos,

and townhouses.”

THE NEW AVENUE FOR FINANCING REAL ESTATE ASSETS – LEARN ABOUT ASSETAVENUE TIM HOUGHTEN

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Is This The Path For You?

Indicative transactions and references from others on the site reveal both real estate brokers and investors

have found this channel extremely valuable, if not invaluable in saving deals that have run into challenges.

In an industry with numerous financial resources running on impersonal automation, it’s evident that

AssetAvenue truly listens and understands what it takes to set investors up for success. What’s going to be

really exciting is seeing what loan program features this tech- savvy lender will roll out next.

For more information or to get a quote online, please visit:

http://assetavenue.com

DID YOU ENJOY THIS ARTICLE?

FOR ADDITIONAL REAL ESTATE RESOURCES, VISIT THE SOURCE FOR ALL REAL ESTATE: REALTY411

Visit our online real estate world:

Realty411 - http://realty411guide.com

Realty411 Magazine - http://realty411magazine.com

Expos & Events - http://realty411expo.com

VIP Networking: http://realty411guide.ning.com

REI Wealth Monthly: http://reiwealthmag.com

Real Estate Magazines: http://realestateinvestormagazines.com

THE NEW AVENUE FOR FINANCING REAL ESTATE ASSETS – LEARN ABOUT ASSETAVENUE TIM HOUGHTEN

Thomas further explains that rental loan approval is

primarily driven by the property’s rental income, with

minimal requirements regarding personal earnings.

AssetAvenues’ unique features open up alternative capital

and credit for entrepreneurs who are often rejected by

traditional lenders.

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his is Part 4 of a four

part series discussing

how the US housing

market has changed

over the last 100

years and how

today's investor can

prepare to face

investing in the 21st

century. A copy of

this series can be

downloaded from

www.homereplay.com

NEW PROPERTY MANAGEMENT BUSINESS MODEL GARY GEIST

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The Rental Property Investment Model

Successful rental businesses require a competent team to support your operation where each members knows

their responsibilities. Rental operations are largely controlled by the management company's business rules

as well as the goals of the investor. Sometimes the investor may not communicate his requirements well nor

does he monitor current operations closely. Therefore the information provided by the property manager on a

monthly basis must be of sufficient detail to gage the property's performance.

The diagram in Figure 1 shows the controls that can be exerted on rental property - external expenses you

have little control over or those expenses you can control with good financial practices. External expenses are

usually the hardest to predict and therefore the hardest to control, but these costs must be factored into the

investor's business model when deciding to buy the property. The smart investor acquires special tools to aid

in this process to prevent him from buying a "Money Pit". Solid financial controls over the day-to-day

operations are critical to making consistent cash flow each month.

Figure 1 Rental Property Controls

NEW PROPERTY MANAGEMENT BUSINESS MODEL GARY GEIST

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Current Property Management Business Model

Property management companies today have various control

mechanisms that are billed as one of three types of fees

associated with managing property. These fees are not all

inclusive, but do describe how the current business models bill the

investor for management services.

• Management Fees

• Maintenance Fees

• Other Fees.

Management Fees - The most widely known fee colleted by

management companies is the management fee. Generally, this

fee is a percentage of the collected funds each month and can run

from 8% to 15% of collections. This fee covers the company's

general operating expenses and to gives the property manager a

satisfactory profit margin. There are other fee structures in use

like the flat fee which is a single fee per property per month no

matter what the monthly rent. No matter which system is used,

these fees are deducted from the collected monthly rent before

the investor gets his check from the proceeds.

Maintenance Fees - These charges

are for maintaining the property. Most

management companies will send

their own employees to the property to

handle maintenance issues.

Sometimes they use contractors who

will be paid by the property manager

with the bill being passed to the

investor. For services performed by

the management company, the

property manager bills the labor and

material cost for each task and

deducts this bill from the collected

rent. If the bill for work is more than

the collected rent, the property

manager will bill the investor for the

balance.

This process can work well, but this is

where a lot of problems develop

between the property manager and

the investor. Many management

companies only have one labor rate

and they charge all their staff this

labor rate for all tasks, no matter what

employee performs the work. Usually

this rate is set to cover the cost of

their most expensive staff member

and when the work is performed by

junior staff members, the investor gets

billed at the same rate and not at a

lower rate. So when low salaried

technicians making $10 an hour work

on your property, you get charged as if

a highly skilled $30 an hour

technicians did the work.

NEW PROPERTY MANAGEMENT BUSINESS MODEL GARY GEIST

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Many property managers tout the benefits as being

a one-stop-shop for maintaining property, saving

the investor money. But experience working with

different management companies has proven

otherwise. While it is true management companies

can perform general maintenance tasks, there are

questions about the quality of this maintenance

and what the real costs are for these simple tasks?

For the more difficult maintenance tasks, the

property manager's staff may lack the skills or

experience to perform, and if they do perform the

work, they take too long. And because they lack

skills, training and experience, they can not

properly diagnosis the problem to determine what

needs to be fixed. Thus, when the management

company staff tries to fix the problem and can't,

you will have to hire the "expert" in the end. In

either case, it will cost you more.

When the management company performs the

majority of the maintenance, you have a single

source supplier with no competition. This eventually

leads to over pricing on not only labor, but also

material costs on the work orders. In addition,

because of the maintenance staff's inexperience,

you will be buying many unnecessary parts, paying

for larger quantities of material, and not getting the

advantage of local sales on many components and

materials. Always using the management

company's staff to handle maintenance because you

are a "captive client" can be very expensive.

Other Fees - There are many other fees a

management company can charge depending upon

their business model. Here we will only address the

most common one including: Leasing Fees, Check

Writing Fees, Parts Handling Fees, etc. These fees

are deducted from the collected rent each month and

paid to the management company.

• Leasing Fees - These fees cover the

management company's cost for leasing the

property and can be a flat fee or a percentage of

monthly rent. This fee is generally charged when

a property is leased the first time and is not

charged the second time if the property has to be

re-rented within the first year. Some

management companies have a reduced

"leasing fee" for all subsequent times the

property is leased.

NEW PROPERTY MANAGEMENT BUSINESS MODEL GARY GEIST

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• Check Writing Fee - The second service fee is the "check writing fee" and is charged when the

management company pays bills for other vendors, subcontractors, utilities, taxes, or insurance for the

investor. These charges are often on a per check charge and generally run $10 - $25 per check. These

fees are not popular with investors since they should be a cost of doing business and covered by the

management fee.

• Handling Fees - These service fees, maintenance fees and parts handling fees again are charges that

management companies have developed over time to supplement their own business overhead expenses.

Proposed New Fee Structure

The business model described above was based on covering the

cost of property manager expenses for managing the property.

Nowhere in this discussion of this pricing structure was there any

consideration of making profit. The new breed of investor

entering the world of rentals from the stock market and has raised

serious objections to this business philosophy. They are

concerned about every charge - what it was for and why it was

needed. They are requesting justification for all charges including

receipts, labor charges, fees, and all supporting documentation

and the property managers do not like this scrutiny.

Basically the investors want the property

managers to have a "vested interest" in

managing the property by making them

responsible for making a profit each month. If

the property manager always gets 10% of the

collected rent and has his expenses covered

each month, why should he work smarter to

make things better? When tenants move, there

is no rush to get the property re-rented. It is

business as usual and he has his costs covered

whether or not the property is rented. Longer

flip times to flip mean higher the cost and lost

revenue for the investor.

NEW PROPERTY MANAGEMENT BUSINESS MODEL GARY GEIST

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Although in the initial stages of development, this concept would have

two primary components defined as:

• Percentage Fee - This would be a 5% fee paid to the property

manager on all money collected during the month. This would

apply to rents, back rents, pet deposits, late fees, and other fees

paid by the tenants.

• Profit Based Fee - This fee would based on how well the

property manager performed his duties each month. This would

be a great motivator for the property manager causing him to work

harder each month for a more profitable operation. This fee

structure would be negotiated between the investor and the

property manager and but would be in the 8% - 10% range of the

monthly profit.

Summary

If you select a property manager whose underlying goal is simply to

collect the management and leasing fees, pay the salaries of his

maintenance staff, and obtain the over-ride charges on material costs

and hired subcontractors, then you need to look for another property

manager. If you don't, your maintenance cost will sky rocket and the

solution to most problems will be to throw money at the problem.

Their philosophy is its much easier to replace the whole thing as

opposed to diagnosing the real problem to find the cost effective

solution.

Today's investors are interested in

changing the property manager's

compensation package to a profit

driven model. What this means is

that the property manager could

receive a bonus each month based

on a percentage of the monthly

profit for the property. This would

immediately change his

perspective on the property, what

materials are purchased, and how

maintenance is performed.

For instance, if a water heater goes

out, instead of replacing the water

heater for $500 because there is

money in the account, a competent

technician would be sent to service

the burner assembly and relight the

water heater. A $65 service call

instead of the $500 replacement

charge. Or if a furnace goes out in

the middle of the winter, instead of

buying a furnace from the first

vendor called, he obtains several

quotes and save 50% on the job.

Both of these are real examples of

what we have had with property

managers.

NEW PROPERTY MANAGEMENT BUSINESS MODEL GARY GEIST

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AUTHOR'S COMMENT:

If this paper has stirred some thoughts you would like to share and become part of the campaign to change the

property management business model to make it performance driven, please share your thoughts by emailing

to: [email protected]

Finally, as the condition of the rental property deteriorates, so do the class of available tenants who are willing

to rent the property. Generally a property will have a long history of this type of neglect before the Investor

finds out about the problems with the property. Then when action is finally taken, it costs a significant amount

of more money to correct all of the "so called" problems and damages to the property. So good property

management is essential to keeping good cash flow.

Appendix A

Key Questions to Ask a Property Manager

Listed below are questions you need answered before hiring a property manager. Many profess to meet these qualifications, but you need to

verify their performance by talking to current and past clients. As an out-of-state investor it is essential that you find a good property manager

- it will make or break your investment.

General Business Questions

1) How long have you been in the property management business?

2) How many properties do you currently manage?

3) How many staff members do you have working for the company?

4) What type of property management software do you use?

5) Do owners have on-line (read only) access to the property records?

6) Do you have properties of your own that you manage?

7) How do you prevent a conflict of interest arising in filling vacant properties?

8) Are you a member of property management associations or support groups?

9) Can you provide references (must include current investors)?

10) Can I tour some of your managed properties?

NEW PROPERTY MANAGEMENT BUSINESS MODEL GARY GEIST

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Property Leasing Questions

1) Can you have a copy of their Tenant Application for review?

a. What type of personal references are asked for?

b. Are credit references requested?

c. Are the names and telephone number of past landlords requested?

d. Is there a place to list previous evictions?

2) What type of Lease do you require? (1 year, 2 year, etc.)

3) Do you rent to Section 8 Housing?

4) What type of deposits do you require?

5) When do tenants get the keys to the property? (Must be after utilities are in tenant's name)

6) What proof do you require to show utilities have been transferred to the Tenant?

7) What type of tenant screening process do you use?

a. Criminal background check

b. Court records check for evictions/judgments?

c. Credit check?

d. Is it a national based screening process?

8) What is your late fee policy?

9) What is your pet policy?

10) What is your process when tenants are late with their payments?

11) What internal program(s) do you have to get tenants caught up on their rent?

12) How do you handle evictions?

13) What do you do with the judgments against the tenant after eviction?

14) What debt collection service do you use?

15) How successful is the debt collection service you use?

16) How often do you evaluate current market rents?

17) How do you handle rent increases/decreases?

Property Maintenance Questions

1) Who manages your maintenance department?

2) What is their experience and background?

3) What certifications do you have on staff?

4) Can your company pull permits at the county offices?

5) Who are your major suppliers? Do you have accounts with these suppliers?

6) How often do you inspect the properties you manage?

7) How often do you perform drive bys of the properties you manage?

8) How do you find out about code violations?

9) How do you handle code violations?

10) How do you maintain the utilities on vacant properties in the Winter?

11) Describe your "Winterization Program" and how is it implemented?

12) What is you goal for down time on Flips between tenants?

13) Can I tour some properties you have ready to show to tenants?

a. Properties that are owned by the management company

b. Properties owned by your clients

14) What is the dollar amount you spend on Flips before you call the Investor?

15) How many bids do you get for major projects?

16) Do you send cost estimates to the Investor for approval before starting Flips?

NEW PROPERTY MANAGEMENT BUSINESS MODEL GARY GEIST

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