what you learn from running a background check on...

To Trust or Not to Trust...How does the Wizard of OZRelate to Real Estate Investing?

Should I Pay More Than A House Is Worth?

Knowledge • Networking • Opportunities May 2016

What You Learn From Running a Background Check on Yourself

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We are having such a great time building this Real Estate Investors Association!

If I ever need a positivity boost, I look forward to our meetings and that alone makes me smile. I appreciate everyone who comes out because you are all so incredible.

In case you missed our Network Over Breakfast, we announced that we will be adding another meeting: Networking Over Lunch. This will be held on the fourth TUESDAY of the month at Whitey’s Fish Camp. The address is 2032 CR 220, Fleming Island.

We chose Whtey’s for a couple of reasons.• It is on the West side where we can more effectively reach out to Real Estate

Investors in Orange Park and Green Cove Springs.• By adding a lunch and doing it on a different day, we hope our Investors feel they-

have more options to getting the information and assistance they need to create success.

• Whitey’s can a(ccommodate us as we grow the meeting. We would have to get very large to outgrow this location!

We can’t wait for our first meeting on May 24 from 11:00 AM until 1:30 PM. See you there!

Editor's NoteFrom the latest success strategies to the newestinnovations, CONNECT Real Estate Investing is your Go To publication!

Page 4What You Learn From Run-ning a Background Check On YourselfYou will be surprised at what you will learn and what it will teach you about your tenants.

INSIDE THIS ISSUE ...

Page 6Types of Insurance for Property Investors A necessary topic for Landlords and Real Estate Investors, some you have never heard of.

Page 8To Trust or Not to Trust ...Land Trusts are very powerful tools for Real Estate Investors. This article explores the Pros and Cons of Land Trusts in this in-depth article with an entertaining twist.

DISCLAIMER

REAL ESTATE INVESTORS OF FLORIDA - JACKSONVILLE, LLC does not exist to render and does not give legal, tax, economic or investment advice and disclaims all liability for the actions or inaction taken or not as a result. of communications from or to its members, officers, directors, employees and contractors. Each individ-ual should consult his/her own counsel, accountant and other advisors as to legal, tax, economic, investment and related matters concerning real estate and other investments.

Page 10Should I Pay More Than A Property Is Worth?There are times that paying more for a property makes perfect sense. Find out when.


In the process of preparing for an upcoming national REIA conference, I decided to run a background check on one of the attendees: David Pickron. Or, as I often like to call him, “me.”

Before I tell you what I found, let me ask you: have you ever met anyone named David Pickron? Have you even come across anyone with that last name? Chances are you probably haven’t; it isn’t that common.

And yet, my background search showed there are several David Pickron’s spread throughout the United States. A couple David’s are living in Texas, a few can be found in Florida, and there are actually several in Georgia.

As it turns out though, not all of them are quite as law-abiding as I am. In fact, you could say there are a few shady David Pickron’s out there. Even worse, one of them has my exact middle name; his records are littered with robbery convictions, drug charges, and even an assault.

Actual identity matters a great deal to all of us, as rental property owners, because if I were to apply to rent a prop-erty from you, there is a decent chance I would be turned down based on something someone else had done. That might not sit well with me, given that I’ve worked hard all my life to be an upstanding citizen. On an irritable day, it may even help me decide to file a lawsuit against you on the grounds of an FCRA violation.

Of course, the converse is also true — you could easily find yourself renting to one of my more dangerous namesakes while thinking you are getting a hard-working guy with a clean record.

The fact of the matter is that a lot of screening companies like to give you what I call “maybe” results. You give them a name and some background information, and they return with some results. Are those results applicable to the person you want investigated? Maybe they are and maybe they aren’t.

Instant reports can make it impossible for you to know whether a potential tenant is actually a dangerous crimi-nal, and can put you in a bad situation pretty quickly. Just think: if there are several people named “David Pickron” with criminal records out there, how many “Mike Brown” or “Robert Martinez” criminals might there be? If you don’t have the proper identity verification to begin with, your background screening results are going to be compro-mised.

Luckily, there are a few things you can do to protect your-self:

First, always require a state ID and Social Security card – Compare the information on the identification cards to the information you see on the application. In my own investi-gative business, we have seen many applicants using their child’s social security number in an attempt to establish a new credit file with the credit bureaus. Spotting that kind of deception takes someone who can take a close look at the details, and decipher between multiple provided facts on the application.

Second, use an online screening application that authen-ticates their identity with “out-of-pocket questions” that only the real person would know the answer to – The questions are presented in a multiple choice format and ask about information such as: former employers, street addresses, and trades on their credit report.

And third, make sure that the date of birth and Social Security number are exact matches – many applicants with “colorful” histories will change their data ever-so-slightly to trick you without triggering any red flags during the tenant screening process.

The best thing you can do to protect yourself from fraud, not to mention dangerous individuals, is work with a repu-table company employing live investigators. Working with a business like mine doesn’t cost you anything because the applicants pay the background screening fee! Our investi-gators do everything they can to make sure we are looking into the right person, and will give you tips you can use to be diligent when evaluating applicants face-to-face.

When you combine careful scrutiny of an applicant’s ID with the power of live investigators, you go a long way to-wards eliminating “maybe” from your rental decision-mak-ing process and giving yourself the confidence that you know exactly who you’re dealing with. Coming from some-one who was almost convinced he’d been a drugged-up bank robber for second, I can tell you that’s a great thing.

David Pickron has been a licensed private investigator for over 20 years, specializing in tenant screening for real es-tate investment owners and property management compa-nies. His company, Investigative Screening and Consulting (ISC) helps clients get tenants from the initial background check to leasing and payment collection. You can learn more by visiting www.iscscreening.com or calling 1-877-922-2547.

What You Learn From Running A Background Check on Yourself


INVESTIGATIVE SCREENING AND CONSULTING (877)922-2547 [email protected]

Information is Power As we all know, information is power. Whether we are buying a house, investment or screening a new applicant;

information helps us make the best choice possible. In fact, the difference between a good and bad decision is all about

information! Below is a random list of useful facts that will help you analyze your applicants and how they compare to

the averages of the nation.

Useful Facts:

Credit Scores:

Though many creditors have their own models, the model below will help you analyze credit scores.

-Excellent Range: 781-850

-Good Range: 664-780

-Fair Range: 601-660

-Poor Range: 501-600

-Bad Range: below 500

-Average National Credit Score: 664

-Average Rental Credit Score: 625

-Top State with Average Score: Minnesota

-Bottom State with Average Score: Mississippi

Cards and Debt:

-Average Debt Per Consumer $28,496

-Number of Bank Cards Per Consumer 2.18

-Number of Retail Cards Per Consumer 1.54

-Consumer Debt is Closing in on the All-Time High of 2008 $3.407 Trillion Total

Net Worth:

Average Homeowner: $200,000 (mostly home equity)

Average Renter: $5000

Ownership vs Renters:

Homeowners 65% of Population

Renters 35% of Population (slowly rising)

Crime Statistics:

• Sex Offenders 400,000 • Over 2 Million Burglaries per year • Over 16,000 Murders per year

• 30.2% of Population Have Been Arrested Prior to Their 23rd Birthday for Something Other Than Traffic offenses

• 3 Out of 4 Prisoners Will Be Arrested Again Within 5 Years (Study of BJS 2005-2010)


What Insurance to Landlords and Property Investors Need?

Insurance is a topic that is often overlooked by Real Estate Investors and Landlords, even though it is a vital part of every successful property investing career. In the event of a partial property loss, or even a liability lawsuit, if you are not properly insured, you could find yourself financially devastated, your Real Estate Investing career in jeopardy, or worse yet, your life savings wiped out and a large judg-ment against you.

With the proper insurance in place, you can hedge yourself against large losses that could wreak financial havoc. It is important to realize, however, that you must find a proper balance between being insurance rich and cash poor. You want to make sure that the amount you pay in insurance premiums alone does not place a financial hardship on you and your business. If you find yourself in a financial hard-ship due to insurance costs, it may be time to rethink your investment.

It is also important to note that you should always speak with a professional insurance agent to discuss your particu-lar situation and needs.

Every property is different. A property in a coastal area has different insurance requirements than one surrounded by farm land. Under-insuring an investment property, over-in-suring an investment property or having the wrong types of insurance on the investment property can all produce disastrous results.

Types of Insurance for Real Estate Investors and Landlords:

Hazard and Fire Insurance for the

Physical Property• Hazard and fire insurance is always needed.

Liability Insurance• Liability insurance is always needed. You can purchase

liability insurance for the physical property as well as for your actual business.

Sewer Backup Insurance• Sewer backup insurance is always needed and can

be added to your hazard and fire insurance policy at minimal cost.

Flood Insurance for the Physical Property• Flood insurance is only needed if you are in a desig-

nated flood zone, if your property is located in an area that is not designated as an official flood zone but may still have the propensity to flood or if you are worried that a catastrophic flood could destroy your property

• If your area endures a storm such as a hurricane and experiences flooding, your regular hazard and fire insurance policy will not cover your loss. Many home-owners and property investors have unfortunately learned this the hard way when external factors, such as hurricanes, have caused flooding inside their prop-erty. Flooding caused by external water, i.e. not from a burst pipe or a leak in your home, is not normally covered by a homeowners insurance policy. Without specific flood insurance, you could be out of luck in receiving insurance money to help cover the loss.

Terrorism Insurance• Terrorism insurance is only needed if you are worried

that an act of terror could cause damage to your prop-erty.

Builder’s Risk Insurance• Builder’s risk insurance is only needed if you purchase

vacant or mostly vacant property and are renovating the property. Due to the increased risk of vandal-ism, property damage, and contractor ‘slip and falls’, properties that fall into this category will not usually qualify for normal hazard and fire insurance or liabili-ty policies. Your insurance agent will need to provide you with insurance through secondary markets. Lloyds of London is one of the largest secondary insurance providers. This type of insurance is typically two to four times more costly than normal hazard and fire insur-ance or liability policies.

Loss of Income Insurance• Loss of income insurance is only needed if you are a

landlord who owns an investment property that you are renting to tenants. Investors who flip a property with the intention of selling it to a new homeowner do not typically need this type of insurance. Loss of income insurance is usually added to your hazard and fire insurance policy at an additional cost.

Types of Insurance for Landlords and Property Investors


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General Contractor Insurance• General contractor insurance is needed when you

decide to become a licensed general contractor so that you can pull your own permits for renovation jobs at your rental properties.

Workers Compensation Insurance• Workers compensation insurance is needed when you

have employees such as superintendents, maintenance workers, receptionists, or even when you hire con-tractors and allow them to work under your insurance policy.

Umbrella Insurance Policy• An umbrella insurance policy is never actually need-

ed, but it is always a good thing to have as it provides additional liability protection.

This list may seem long, but it is not exhaustive. There are many additional types of insurance that you may need, which is why it is important to have a competent and trust-ed insurance agent on your team to review your personal situation and needs.

About the Author:

Erin Eberlin is the Landlord and Property Investments for About.com and regularly writes articles pertaining to issues for landlords and property Investors

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One of my all time favorite movies is the Wizard of OZ. In spite of the fact that he was a bit of a humbug, the Wizard was actually the guy behind the curtain. He possessed total control yet no one knew his identity. They just knew of the great and powerful Oz. Imagine owning many properties and keeping your ownership private, yet you control exactly what happens with each property… and when!

I’m not talking about shirking responsibility but rather main-taining and protecting your privacy. In today’s digital culture identities are stolen every day. In our world of in-vestment real estate it is very easy to learn what others own. Just look at the prop-erty appraiser website where you live. You’ll find that most people own properties in their own name, even their invest-ment properties. This makes those owners very visible to unscrupulous people who literally look for targets for a game of lawsuit lotto. They figure, if you have property…you have money!

If I go online it will be pretty difficult to learn your bank balance, identify what kind of car you own or find out what stocks are in your portfolio but I bet I can find your home as well as any investment properties you own in your own name. Ok, your investment properties are owned in your LLC you say; well I can then look up the entity on Sunbiz.org to track down the owners of the LLC.

When the Walt Disney Company came looking to buy land in Central Florida keeping the transactions (as well as the buyer’s name) private was critical to avoiding price escalation if the sellers learned the true identity of the buyer. Instead, a number of separate purchases were executed by individu-al land trusts and when the purchases were completed the individual parcels were combined into what we now know as Walt Disney World.

Here in Florida, land trusts are statutory. That means we actually have laws on the books establishing land trusts as a legal method for holding title to real property. In many com-munities, there seem to be more trusts owning houses than individual owners. Land trusts are also frequently buyers and sellers in commercial realty transactions. In fact, whenever

you see the word “trust” or “trustee” after a party’s name, you should know you’re dealing with a trust.

A land trust is contractual legal arrangement created by one party called the “grantor” or “settlor” naming a second party called the “trustee” to hold certain property in the trustee’s name for the benefit of a third party called the “beneficiary.” This is actually easier to understand than it sounds. There are many varieties of trusts created to accomplish different pur-

poses, and many can be-come quite complicated. For our purposes we will only be discussing one type of trust in this article; the land trust.

The primary objective of a land trust is to get cer-

tain property out of the name of the trust’s creator or grantor and put the legal title in the name of the trustee while still having the income or benefits of the property flow to the beneficiary. In many cases the “grantor” and beneficiary are one and the same.

The Florida statute that recognizes land trusts – Section 689.071 – is largely derived from Illinois statutes and case law. Indeed, the popularity of land trusts in Florida is at least partially derived from the fact that many Midwesterners have settled in Florida and brought with them a familiarity with land trusts as a way of holding title to real property.

Under a land trust, real estate is conveyed by deed from the grantor/owner to a trustee who then holds both the legal and equitable title to the property. Florida statutes provide for certain specific provisions that must be put in a deed in order to create a land trust, empowering the trustee to hold, manage and conserve the property.

To create a land trust, the deed must never identify the beneficiary of the trust. Another document, the declaration of trust or trust agreement, identifies the parties, gives the beneficiary the power to make all decisions about the man-agement and control of the property, and requires the trustee to carry out the beneficiary’s instructions. This trust agree-ment is never to be recorded (hence the privacy benefit). This arrangement provides a number of benefits for the trust beneficiary.

To Trust Or Not to Trust... How does the Wizard of OZ relate to Real Estate Investing?

“Here in Florida, land trusts are statutory. That means we actually have laws on the books establishing land trusts as a legal method for holding title to real property. “


The advantages to the land trust beneficiary are numerous:

• Investors, wealthy or famous people, or other parties fearing being the target of harassment or litigation, can keep their interests in real estate private.

• The beneficiary’s spouse has no marital claim on the real estate in trust and does not have to join in conveying the property.

• Members of the public can deal with the trustee as the owner of the property and by law not have to inquire about the extent of his powers or the interests of the beneficiaries.

• ransferring the interest in the real estate becomes easier and less costly to accomplish. The trust beneficiary can transfer effective ownership of the real property by assigning his interest in the trust to another party, rather than by having to execute and record a deed to the real property resulting in a private transaction.

• Judgments against the beneficiary will not attach to the real estate in the trust and hence will not cloud the legal title. A beneficiary’s judgment creditor will be unlikely to even discover the beneficiary’s interest in the trust. However, the beneficiary’s interest in the trust can be attached if a creditor does learn of it.

• The beneficiary’s interest in the trust is personal property and not real estate, therefore a non-Florida resident can, upon death, avoid ancillary probate of his will in Florida. The probate of his will in his home state will suffice to pass his Florida land trust interest as personal property.

• Mortgage financing on land trust property does not be-come a personal obligation of the trust beneficiary, unless the lender specifically requires a personal guarantee from the beneficiary.

• Land trusts do not need a tax ID number. Despite the beneficiary’s interest being personal property, the tax code allows the beneficiary to receive the same tax treatment for the property’s income and expenses as if the beneficiary owned the real estate directly, including deductions and capital gains treatment.

• Maximum business and tax planning flexibility is permit-ted, since a beneficiary can hold his land trust interest individually or as a corporation, partnership, or other business entity. Fractional interests can also be conveyed to a variety of beneficiaries in order to facilitate real estate syndication.

• Non-resident aliens can put U.S. real estate in land trusts and avoid U.S. gift and estate taxes by holding their trust interests in the name of a foreign holding corporation or partnership.

• Land trusts can assist with a “gifting” program in connec-tion with estate planning. A land trust beneficiary can transfer fractional portions of his interest as multiple gifts to different recipients over time, at a discounted valu-ation, thereby reducing the size of his taxable estate at death.

Despite being able to transform real estate holdings into per-sonal property, the land trust is not a total panacea capable of spinning straw into gold. Just like following the yellow brick road on our way to Oz, not every outcome of the land trust is positive.

Problems may be encountered when a land trust is used not just to hold and manage property, but also to develop it or operate a business venture using the real estate. Frequently this involves the trustee rather than the beneficiaries taking on active management tasks in contravention to the land trust statutes.

This runs the risk that the land trust could be taxed by the IRS as a corporation. Even worse, securities regulators could deem the beneficial interests in the land trust to be an illegal securities offering. There is no substitute for proper legal and tax advice from knowledgeable professionals when transac-tions involve multiple players.

The biggest potential problem with land trusts, however, is the possible impairment of a resident’s homestead protec-tion should the resident place his primary residence in a land trust. While the owner occupant can retain their tax exemp-tion, they could forgo certain protection against creditor claims in the event of a bankruptcy. The homestead issues are only a potential problem for one’s primary residence. For investment properties, rehabs and rentals a land trust just might be your best strategy for holding title!

While I am a strong proponent of land trusts, the various advantages and potential disadvantages point out the need for a clear understanding and careful drafting by expert legal counsel. The same goes for selecting an appropriate trustee. Many courses and gurus will say have aunt Gladys serve or have one of your kids who have a different last name. While these strategies can work just fine when all is well, consider how these people might react when they receive an intimi-dating phone call from a litigator on a witch hunt.

While no legal device or strategy is perfect or without down-side risks; the Florida land trust comes as close to being a tool that lets you live happily ever after as you move on down the yellow brick road of real estate investing. See you soon… I’m off to see the Wizard!

About the Author:

Augie Byllott helps people build successful real estate businesses. He is a full time investor, speaker and coach. Having completed over 500 transactions using only 2 bank loans, he teaches win/win investing, creative buying strat-egies and wealth building through asset protection. He is a founding member of Common Wealth Trust Services, LLC. You can find him online at www.CreatingWealthUSA.com.


As a seasoned real estate investor you understand that you make your money when you buy and that is why you need to buy at a discount. The most common “discount buying” strategies are:

• Short sale

• Foreclosure sale

• REO property

• Tax deed sale

• Probate sale

You, of course, realize the profit from your discount buy when you apply your pre-planned exit strategy. The most common exit strategies are:

• Wholesale

• Retail (fix and resell)

• Fix and Rent

• Lease Option

New government regulations have forever changed today’s real estate market. The repeal of the Glass-Steagall Act, and the implementation of the Dodd-Frank and SAFE Acts have forced lenders, buyers and investors to adjust.

To simply continue to pursue the above discount buying strategies and exit strategies will severely limit your invest-ment opportunity and profit margins.

These adjustments have created both problems and oppor-tunities. The problems the seasoned investor faces are:

• Lack of inventory

• Rising prices

• Increased competition

• Falling profit margins

• Increased landlord issues

The opportunities that have been created are primarily in the finance side of the real estate business. The finance side of the business is the note industry. This is an opportunity that the seasoned investor can easily add to their current skill set because the investment philosophy is the same: buy at a discount with a pre-planned exit strategy.

The opportunity of adding this part of the real estate indus-try to your existing business is:

• Record high national inventory

• Up to 70% discount buys

• Way less competition

• Huge returns on investment

• No landlord issues

• Dodd-Frank exemptions

• Government funds can pay you

• Passive income streamLump sum payouts

Take a look at this case study that will yield our very sea-soned REO specialist student 322% in one year, on one deal!

This Investor purchased an $85,725 non-preforming note for $10,862. Now that’s a discount. In addition he had to pay off some other liens, which totaled about $1500.

Since the owner was still living in the property and wanted to stay, our student modified the $85,725, 8.84% loan to a $52,000, 7.75% loan. This reduced the property owner’s payment from $617 per month to $358 per month.

As a part of this debt reduction and loan modification, they applied to the hardest hit funds. In exchange for forgiving debt and modifying loans, these special funds pay up to a certain amount back to the lender. In this case, our student is receiving a check for $30,000 from the state!

The raw numbers:

• Paid out $12, 362

• Received $30,000 plus a $2000 reinstatement fee

• Will also receive $358 per month for 30 years

By the way, this investor purchased 30 deals in his first year with us.

Joe Varnadore bought his first house at the age of 19. He learned the importance of using creative financing. Since then, he has created and brokered more than $30 million in note transactions. He believes that there is a great oppor-tunity for real estate investors to use non-performing notes to acquire properties and seller financing to cash out.Joe currently teaches for The Note School.

Why Would a Seasoned Real Estate Investor Need to Be in the Mortgage Note Business?


The answer is it depends. On what you would say? Well, there are properties out there where the seller will give you some great terms for you to buy their property. When I say terms I mean seller financing, purchase money mort-gages and also called payments over time (sounds nicer in the negotiation).

Seller financing is when the buyer negotiates part of the sales price as a loan to the seller where they will owe them an amount and will make payments to them until the loan is paid off or when something called a balloon is due. A balloon is a mortgage payment that is due when the balance of the loan has not been completely paid off. For example:

• Purchase Price $100,000

• Seller agrees to hold $80,000 in seller financing

• Buyer gives seller $20,000 cash & pays $80,000 in pay-ments over 30 years with balloon due in 5

• In 5 years the buyer may owe $75,000 and will have to pay that amount in full.

The $80,000 in seller financing is typically recorded as a lien on the property where the buyer signs a note as a promise to pay the seller. In Florida the buyer also signs a mortgage providing the property as collateral to the debt. This protects the seller in case the buyer doesn’t pay and allows the seller to take the property back. This is similar to a bank loan except the seller is the bank.

Hope I haven’t lost you that is just how the title process works frankly you don’t have to worry too much on how it is recorded if you have a good title company or attorney handling it.To be blunt the seller won’t offer seller financ-ing, most of the time you will negotiate it. If they do offer it be a little cautious about the terms as they could be one sided.

Seller financing may sound like something rare in residen-tial real estate and it has become that in this day and age. Years ago most properties prior to bank loans becoming so popular were financed through seller financing. Currently it is used commonly in commercial real estate.

Now that you understand what seller financing is let’s get back to our original topic of paying more for the property. If you’re buying a property and the seller is stuck on their

price which is higher than the actual market value of the property there are several options.

Walk away or give them their price with your terms. The terms can include full price with low monthly payments with no interest or very low interest. Be cautious about no interest as there could be imputed interest. (Imputed Inter-est refers to interest that is considered by the IRS to have been paid for tax purposes, even if no interest payment was made.)

Your seller will be unhappy and that is not the business we are in of making sellers unhap-py. Note, there is a possibility of considering the balloon pay-ment as interest talk to your accountant or tax attorney about that (they should have some experience in advanced real estate transactions).

The interest agreed needs to be 50% lower than what you would have paid with a traditional bank loan that amortiz-es over 30 years. Check out the amortization table on a 30 year mortgage and you will be astounded on the amount of interest a typical consumer pays to the bank—that is how banks make so much money.

More important than the total interest is that the property should positively cash flow. If it is agreed to pay the seller $200 a month the property should be netting after all ex-penses more than that amount. This sounds simple and is very important to remember. Buyers must be very cautious about negative cash flow as this can send new investors to the bankruptcy lawyer before their career reaches high gear.

Imagine a situation of a market turn in which rents go down and the buyer would be even more negative than when they started. If they had several properties cash flowing negatively it will be a deep hole to dig their way out of. Take into account all expenses taxes, insurance, vacancy, repairs and management fees.

Take into account the management fees even if the buyer will be managing the property themselves just in case that needs to change in the future. The manager, no matter who it is should also get paid for managing the property, as it is definitely work.

Last thing is to subtract the mortgage from that figure. If

Should I Pay MORE Than A Property Is Worth?

(Imputed Interest refers to interest that is considered by the IRS to have been paid for tax purposes, even if no interest payment was made.)


the property is positively cash flowing there may be a deal. If it’s not cash flowing walk away or renegotiate the terms.

There are certain properties in which paying more is worth the risk. They include newer properties that are in highly desirable areas, properties that generate a substantial amount of cash flow and when the seller provides a high enough loan to value in which the investor brings less cash to the table than they would have when using a bank.

Remember properties in newer areas that are desirable are easier to rent, appreciate faster than other areas and have lower repair expenses due to less wear and tear. Multifamily properties that generate large amounts of cash flow are highly attractive in this situation.

These properties typically generate more cash flow than single family homes and their high amounts of cash flow would allow the mortgage to be paid off faster or would generate substantial positive cash flow.

High loan to values offered by sellers combined with the right terms make properties highly attractive especially when using investors. The low down payment makes the cash on cash return to the investors highly attractive as it is based on the amount of cash they put in the deal.

Caution, the high loan to value must be accompanied

with the right terms of low interest, low monthly pay-ments or both to reduce the risk. Typically the higher the amount of leverage the higher the risk so be cautious and always remember it is about positive cash flow.

Positive cash flow does not matter what the property is worth to a certain degree as long as cash is coming in. It’s like an oil well that keeps pumping.

When paying more than a property appears to be worth an important thought to consider is to never ever specu-late. This is worth repeating: never ever speculate.

What is speculating? When investors take risks based on expected appreciation in the future not on sound fun-damentals of current values. For example, the market is hot it’s worth $90,000 and negatively cash flows. If I buy at a $100,000 today I can sell for $200,000 tomorrow, next week or next month. This is a big risk to take. Some-one will get caught holding the hot potato. The question is will it be you?

About the Author:

Denny Troncoso has been investing in Real Estate since 2010. He is a sitting candidate for his Master’s Degree in Real Estate. Visit his blog at www.BiggerPockets.com.


Over the last few months, I have had some conversations with people about this topic so I thought I would write an article about it.

Now, by no means, am I claiming to be any kind of expert on this. I am merely expressing my opinion and thoughts as well as sharing what I have learned.

I am always reading non-fiction books, listing to audio self help books and have a few favorites on talk radio. This might put me in the nerd category but that’s ok. I enjoy learning and becoming better at the things I love.

I have noticed that I keep hearing and reading the same things. It’s nothing new to any of us but for some reason, we don’t follow these simple steps to become focused and successful.

1. Have written goals We all have heard this before. Write down your goals and stick them on your fridge or on the wall to see every day. This is a great way to keep you goals on the front of your mind, instead of in the back of your mind.

2. Tell other what your goals areThis is very powerful. People do not like to have others see them fail. By telling others of your goals, it makes you work harder to achieve those goals.

3. Plan your goalsDon’t just have a goal, have a plan of attack. It’s one thing to say you want to buy 8 properties in 1 year. But, it’s another thing to have a plan of how to purchase those 8 properties.

4. Surround yourself with positive peopleIf you come across people who tell you that you can’t achieve your goals, why would you continue to listen to them. You will not be successful by listening to negative advice. Too many people take advice from people who have never achieved the thing that they are giving advice on.

Rich people don’t take advice from broke people. If you

want to be rich, do what rich people do. If you want to be in shape, do what fitness people do. If you want to be successful, do what successful people do.

5. Work hardNothing comes easy but, if you have the passion, stay focused and you work hard, you can be successful at anything you have in your sites. Dictate your own success by giving 100%.

So there you have it. It’s nothing new but, very powerful when actually put into action. Don’t just sit on the side lines watching others do the things you wish you could do. Go out there and make it happen. Stay focused and be successful!

About the Author:

Cameron Gaskill is a state-licensed General Contractor (Florida Residential Contractor #CRC1330448) who has been rehabbing homes in Northern Florida for ten years. He is the past President of Jax REIA. For more information, please see www.CameronGaskill.com.

Stay Focused and Be Successful

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