Clear Day Capital

Renters Plan to Continue Renting. Blame Uncertainty

2011-08-24T07:23:00.001-08:00

Do you own rental properties? If you do, take heart for good vacancy rates for the foreseeable future.

People who are renting plan to continue renting. Why? Here are the reasons that I hear:

1. Difficult to get financing

2. Perceived difficulty to get financing, so qualified people don't even try

3. Fear of real estate prices declining further

4. Change of attitude- people don't want the responsibility of home ownership

5. Perception that it is more expensive to own than to rent

The 20 Happiest, Healthiest Cities In America

2011-08-23T15:35:00.001-08:00

2nd High Ranking in the same week!

This time Ogden, UT is ranked one of the happiest, healthiest cities in the U.S.

Farmington is half-way between Salt Lake City and Ogden, so I get the best of both cities.

Read all about it here....

The 20 Happiest, Healthiest Cities In America

One of my basic goals is to be happy and healthy, so I'm glad I live somewhere that supports both of those goals!

The Australian Subject-To Home Purchase

2011-08-23T11:08:00.002-08:00

So I am sitting at the Pizza Factory with an investor friend and he is explaining to his partner how he bought a house last night...

A guy calls from Australia and he needs to sell his house in Layton, Utah NOW! It's been on the market for months with no nibbles an his family is about to leave for Australia to join home for his new job.

The bottom line: The investor is buying the property for $25,000 more than the owner owes on the property, subject to the underlying mortgages staying in place. Included will be some furniture, appliances and a 50" TV!

The buyer is paying closing costs and the monthly mortgage of $1,250 and it should rent for $1,600 or more!

Good deal, huh?

Financing Gets Lower and Lower

2011-08-20T18:43:00.003-08:00

Financing rates for home owners is getting lower and lower. Record low interest rates have made headlines for the last few weeks. The Salt Lake Tribune announced that record low interest rates are fueling re-financing.

That's all well and good for home owners, but what about investment property owners? I'll write some blogs about two situations:

1. A new real estate investor who has two properties purchased on contract who has great credit, W-2 income, but put little money down and has an income level that does not support rental properties without the income from rents. He is trying to get financing for the 3rd time, after being rejected twice.

2. A Real Estate Investor who has held properties for at least 4 years and up to 6 years, has very high credit scores, very high W-2 income, and a lot of cash in the bank. His challenge? He has 11 properties in his name and most have high LTV's.

The New Investor

He has applied at a credit union that said "yes" to the pre-application, and then underwriting turned down the file. He then applied with a portfolio lender that doesn't follow federal guidelines. They said "yes" for two months, and then once again the underwriters said "no."

He is now working with a mortgage bank that has local preliminary underwriting. They have a loan officer that is prepping the file in accordance with the structure of the contract sale and the requirements of the lender. We will make adjustments to the structure of the contract sale to conform with the lending requirements.

The Seasoned Investor with 11 Loans

The 11 loans might kill any kind of refinancing, but we are going to try. He got one loan refinanced with HAMP- a federal loan program. CHASE did that loan and they were outstanding to work with. That one loan will reduced the monthly payment over $400 per month! It makes the property go from break-even to profitable.

Four other loans were rejected by Citibank under the same program. They were a nightmare to work with and ultimately came up with what we considered were excuses. They were incompetent at best. I would never work with Citibank again if I could avoid it.

I'll keep you up to date on both investors. Stay tuned....

Farmington, Utah is 12th on CNN’s ‘best places’ list | The Salt Lake Tribune

2011-08-18T15:37:00.000-08:00

Do you love where you live? I do!

Now CNN is telling the world that I live in one of the "best places" to live in the U.S.

Seriously, read it for yourself!

CNN

http://money.cnn.com/magazines/moneymag/bplive/2011/snapshots/PL4924740.html

Salt Lake Tribune (see the other Utah Cities that made the top 100)

Farmington, Utah is 12th on CNN’s ‘best places’ list | The Salt Lake Tribune

We also used to live in Solon, Ohio. It's the only place we liked as well as Farmington! It's ranked #3 and we still have great friends there.

http://money.cnn.com/magazines/moneymag/bplive/2011/snapshots/PL3972928.html

Low Home Ownership = Good Rental Market???

2011-08-16T20:00:00.001-08:00

So if people don't own a house, does that mean rentals will be in more demand?

Probably....

...unless there is a basic over-supply of houses

...unless children move in with their parents

...unless parents move in with their children

... unless young adults stop getting married

So read this article about home ownership...

U.S. home ownership falls to lowest since 1998 | The Salt Lake Tribune

... and then think about why NOW is a good time to buy real estate:

.... housing prices are LOW

.... interest rates are LOW

.... pent-up demand is HIGH

.... rent vs. price is HIGH

So why are you waiting to invest?

Private Mortgage- Money at High Interest Rates, Secured by Real Estate

2011-08-04T09:41:00.009-08:00

Private mortgages are as old as real estate itself. People borrowing money from other people and then secure their loan using real estate as collateral.

Banks became popular and the lender of choice for most Americans, especially when the U.S. government starting promoting home ownership in the 1950's with the introduction of the 30-year mortgage.

Most Banks Sell Their Notes to Private Investors

Most banks sell their mortgages soon after they originate the loan. Until recently, most were sold to private investors, either directly or through REIT's and/or mortgage backed securities. These were pools of mortgages, all combined and many times jointly owned by multiple investors.

The quasi-governmental mortgage companies FannieMae and FreddieMac now buy 95% or more of the bank loans.

Where Did the Private Money Go?

Private money is still investing in first-position mortgages. The difference is the money is now backed directly by individual properties.

Want to learn more?

Click Here to for a FREE copy of the Private Mortgage Report. It's easy to read and will answer a lot of questions, including:

Increasing security of your loan
Why Private Mortgages are a hedge against taxes
Long Term Income through Private Mortgages
Using Balloon Payments to shorten the length of the loan
Use Private Mortgages for Estate Planning
How to Document Your Loan for maximum security

Want to learn even more?!? The CALL ME! I'd love to talk with you.

David Safeer 801.510.3566

Our Local Hero Wins for Disabled Senior Citizens

2011-07-29T09:45:00.002-08:00

My friend and associate, Anthony Marler, won justice without having to go to court.

Do you remember my first blog post about this? Anthony was denied development rights to his land after the city council declared it a "wetlands." The city attorney warned them that Anthony could sue and that the council's position was indefensible.

Did the city council listen? No-o-o-o-o-o-o!

So, Anthony sued in federal court.

It wasn't much of a fight.

The city capitulated.

Quickly.

Without a fight.

Farr West council permits assisted-living facility - Standard-Examiner

Now the only question is: How much will it cost the citizens for Farr West to pay for the stupidity of their elected officials?

Beware the Homeowners Association

2011-07-23T18:26:00.001-08:00

Did you know that a home owners association can foreclose if you don't pay dues?

They can regulate your lawn? Your garbage?

They can have a "special assessment" that MUST be paid, regardless of how much it is?

Read this, it's a real eye-opener...

Neighbor vs. neighbor as homeowner fights get ugly | The Salt Lake Tribune

Have you ever had a run-in with an association?

Transaction #3 of 52 in 2011: Deep Discount for REO 4-Plex

2011-07-23T13:31:00.006-08:00

Small, multi-family properties have been hit hard throughout the country. In Utah the duplex, tri-plex, and four-plex prices have been hit much harder than single-family homes.

Why Multi-Family Has Been Hit Harder than Single-Family in Utah

The answer is quite simple: Supply and Demand. The supply for multi-family residential is growing as investors try to divest and other investors have problems and the banks foreclose.

Demand is down for two reasons:

People feel that real estate is not a good investment right now- even when it is on sale.
Credit is more difficult for multi-family purchases. Banks are asking for 20% - 25% down. Most banks require this to be cash. Credit needs to be 700+ for most banks. Finally, the new rules limit investors to four properties so active investors that have cash and good credit still won't qualify.

We Make a Bid We Couldn't Refuse

After searching the MLS for properties, we made an offer on a 4-plex. The purchase price plus estimated fix-up was HALF of what the property would have sold for 2-3 years ago.

The bank accepted the offer.

The property will cash flow for years to come.

Far West City Hates Senior Citizens?

2011-07-15T10:11:00.001-08:00

Anthony Marhler is a business associate of mine. He is honest and poured a lot of money into the development of this project only to have it rejected over fear of 24 dissabled senior citizens.

Read the full article:

OUR VIEW: NIMBY anger - Standard-Examiner

He should be allowed to build. What's your opinion?

Transaction #19 of 52 in 2011: We Borrow Private Funds

2011-07-13T18:01:00.004-08:00

Private financing creates wins:

1. We win by having someone we can work with. Not a bank, but a real person that we can talk to about our project, show them our property and work out terms.

2. The private lender wins from much higher interest rates than banks are offering and the securing of a first position trust dead.

We Borrow $45,000 Against a $90,000 House

That right, a 50% loan to value. We borrowed it from a financial friend that we new for over two years before we did our first transaction.

Now that we've done our first transaction, we expect to pay him back soon. When that happens, he said he'd be happy to re-lend it to us for another project!

Does anyone you know what to lend money secured by rental real estate? Let me know!

Bank of America vs. Citizens of Utah: Continued

2011-07-07T22:46:00.001-08:00

Once again, the private sector comes through! The Utah attorney general's office threatened to sue Bank of America, but the Salt Lake City law firm of Mumford West & Snow struck the first blow last week.

Learn more from our friends at the Salt Lake Tribune.

Utah law firm sues to halt Bank of America foreclosures | The Salt Lake Tribune

So, who has a mortgage with Bank of America?

Is Real Estate Better Off without Government Intervention?

2011-07-06T09:40:00.001-08:00

We know that loose lending standards creative financial bubble.

Now it looks like tight lending standards are preventing a housing recovery.

U.S. Housing Recovery Stymied by Government - Bloomberg

My opionion: Government should do less, not more. Set fewer rules and then police them better.

Some Good News: Spring Buying Boosts RE Prices in 13 Major Cities

2011-07-05T20:59:00.001-08:00

The good news continues to come out little by little.

News is always looking in the rear view mirror. This is a glimpse into the rear view mirror of the recent past.

My opinion about Utah? Utah will lag 12-24 months behind the rest of the country.

Why? That's just the way it is here. We saw the impact of the economic downturn late and we'll see the same on the recovery. The same can be said of fashion, hair styles, etc. Another opinion: Our time lag is one of the reasons we have a more stable economy here.

Want more information? Read this article from our friends at the Salt Lake Tribune.

Spring buying boosts home prices in 13 top cities | The Salt Lake Tribune

One area that Utah seems to lead the country in trends? Foods! Smoothies, Kentucky Fried Chicken, A&W, Jello.....

More Buy & Hold Real Estate Investment Opportunities in Utah

2011-07-02T10:20:00.001-08:00

Home sales fall, opportunities for buy-and-hold real estate investors increase.

Why?

1. If people don't buy they need to rent. Buy and Hold investors need renters.

2. If people don't buy, prices stay low. The key to holding is monthly cash flow. The key to cash flow is buying low.

Home sales fall to ‘11 low as first-timers balk | The Salt Lake Tribune

Are you convinced yet that NOW is the time to buy and hold?

Aha! The WSJ Takes Note: Investors Buying and Holding

2011-06-30T05:55:00.001-08:00

I've mentioned that eventually the popular press will catch ip to reality: NOW is the time to buy and HOLD real estate.

Check out this Wall Street Journal article. The note that there IS competition for properties- a lot from first time buyers who want to buy and hold.

Can you find them and mange the properties for them? They need professional management or they'll be selling at distressed prices in about two years!

http://blogs.wsj.com/developments/2011/05/26/with-buyers-scarce-investors-rule-housing-market/?mod=wsj_share_facebook

Are YOU buying and holding? Where? How? Why?

Transaction #4 of 52 in 2011: Success! Contract Buyers Refinance with the Bank

2011-06-28T06:00:00.004-08:00

All too often, people who "rent to own" or "lease option" or "buy with owner financing" never complete the transaction- they never own the house.

At Clear Day, our goal is for every person who inters into a "creative financing" purchase with us to complete the purchase so they can enjoy the benefits of ownership that they desire. With Clear Day, the buyer has all of the control- it is up to them to complete the purchase, yet at the same time we are willing to do what it takes to help them complete the purchase, if it is reasonable and legal and a win-win solution.

A Couple Purchases a House FIVE Years Sooner than Planned!

So transaction #4 (yes, this is out of order!) revolved around a couple that purchased a house from us in July of 2010. She had mid-500's credit scores and he had NO credit score! They had been through bankruptcy and he never applied for new credit.

The couple and Clear Day met with a credit repair specialist and he gave us the opinion that they were only six months from having the needed credit to get bank financing. They were stunned! They had been told that it took seven years to qualify for a bank loan and here they were looking at year three and qualifying.

We moved ahead with the sale and they purchased it for about $2,000 more than it later appraised for. The couple immediately started to repair their credit.

Eighth Short Months Later

It did not take six months, it took eight months to get a bank loan. That is still almost 4 1/2 years sooner than they anticipated. The refinancing lowered their interest rate significantly and their monthly payment went down almost $200 per month.

There was one challenge when they refinanced: Their credit scores were about 20 points to low because their debt was about $500 too high. The credit repair coach / mortgage broker said it would take another 1-2 years to get their credit up if they just made monthly payments. Solution? Clear Day lent them another $500 that they used to pay their credit card. Result: Their credit scores went up and they qualified for the loan.

They are happy in their new home. They are happy to have a low-interest, fixed-rate 30-year loan. They are happy with Clear Day to make their purchase and refinance happen.

Foreclosed homes: Fannie Mae and Freddie Mac hold summer clearance sales - latimes.com

2011-06-27T08:48:00.001-08:00

Good idea, but why include only owner-occupied and not real estate investors? We are helping clear-out inventory 2, 3, or 4 houses a quarter. We are their best clients, but we are treated like their worst clients.

Once again, government genius at work.

Foreclosed homes: Fannie Mae and Freddie Mac hold summer clearance sales - latimes.com

If you are an investor, how do you feel about being treated like a second-class client?

With home market in tatters, high-end sector suffers even more | The Salt Lake Tribune

2011-06-25T00:15:00.001-08:00

The market as a whole is down. The high-end down more than entry-level.

We have always focused on entry-level housing. There will always be demand for solid 2-4 bedroom houses with 1-2 baths that rent for $800 - 1,200 per month.

This is what happened to local high-end housing:

With home market in tatters, high-end sector suffers even more | The Salt Lake Tribune

What do you invest in? High-end? Low-end? Somewhere in-between?

Post Recession Real Estate Boom Inevitable: Steve Dexter, Real Estate Expert, Pens Article Predicting Better Times Ahead

2011-06-22T18:44:00.000-08:00

We think there will be a boom in real estate as the economy recovers, so do other investors.

Post Recession Real Estate Boom Inevitable: Steve Dexter, Real Estate Expert, Pens Article Predicting Better Times Ahead

What do you think?

Transaction #16 of 52 in 2011: Investor Refinancing Still Lives!

2011-06-22T15:44:00.006-08:00

Have you heard that it is impossible for a real estate investor to get a loan on an investment property? It's just an ugly rumor!

One of the strategies that we are using when we sell properties on contract to real estate investors with good credit is that we agree:

The investor who buys from us on contract will get an equity line of credit from a financial institution to repay Clear Day Capital as much as possible
Clear Day Capital will carry a second for the balance of the purchase price

Pretty simple, right? Yes!

Transaction #16 was the refinance of a duplex we sold on contract. The refinance went smoothly. It was with Golden West Credit Union and was fairly quick. The biggest challenge was the appraisal was much lower than hoped. Duplexes are on sale and it really dragged the price down.

The good news? We found two banks that are offering up to 75% investor loans- fixed rate and 30 year amortization. You'll have to keep reading to learn more about them.

Buy vs. rent: These days, buying wins - May. 13, 2011

2011-06-20T15:47:00.001-08:00

We don't look at winning vs. losing when we think about home ownership. We think that everyone can win by dividing the seven benefits of home ownership.

If you want to see a traditional view on winners vs. losers in the housing market, take a look at this story from CNN Money:

Buy vs. rent: These days, buying wins - May. 13, 2011

Either way- buy or rent, contact me if you ever want to learn more about sharing the benefits of real estate.

Bryan Ellis Real Estate Letter - SEC May File Civil Fraud Charges Against Credit Rating Agencies

2011-06-17T12:09:00.001-08:00

It's about time. The major companies that contributed to the HUGE miss-steps by note providing the services they were contracted for, and worse- being complicit in misleading investors, the government, and the public should be held accountable.

Bryan Ellis Real Estate Letter - SEC May File Civil Fraud Charges Against Credit Rating Agencies

Transaction #18 of 52 in 2011: We Sell a Property and Take a Long-Term Interest

2011-06-09T15:17:00.003-08:00

Clear Day never wants to sell real estate. Our goal is to have long-term real estate holdings that will bring us income for the next 30 years or more.

Once in a while, we decide that the best opportunity is to sell properties- but we STILL want to have a long-term interest even after we sell. Here is the scenario:

We foreclosed on a property that had one (1) lot with two (2) houses. The first house was a 2 bedroom / 1 bath with a 1-car garage. The second house was a 1 bedroom / 1 bath with off-street parking. Based on rents, the house was worth about $120,000. The problem? Banks won't lend on rent-based appraisals anymore. They will only lend on sold comparable properties.

The real estate investor that had repaired the property had tried to sell it for $120,000 unsuccessfully. The problem? People wanted the property, but appraisals were coming in much lower than justified by rents OR the square footage of the two properties combined. Why? Because the appraisers only county the larger property as "regular" square foot value. The second, smaller house was only counted as an "extra" building- like a shed!

Why was it a shed? Because those are the rules! No further explanation given by the appraiser.

So when we were approached by an investor who liked the property because of the great cash flow, we sold it to him at a slight discount to full price. He received what he wanted- growth, profits, income, tax benefits, and amortization.

We sold it at a discount because he was willing to lease the property back to us and share the cash flow, growth, and amortization. We received what we wanted: a long-term position in the property that gives us ongoing cash-flow from rents and property management as well as long-term profits when the house sells at a much higher price than we can sell it right now.

Here are the approximate numbers:

Income-based property value : $120,000

Sale price to investor : $110,000

Monthly rent : $ 1,300

Monthly property management : $ 130

Quarterly Additional Cash Flow : $ 200

Right now we are lining up more properties for more investors to work with us and share growth, equity, and cash flow. Interested? Let me know.

Why You Need a Good System to Screen Tenants

2011-06-07T17:36:00.001-08:00

The title of this article says it all. If you own investment real estate, be prepared for knots in you stomach when you read this.

Lesson: Careful screening of tenants is NOT an option! The only thing more expensive than a vacancy is a non-paying tenant.

NJ.com : Carter: Landlords say Newark man refuses to pay rent, trashes apartments, then ties them up in court

What's the longest someone has squatted in one of your properties?

Bank of America: The Tables Are Turned

2011-06-05T21:00:00.002-08:00

A small piece of poetic justice... Bank of America refused to settle a lawsuit so the plaintiff foreclosed on the local branch!

This will make you smile!

Sheriff Takes Cash from Bank!

Well... Did you smile?

Let me know if you did!

- Posted using BlogPress from my iPhone

Now is the Time to Use Your Credit to Invest

2011-06-04T14:30:00.001-08:00

We are working with several credit partner investors to get them investment property loans for under 6%

Fixed mortgage rates drops for 7th straight week | The Salt Lake Tribune

Talk to other investors, friends and neighbors and then buy or refinance with great long-term loans.

Transaction 17 of 52 in 2011: I "Broker" a Loan

2011-05-26T18:50:00.003-08:00

More transactions! More deals! More fun!

I help Shawn Watkins of Investors Workshops find some short-term money when a buyer was delayed coming in with funds. So I called a financial friend who had never lent money short-term and asked him if he was interested.

His first reaction was "no," not interested at all.

Second reaction was, "maybe depending on the numbers, please send them to me."

Third reaction was, "this sounds good. I'll probably do it after I review the numbers."

The numbers looked good. $20,000 short-term that would come from an equity line at a low-interest cost to the lender secured by a second dead of trust against the subject property.

The money came in two days later. Shawn closed the transaction. Funds paid back as promised. Our financial friend is ready to do the next one.

Utah vs. Bank of America: Round 2

2011-05-25T18:43:00.003-08:00

As far as government goes, the State of Utah has a good one! They are fighting for the rights of its citizens to have a local office to work with if they are facing foreclosure!

I posted last week that Bank of America is IGNORING a court order to STOP using out of state foreclosure services! When I posted this on Facebook I said "Maybe Utah should SHUT DOWN all Bank of America foreclosures!"

Well, someone must have read my blog because now the attorney general is suing Bank of America to stop using out of state foreclosure processors.

Click here to read the original Salt Lake Tribune article.

Well, don't you love it? A small state sticking up to a GIANT bank to defend it's citizens!

Social Outbreak- The New Tool to Grow Your Social Network & Real Estate Business

2011-05-21T22:26:00.005-08:00

Clear Day Capital just signed up for Social Outbreak, the Facebook application designed to help Fan Pages look good and grow a Fan Base.

Since the tool is new (it is still in Beta Testing) I decided to start a blog to talk about my experience with the application and the company. Check out my new blog:

The Social Outbreak Experience

Let me know what you think!

Bank of America to the State of Utah: You Can Take Your Laws and ...!

2011-05-13T21:06:00.007-08:00

The State of Utah passed a law requiring foreclosures to be done by a local business entity or attorney. Bank of America does not have offices inside the state and they don't work with local attorneys.

So, did B of A stop foreclosures or did they open a local office or did they hire local legal representation? Of course not. They are deemed "too big to fail."

Apparently now they feel that they are "too big" to comply with state laws.

BofA to keep foreclosures despite new Utah law | The Salt Lake Tribune

How Long Will Deep Discounts Last?

2011-05-13T21:01:00.002-08:00

I am often asked, "How long can we keep buying deeply discounted properties?" My best guess: At least three years.

Why?

1. A large current inventory. That should last a year or so!

2. A large number of foreclosures are already in process and they are taking up to two years to process. That means new bank-owned inventory coming on the market for at least two more years. (Take a look at this article and keep reading- things are not getting better, the banks are just slowing down.)

Pace of foreclosure filings slows in Utah, U.S. | The Salt Lake Tribune

3. We are still in a period of high unemployment so we can expect ongoing high foreclosure rates for at least another year.

Add it all up and we are talking 3-4 years of high levels of bank-owned inventory.

Is it a good time to invest in real estate today? Yes.

Will it be a good time to invest in a year? Yes.

Will it be a good time to invest 2, 3, 4, 5...10 years from now? Yes, yes, yes, yes... YES!

Want to invest in Northern Utah but don't know where to begin? Contact me!

Already investing in real estate and want to work with another experienced investor? Contact me!

In a home search? These websites can help | The Salt Lake Tribune

2011-05-13T20:37:00.003-08:00

People ask us "How do we find bargain houses in Utah?" The answer: We have multiple sources.

Are you looking for multiple sources to find a home or investment property? Check out this Salt Lake Tribune article:

In a home search? These websites can help

Peter Fortunato Training- June 11 + 12, 2011

2011-05-11T20:13:00.000-08:00

We use the concepts we learn at Peter Fortunato's classes almost every time we teach real estate concepts at the Northern Utah Real Estate Ivestor's Alliance (NUREIA) or talk to new investors. I'm always asked about when and where his next class will be, so I decided to post his next class information.

Here is a link to his web site: Real Estate Acquisitions Techniques

I've been to the class it it is more than worth the price of admission.

By the way, I don't get any benefit for you to go except a better prepared real estate investor to do more business with.

Transaction #2 of 52 in 2011: We Do a Simple Loan, With a Surprise Ending

2011-05-05T19:59:00.009-08:00

Clear Day Capital started business in 2006 as a lender to real estate investors. As the investment real estate environment changed, so did Clear Day Capital's business. Over the last two years we significantly increased the qualifications of our borrowers.

When a repeat borrower called in early January and told us he needed a loan for $20,000 that could be leaned in first position against three separate single family homes, we said yes. He was reliable, the properties needed repairs but he had a plan for rehab, and the land for one property alone was worth the total amount of the loan.

THE FIRST SURPRISE

The borrower contact us a couple of weeks later. The contractor who was scheduled to bring in the fix-up funds and do the work was no where to be found. Did we have additional funds to loan?

Sometimes we say "yes" to lending more money. In this case, there were several challenges that made us think twice about about lending more money. First, these houses are in locations where we wouldn't normally invest. Second, the two of the three houses where in much worse shape than we normally rehabilitate. Last, the quality of the houses were much lower than we normally invest in (less than three bedrooms, and really small lots.)

So... the answer was "no" to fix-up funds.

THE SECOND SURPRISE

About a week later, the investor came back to us with an update: All three houses were scheduled for destruction by Ogden City. They had been vacant for over four years and destruction was imminent. Without new funds, the best we could hope for was three vacant lots with liens from the city to pay for destruction and scrap removal. Our money would be stuck. Lots aren't selling. Lot's don't bring in rent. Lot's cost money. The liens would be equal to the value of the lots. Lots of problems with lots!

THE SURPRISE ENDING

We decided to take the properties back from the client. We did it as a purchase, without paying cash to the borrower. We took over the note and added additional cash.

To stop the destruction of the properties, Mayor Matthew Godfrey of Ogden Cityrequired us to put funds into an escrow account for each property. We then pulled permits and went to work with our general contractor, Bryan Kawa.

Do you want to read what happened to the properties? Check out my blog posts on Transactions #12-13.

Dead Raccoon- Don't Watch This If You Have a Weak Stomach

2011-04-29T21:04:00.004-08:00

You know it's a tough rehab when dead animals start showing up. Take a look if you want to see one of the interesting places an animal can curl up and die.

By the way, this is transaction #13 of 52 in 2011.

FREE Resource for Creative Real Estate Investing

2011-04-23T13:06:00.002-08:00

RealEstateSuccess.com is a FREE website to learn about creative real estate investing. It is one of Peter Forunato's recommended sites.

Check it out if you are at all interested in investing in real estate. There is a TON of good information.

Transaction #15 of 52 in 2011- Duplex Contract Sale

2011-04-21T11:56:00.005-08:00

Sometimes we sell properties on contract to people who want to own a home but cannot get credit from a bank. We sell it to them and then give them 2-4 years to get their credit put into shape and re-finance with traditional financing.

For this transaction, we sold a great duplex on contract to a couple new to real estate investing but have no cash or real estate investing experience. What they do have is GREAT credit. So we sold them the property with the agreement that they will take out immediate financing from a local credit union that will do a 50% LTV (loan to value) home equity line of credit (HELOC.) We will carry-back the balance of the sale price as a note.

Since the buyer has no property management experience we brought in The Equity Growth Group, a property management company that has experience with multi-family properties. They will master lease the property and sub-lease it to tenants.

This is a real win-win-win. Clear Day Capital gets a full price sale that gets us cashed out and leaves us with a note that gives us monthly income. The new investor couple gets monthly cash flow, property value growth, amortization of their loan, and deprecation tax benefits. The Equity Growth Groups receives the joy (and compensation) of management.

This type of a transaction really works great for a new real estate investors who have good credit. It protects them from a lot of the pitfalls of finding, rehabilitating, and managing the property. It gives them two experienced real estate investment companies to work with and learn from.

Are you a new investor or thinking about investing? Do you want to learn and reduce your risk? Then give me a call at 801.510.3566 and we'll talk some more about this transaction and what you want to accomplish with real estate investing.

Just For Fun- Matzo Man!

2011-04-13T21:20:00.003-08:00

It's that time of year again! Time to celebrate Passover with friends and family. I am heading east with my family to be with my parents, brothers, sister and their families. Our "adopted" brother Bob and his wife Amie and son Ethan will be there as well.

So for all of you who can't celebrate with your family this year, here is a great way to celebrate: with the Matzo Man!

Enjoy.....

Video Blog of Transaction #14 of 52 in 2011- Before (After in a Month or So)

2011-04-05T21:14:00.006-08:00

I asked on Facebook if people prefer video or written blog postings. The answers were mixed so I decided to do both! This is our transaction #14 of 52 in 2011:

We usually don't buy this kind of property, but we needed to salvage a loan that we did so we ended up owning this property at 2053 Adams in Ogden, UT. Drop buy and visit some time if you want to see a rehab in progress (April 5, 2011 until about May 1, 2011.)

It needs a new roof and we need to create a bedroom. Right now it is just a really big studio. We met a next door neighbor today and he had a huge smile on his face when we said "yes" to his question "Are you going to fix-up that place?" It has been vacant for at least four years. How do we know? It didn't have water for the last four years!

You can see why it was condemned for destruction by the city. It's ugly from the outside and there are no bedrooms on the inside! We will spend $18,000 - 20,000 on clean-up, fix-up, and curb appeal. We will have less than $50,000 total investment and a $700 a month rent by the time we are done.

Come back in about 3-4 weeks and I'll have the "after" video ready for viewing.

Transactions #12-14 of 52 in 2011

2011-03-30T12:09:00.006-08:00

Transactions #12-14 are actually directly related to the first transaction of the year. How? Let me explain...

For the first transaction of the year, we lent $25,000 to a real estate investor that we had done business with before. He used the funds to put a down payment onto three properties and the owner carried the balance. One needed light rehab, the other two significant rehab. He told us that he had a contractor lined up and that the contractor would bring in fix-up funds.

Two weeks later he called back. His contractor disappeared. No one to do the work and no fix-up money. What did we want to do? Could we bring in the additional funds? He didn't have the resources. Oh yea, by the way, the city has a demolition order on all three properties and we need to convince Mayor Godfrey to stop the destruction order!

Clear Day Capital was not in a bad position, we had only $25,000 into the project. Worst case, we would have 3 vacant lots. The problem? Demolition is not free and the lots would have liens from the city for the cost of demolition and garbage removal. Lots cost money each year- taxes and insurance. New construction is not something we want to do- rehabs are much easier and less expensive and less time consuming.

We needed to make this a safer, more secure transaction and protect our investment. We wanted to make lemon-aid out of lemons. If we funded our current borrower the LTV would not be good and we would not have control. On the other hand, we didn't want to take the properties back- they did not fit our typical property profile and we didn't want to manage them.

Our original borrower went to our good friends and business associates (Shawn, Angel, and Sarah) at The Equity Growth Group (TEGG.) The borrower knew that they specialize in this type of house. What did they do? They called us since they know that we have capital!

We decided that we would work on this together. To make it safer, Clear Day Holdings purchased the three houses after we got approval from the mayor to delay destruction by 120 days. He required that we put rehab funds into escrow and have a firm bid from a licensed contractor, which we did.

Clear Day Capital provided the additional rehab funds, TEGG provides rehab supervision and property management when the houses are ready to be occupied.

We will be into the three houses about $150,000 total. This is low enough that we will be able to have good cash flow. The key for long-term benefit will be finding private money investors who want to lend us long-term (5-10 years) money and terms that we both win.

Want more details? Send me an e-mail, leave a comment, or give me a call!

Transaction #11 of 52 in 2011- Another House

2011-03-25T11:59:00.002-08:00

When we purchased our first sub-$40,000 property we were really happy and surprised that we could purchase a house so inexpensively and with so little repairs needed. (This was in November 2010 when we purchased a house for $23,900 put $4,000 in repairs into it and rented it immediately for $695/month.)

Now buying houses for under 50% LTV is common and we are purchasing duplexes for under $50,000! So #11 was the purchase of a single family home for $49,500. It needs about $7,000 in repairs. When we are done it will be worth about $99,000 and we will rent it for about $950 per month.

We are now talking to several investors interested in loaning us money for 5-10 years as a first position mortgage holder. They'll earn 8-10% on their money, maybe more!

Transaction #10 of 52 in 2011

2011-03-22T18:54:00.002-08:00

We closed transaction #10 of 52 on the 16th of March. It was a simple cash purchase of a duplex which was already rented and completely rehabilitated about 4 years ago.

We are selling it this week to an investor who likes the terms we can offer. We take our equity over time, he gets cash flow, tax benefits, growth, and amortization.

This was a quick transaction. The keys were our cash and our purchasers ability to use his credit for partial take-out financing. He will give us our cash back in about 2-3 months and then we'll use it to buy another and do this all over again! Let me know if you want to learn more about how we do this.

Transaction #9 of 52 in 2011

2011-03-10T15:41:00.003-09:00

We just completed our 9th transaction of the year. Fairly strait-forward: a single family home in Ogden. Why did we buy it? Cash flow.

The house is a solid, no-frills property in a good neighborhood. It will cash flow:

$900 Rent

- 90 Management

- 45 Vacancy Reserve

- 45 Repair Reserve

- 38 Insurance

- 33 Taxes

$649 Cash Before Mortgage

We will find a private mortgage and pay 7-8% to someone for 10 years or more. They will get a first position lien against the property and a payment of $500 - $550 per month.

Everyone wins! Obviously we win. So does:

The City of Ogden: A rehabbed property
The Tenant: They have a great place to live
The Private Mortgage Holder: Secured, reliable income for a long, long time
The Local Economy: $7,500 in repair costs for materials and labor and $1,000 in closing fees

Would you like to be a part of one of our transactions this year? Let me know at 801.510.3566. We are always looking for people to participate in our projects. There are lots of ways to win and we enjoy working with new people.

Look for transaction #10 by next week!

Transactions #6,7, and 8 of 52 in 2011

2011-02-28T20:44:00.005-09:00

February started out as a slow month, but it closed with a bang with three similar transactions in just three business days.

All three transactions were private money refinancing of properties that we already own. Here is how it works:

Step 1: We paid cash for all three properties in December or January using our own funds

Step 2: We fixed up the houses with our own funds

Step 3: We rented the houses (2 out of 3, still working on #3)

Step 4: We did two CMA's on each property and averaged the two

Step 5: We borrowed 75% of the property's CMA value

Borrowed funds from three different lenders. Two split two houses, one funded the 3rd
5 year term (one has an option to extend 5 more years)
Different financing structures for each, but all have yields targeted at 10% or more
ALL have positive cash flow even AFTER debt service, management fees, taxes, vacancy reserves, insurance, and maintenance reserves

This is a real win for everyone. Interested? Let me know! We are always looking for new financial friends to work with.

Transaction #1 of 52 in 2011- Contract Sale with Credit Partner Bank Loan Cash Out, Retaining Ongoing Cash Flow and Equity Participation

2011-02-12T12:28:00.007-09:00

I committed in my last blog to go back and write about our first four transaction of 2011. (A transaction is a purchase, sale, refinance, or loan.) A transaction allows Clear Day to make a profit- now or in the future.

We started the year selling a Clear Day Capital property (two houses on one piece of land) on contract to a credit partner who used his credit to get us cash so we could pay off our underlying loan. This was a foreclosure property and we sold it for more than we lent on it. If it had been a traditional sale we would have had a break-even or loss due to price discounting and transaction costs, especially a 6% real estate agent commission.

Here is how it worked:

We spelled everything out in a real estate purchase contract.
Our investor/financial friend went onto title to give us joint interest in the property. He also signed a re-conveyance that went to an escrow company in case everything fell apart or something happened to him we could take him off title.
Since he was on title, he was eligible to get a credit union equity line of credit for 65% of the property value.
The credit union loan paid bought out our interest in the property. It didn't quite pay off the loan, so Clear Day Capital took back a 2nd mortgage, behind the credit union, for the balance owed from the sale.
At close we also established a lien for one half of the cash flow and one half of the equity in the property.
Clear Day Property Management leased the property from our investor/financial friend who has no desire to manage properties. CDPM's management fee is 5%, which is low because this is an "in house" deal.
Money will be set-aside each month for vacancies and repairs (5% for each) to build up reserves.
Clear Day Capital will split the cash flow with our financial friend every quarter (after reserves) and eventually split the equity when the property is sold.
Our financial friend get's a the other half of the cash flow and equity. He also receives the depreciation that offsets the income from the property and may help offset his other income as well.

That's it! Pretty simple when it is laid out in writing. Questions? Comments? Let me know!

Transaction #5 of 52 in 2011- Contract Sale for Deed

2011-02-03T14:13:00.004-09:00

The first four transactions are NOT posted yet and I'll try to put them up soon. I wanted to do #5 now for two reasons:

1. It is still fresh in my mind

2. I am presenting it at NUREIA tonight- so please come if you are reading this on February 3, 2011 (click here for more info)

So here it is:

Indian Camp Road Contract for Deed to Mr. Persistent

SITUATION: Four years ago Chapter Two Realty rescued Mr. & Mrs. Iwanastay by buying their house on a short sale and the leasing it back to them at $1,695 per month and selling them a 3-year option for $10,000 with a sell price of $189,000. Now the house has a market value of $165,000 and the Iwanastays decided to build a new house instead.

THE PROBLEM: Current Market Rents are $1,295 and with management fees and vacancy and repair costs, Chapter Two will lose about $388 a month! Chapter Two owes about $171,000 and selling the house in a traditional sale will mean that they need to bring over $16,000 to closing, which is simply not feasible.

PROPOSED SOLUTION: Chapter Two decided to do a contract sale to get a higher purchase price, reduce transaction fees, and have flexible seller terms to maximize their opportunity. They found Mr. & Mrs. Persistent through a realtor who understands creative financing. The proposed sale price is $179,000 with $11,000 down and a 40 month term with an 8.04% interest only contract sale. The realtor agreed to 1.5% now and 1.5% when the house was refinanced.

BENEFITS: Mr. & Mrs. Persistent are able to buy a house now and fix their credit over the next three years. The receive a mortgage tax deduction and the pride of ownership. The love the house. Chapter Two has a $16,000 swing in cash flow and will end up postive by almost $1,000 when the sale concludes at re-finance. They will have no vacancies, no repairs, and no management concerns for 40 months. They have pre-sign reconveyances in case the buyers don't pay.

REQUIRED DOCUMENTS: Note, Trust Deed, Escrow Agreement, Re-conveyance

52 Transactions in 2011

2011-02-03T12:18:00.007-09:00

OK, I know that it has been way too long since I posted. I've just been waiting for something significant to blog about. So here it is...

I have set a personal goal to be a principal in 52 transactions during 2011. That's an average of 1 per week either buying, selling, refinancing, or controlling (i.e. with a master lease) a property.

Each time I complete a transaction I'll post details so you can follow along. Anyone care to join me? My partners and I are looking for:

Really inexpensive properties to buy with cash
Capital to borrow for a 1st or 2nd mortgage
Properties to manage through a master lease
Properties to pay full price with terms that work for us
More people to network with to create win-win deals
We work with residential from SFH to 40 units and with small commercial

Contact me if you want to be part of 1 (or more) of my 52 transactions this year!

NUREIA- New Real Estate Networking Club in Northern Utah

2010-10-30T09:22:00.004-08:00

I've written before about how important education and networking are for most people to become successful real estate investors. A few of my business associates and I decided that we wanted to be proactive in meeting more investors. We know that the more people we meet with on a regular basis the more business we do.

NUREIA- Northern Utah Real Estate Investors Alliance

We are focused on real estate in Davis, Weber, and Box Elder counties. We also have attendees from Cache County. This is an alliance- we are allied in mutual success, in teaching each other, and in doing transparent, honest business deals with each out.

Meetings

We meet formally once a month at the Ogden Golf and Country Club at 6:30 PM for networking, education, food & drink, and fun. Our meeting schedule is as follows:

6:30 Doors Open- Networking, Food & Drink

7:00 Formal Meeting

- Introductions

- Successful Deal of the Month

- Educational Materials Raffle

- Education Topic 1- 15 Minutes

- Education Topic 2- 30 Minutes

8:00 Networking, Food & Drink

The meeting is short, informative and fun. The networking is with people who are brand new to full-time experts. Most important is that people are doing business.

Join us. $10 at the door to help cover costs. Call me at 801.510.3566 if you have questions.

Scam Targeting Utah Real Estate Agents!

2010-09-30T15:20:00.002-08:00

Here is a new fraud: targeting real estate agent in Utah! Read the details below and call the Utah department of real estate if you think you have been a victim or have more questions.

I was not able to confirm this link on the website, but it came from a reliable source. Even if this is not a real scam, it is a good reminder to NEVER give out information over the phone from a source that cannot be verified.

***ALERT***

The real estate industry has long been an advocate of property rights and protecting the public from real estate-related scams. Recently, it has been mortgage fraud, short sale scams, foreclosure rescue scams, loan modification scams, etc. Now, real estate and mortgage licensees have become the target of a scam.

It goes like this. An individual, claiming to be a representative of the Division of Real Estate, is calling licensees and telling them that they have failed to respond to a notice sent out by the Division informing them that they are required to submit updated fingerprints. The individual warns that, due to this failure to respond, the licensee's license is going to be suspended. The individual then claims that this is a courtesy call from the Division, that the licensee may pay a small fee to avoid having his or her license suspended, and that the fee can be paid over the phone by credit card.

THIS IS A SCAM.

The Division will never contact any licensee and ask for a credit card number over the phone. The only licensees who are being required to submit updated fingerprints at this time are mortgage originators who are establishing their records in the nationwide mortgage licensing system (NMLS). All required payments for this fingerprinting are handled through the NMLS website, NOT over the telephone.

If you receive a call similar to the one described above, do not give out your personal information. Do not give out a credit card number. Try to get information that will identify the caller, and report it to the police and to the Division of Real Estate.

The Party is Over: GMAC Halts Foreclosures Amid Pervasive Foreclosure Fraud

2010-09-24T20:23:00.002-08:00

The Party is Over: GMAC Halts Foreclosures Amid Pervasive Foreclosure Fraud

While this doesn't effect Utah directly, GMAC's lack of accuracy on foreclosures is a warning to other lenders.

Small Commercial Projects

2010-08-04T20:07:00.005-08:00

Clear Day Capital has traditionally focused on single family homes in northern Utah. Recently we were approached by a borrower who has done a great job on a couple of projects and he asked us if we wanted to become an equity partner with him on a commercial loan.

It is a fairly small project- under $200,000. The building was a shell that would need to be built-out and tenants put in. Here is the interesting part: projected rents over $3,200 per month. Hmmm..... have you seen the rents on a $100,000 house? Let's be generous and call it $1,000 per month. So two $100,000 houses would bring in $2,000 per month, right?

So if we do the math, this project would bring in 50% more rent for every dollar of capital invested. This sounded so interesting that we decided to fund the project. Sure enough the build-out took less than $200,000 in capital and rents are over $3,200.

Nice....

Introducing the Northern Utah Real Estate Investors Association

2010-07-30T07:11:00.005-08:00

I've written in the past about real estate clubs and how they are a great way to network with other real estate investors. I'd like to announce a new club that will focus on helping real estate investors who live in, or invest in, Northern Utah including Davis, Weber, Box Elder, and Cache Counties.

The focus for the club (known as NUREIA) will be:

Providing education and resources that will help real estate investors make more money
Create opportunities for real estate investors to network amongst themselves
Give value to the club's members and sponsors well in excess of dues, meeting fees, or sponsorship costs

Our meetings are on the first Thursday of every month starting on September 2, 2010.

They meetings are held at the Ogden Golf and Country Club located at 4197 S. Washington Boulevard in Ogden, UT. There is a $15 fee for attending to cover the cost of the room. Beverages and snacks will be served and are included in the admission fee.

Any questions? Give me a call at 801.510.3566 and I'll tell you more!

Real Estate Bubbles- American Style

2010-05-05T10:45:00.002-08:00

Thank you, Uncle Sam (a.k.a. President Obama) for giving an incentive to millions of home buyers to purchase homes and receive government tax credits to do so. The response has been incredible. Sales of homes are up 10%, 20%, or even 22% over last year.

Can we look forward to a decline in volume this month? What about pricing- up or down?

Thanks Uncle Sam for the exciting real estate roller coaster ride!

Real Estate Projects with Clear Day Capital

2010-04-03T18:28:00.005-08:00

Clear Day Capital has always said that we create opportunities for real estate investors. Yet until a week ago we acted only as a hard money lender. Borrow money? OK, but make sure it's paid back in time because there are big penalties if you don't

Along Come the Projects

A week ago we did our first "project" with an experienced investors who purchases, fixes and resells single family homes in northern Utah. He gets:

ALL OF THE CAPITAL he needs to purchase and repair the house- no money out of pocket
LOWER INTEREST RATE to cover our cost of money
MORE TIME to complete the project
NO EXTENSION FEES if the project runs long
FREE CONSULTING on the project- he especially needs curb appeal help

What's in it for Clear Day Capital? We get a piece of the project. Instead of points, we split the profit from the project. Why do we do it? We believe in the project and we believe that we will make more money. We take the time risk with the origination fee.

Since the First Project

Since last week we closed another three projects, similar to the first. One is a rehab, one is a refinance of a completed project, and the last is our first commercial project.

Do You Have a Project that Needs Financing?

If you do, call us at 801.747.7267 and we can talk about a traditional loan or about doing a project together. Either way, we enjoy creating opportunities for real estate investors.

1070 Doxey- Great Street, Lots of Room

2010-03-18T06:41:00.014-08:00

1070 Doxey in Ogden, Utah is a typical, solid home for a family on a quiet residential street.

Like many Ogden homes it is a great investment property because the monthly rent covers a mortgage, taxes, interest, property management fee, repairs and vacancies.

It was gutted and refinished in December 2009.

Rental Information

Annual Rent $10,740

Annual Mortgage 7,195

Taxes 820

Insurance 450

Gross Cash Flow $ 2,275

Property Management 537

Repairs Allowance 537

Vacancy Factor- 5% 537

Net Cash Flow $664

Loan Information

Loan Amount $98,000

Property Value $118,000

LTV 82%

90 Days Waived- A Gift for a Year to Real Estate Investors

2010-02-08T10:34:00.003-09:00

Did you read about the gift given to real estate investors by HUD & the FHA? Someone finally woke up and realized that artificially setting a 90-day waiting period to sell a house backed by government financing was slowing down the revitalization of inner-cities. I'm not sure why it took so long to figure this out, but I am glad they did. Funny thing, it is only slowing down rehabs for a year, then we'll be back to normal.

For one year we can buy and sell houses as quickly as we can and the buyers can receive FHA backed loans. If the house sells for up to 20% higher than it was purchased for, no special paperwork will be required. If it sells for more than 20% of the original purchase price, documentation showing improvements that justify the new selling price will be needed.

There aren't any details about the needed documentation, but keeping all receipts for goods and services that go into improving the property would be wise. Taking photographs and/or video wouldn't hurt for backup documentation.

Tell me what you think. Is this a good idea or a bad one? If it a good idea, why only for one year?

January 19, 2010- New Year's Day!

2010-01-18T19:02:00.004-09:00

Each year as New Year's Eve and Day approach, my mind turns to making goals for the new year. It used to be all about the numbers- how much money, watching my weight, studying a certain amount of time each day, number of daddy daughter dates for the next year, etc. I became fixated on goals that were measurable, realistic, time specific and actionable. As soon as the numbers slipped, even a little, I became discouraged.

A New Year, A New Way of Thinking

On the first of the year I asked myself, "Why can't I start each month with this type of introspection? But then again, what about the beginning of each week? Hey, what about each new day being filled with hope, excitement, and introspection?"

Then and there I decided to, as much as possible, make each day the beginning of a new year. What does that mean?

Everyday day is a day to wake up excited about
Goals can be renewed everyday, regardless of my success of reaching them yesterday
I am continually optimistic about the year in front of me
My family, friends, and partners (not mutually exclusive, one from the other) are cherished in my life and I look for reasons to be with them

How Do I Feel?

Part two to my new year is to continually ask myself, "What do I need to do to feel good about today?" This will answer two questions:

What is important? Accomplishing important tasks makes me feel great!
What do I need to do to take care of myself and the ones I love? Unless I take care of myself and them, I will not feel good about the rest of my life.

Crunching the Numbers

Do I still care about the numbers? Absolutely, but in a completely different way. They allow me to track my progress and keep score, but they do not dictate to me if I am a winner or a loser. I win every day that I make progress- personally or professionally.

What do you do to keep the spirit of the new year alive?

Contract Sales- Make a Good Deal

2009-11-23T08:32:00.008-09:00

You have a house. You want to sell it on contract to a good buyer- fast and full priced. How do you make a good deal and protect yourself.

Let's Make a Deal!

How do you structure your deal to make the most of your willingness to sell on contract? Let's cover the selling price first:

Since you are willing to carry the contract, you should ask for full price. What's full price? First, find 2-3 Pay an appraiser. It will cost you $200-400 and make sure that it's an appraiser that is recommended to you. There are too many appraisers who are afraid to give an accurate appraisal.
You don't not need to pay any closing costs. Don't let anyone tell you that you need to pay 3%- that's only for a government loan. You are not the government. You are not constrained by government rules on seller assistance. Get the full price.

The interest rate will have a significant impact on the month payment from your buyer. Too high and you put them at risk of defaulting on the loan. Too low and you are missing out on a significant amount of profit. Of course the payment will need to cover taxes, insurance and any underlying mortgage.

Next- you need an amortization term. Possibilities? Interest-only, 30-year, 25-year, 20-year, 15-year. (Actually, any number of years would be fine.) Again, this will impact the monthly payment. The longer the term, the lower the payment. It will also impact your taxable income. Shorter terms have more principal paid each month. The principal paid back to you is not taxable.

The term of the loan depends on how long you want the capital to be out. Some people will need 1-2 year balloon payments because they need the cash back fast. Others want a long-term cash income stream that would last for their lifetime. The buyer may have refinancing constraints, such as a bankruptcy or short sale. Common balloon periods are 3-10 years, unless the seller is looking for long-term income.

Protect Yourself

First, get to know your buyer. Sit with them. Understand their story. Then, verify it. Get a background check. Not just a credit score- their credit may be really bad but they could be a great buyer! (See my last blog to read why.) See if they have a criminal background or any other issues other than their credit scores.

Next, make sure that they have a down payment. At least 5%, but 10-20% is even better. You are selling them an expensive asset so they should have "skin in the game." Contract home buyers qualify for the $8,000 first-time home buyer tax credit offered by the federal government. They should also qualify for any state or local tax incentives.

Use an experienced title company to close the transaction. They will protect you through ensuring the transaction is recorded correctly. You will also need a seller's title insurance policy. Your buyer's title insurance is only good until you sell the house.

Set up the monthly payments to go through an escrow company and ensure that taxes and insurance are collected each month. They will also pay any underlying mortgages to protect the buyer.

Need More Information?

This is just a minimal outline of how to do a contract sale. There are tax and legal ramifications of selling a house on contract. You should contract professionals. Expect to pay fees- title company, legal, or even a real estate agent's commission, to close this transaction. Another source of advice would be professional real estate investors.

Don't know any real estate investors? Go to a local real estate investor's club meeting. There are people at the meetings who can help you.

Contract sales are a GREAT way for both parties to get what they want. The more open and honest people are, the more likely a good deal can be struck.

Tell me about your last contract sell, or e-mail with any quesitons!

Contract Home Buyers- Where Are They?

2009-11-17T16:37:00.005-09:00

A couple of weeks ago I wrote about contract sales- the future of real estate. I wrote that the number of contract sales are going up as the number of qualified buyers who can't get traditional bank financing increase, even as more and more home owners are willing to sell on contract.

Questions: Where do you find qualified borrowers who can't get traditional bank financing? Isn't that an oxymoron? By definition, isn't the person who is not qualified to go to a bank or credit union to get a loan an un-qualified borrower? Or is there something special about how a bank works that eliminates a lot of people who would be good people to sell a home to on contract?

Why are the banks automatically disqualifying people?

Two reasons:

#1. There are internal guidelines written by loan policy committees. Underwriters need to follow these guidelines. To get an exception they need approval from higher up in the bank. Who wants to stick their neck out to get an exception to the rules?

#2. There are FHA guidelines. The federal government now buys 90%+ of all loans. The federal agencies will only buy the loans that follow their own guidelines.

Let's take a look at some of the conditions that automatically disqualify some borrowers at a bank that may not disqualify them from buying a house from you on contract.

Those Pesky Bank & FHA Rules

Let's start out with an obvious disqualification- Bankruptcy. This is an easy one. It takes about 3 years for someone who has declared bankruptcy to get a mortgage. Remember, not 2 years and 364 days- 3 years.

Foreclosure- If the buyer is trying to purchase there home back, then the three year rule applies again. We just sold a home back to the original owner of a home that we had purchased 3 years earlier. They tried to apply at about 2 years and nine months and they were told that they had to wait a FULL 3 years.

No Credit- There are people in this world who have always paid with cash who earn a lot of money, but how do you purchase a home without a credit score?

Bad Credit- Have you heard about the 24 year olds working the oil fields and making $40/hr with 20 hours of overtime a week, but can't pay their bills on time? Lot's of cash, really bad credit.

Self-Employed- Even business owners with six-figure incomes and W-2 wages find it harder to get a loan than their employees. This includes doctors, dentists, engineers, accountants, and many other professionals.

Finding Low-Risk, Unqualified Borrowers

So where do you find people to purchase properties on contract? Here are some ideas:

Bankruptcy Attorneys: Many people who just went through bankruptcy now have a lot MORE cash to spend than before. Some of them just lost their homes and need to find a new one. With a clean slate, they could be good purchasers.

Foreclosures & Short Sales: When someone loses a house, they need a new one. The biggest question is: WHY did they lose the house? Was it due to unrealistic financing? Did they pay regularly for 3-5 years and then get killed when the rate adjusted? Good candidates.

People Renting Homes: Often times renters want to own, but the bank is holding them back. Look for single family homes owned by companies or someone who lives out of state.

Human Resources Departments: Employers want a stable workforce. Homeowners are more stable. Companies look for "perks" that cost them nothing. Have a special offer for the employees i.e. $500 RC Willey or Home Depot gift card at closing. Don't forget the military. For example, Hill AirForce base is the biggest employer in Utah.

"Bird-dogs"- Beginning real estate investors often start by finding deals for other people. Get them looking for you.

WAIT- Aren't These People High Risk???!!!

That's why the bank and federal government disqualifies them. Let me ask you something- did the banks do a good job of making good loans? Do you really trust the government to come up with guidelines of who YOU should sell a house to? Besides- there are was to protect yourself when selling on contract that I'll cover in my next blog.

Have you sold a property on contract? Was it a successful sale?

Commercial Real Estate Crisis 2010

2009-11-12T18:47:00.004-09:00

Do you think that the residential real estate crisis is bad? It is. The culprit: financing. First easy money, then no money for buyers.

Along comes commercial real estate, right behind residential. The predictions are that it will be worse. Much worse.

Commercial Real Estate Loan Cycles

Residential real estate loans are generally for 30 years, paid down over the entire time span. Commercial loans can have 20 or 30 year amortization schedules, but they generally have 5-10 year calls. The balance is due in 5-10 years. Generally this means refinancing the property every 5-10 years.

What Happens if You Can't Refinance a Commercial Loan?

It's an interesting thing- a borrower pays year after year on their loan, and then they can't refinance. Do they stop paying? No! Many times payments continue. Does that mean it's a performing loan? Absolutely not. The loan is outside the terms of the agreement and since it hasn't been repaid, it is in default. Yes, in default even though it is being paid each month. From a bank's financial perspective it means the exact same thing as if the loan wasn't being paid.

When a Bank Has a Loan in Default

There are two ways to be in default: 1. Stop paying on the loan each month. 2. Don't pay your balloon payment. Either way the bank bank has to set-up reserves and takes a massive loss.

Welcome 2010- From Bad to Worse

When did the easy financing start? In the early 2000's. So what time is it? Time to refinance all of those easy-money commercial loans! Guess what? Not possible. There is no money for commercial refinancing. The banks have today, and will have many more tomorrow, a massive amount of defaulting commercial loans.

The Opportunity

There will be opportunities to purchase loans that are "performing" from a monthly payment viewpoint but in default because they haven't been repaid. Who will purchase these loans or properties? People with cash. Individuals. Partnerships. REIT's. Hedge Funds. Wan't to get into commercial real estate? Start learning now how to put people together to raise cash and purchase performing assets in default for a fraction of market value as determined by the rents collected and net income on the property.

Agree? Disagree? Interested in putting a commercial real estate investment group together? Let me know. I'd love to talk.

Contract Sales- The Past and Future of Investment Real Estate

2009-10-31T14:21:00.008-08:00

Once upon a time, people owned real estate. They lived there, farmed it, and paid it off if they had a mortgage. When they wanted to sell the property, they often sold it using a contract that they negotiated directly with the buyer. The buyer would bring in down-payment money and then pay the seller over time.

There was no bank qualifying.

The government did not dictate terms of qualifying and condition of the property.

There was no real estate agent.

There was no appraiser.

There was no home inspector.

The county recorder recorded the transaction.

The cost of the transaction was minimal.

People did business with people.

Ch-Ch-Ch-Changes

Over the year, the trappings of the real estate industry became ingrained into the American way of life. More and more government intervention over who can borrow and under what conditions. Banks drove most home purchases through lending practices. The 30-year mortgage became the standard way of life. Appraisers drive prices. Real estate agents block sellers and buyers from talking with each other.

Transaction fees climb higher and higher. Sellers pay 10% or more to sell a house- 6% to real estate agents, 3% towards mandated FHA buyer selling costs, 1% to title and closing fees, hundreds for home warranties, and the list goes on...

Fast Forward to 2009

Bank credit is tighter. Fewer people can qualify due to lost jobs and lower credit scores.

During the years of loose credit and easy qualifying, the art of one person selling a property to another was lost.Only a few "old-timer" real estate investors kept the skill alive- contract sales from one person to the next. Peter Fortunato and Jack Miller are two of the best and they never stopped teaching this art. Even as "no money down", "short sales", and "REO's" come and go as fads, they taught seller financing decade after decade. (By the way, the funny thing is, they charge hundreds of dollars, not thousands or tens of thousands like the infomercial "gurus.")

Where Did All the Bank Loans Go?

The banks are tightening credit standards. At the same time, people are losing jobs and losing points on their credit scores. The government backs almost 98% of all residential housing loans, imposing rules and regulations that add cost and time to transactions. Appraisers are afraid of overstating prices and over-compensate by comparing fully renovated homes to uninhabitable bank-owned properties when establishing market value. They completely disregard valid arms-length contracts between willing buyers and sellers.

So if it's so hard to get an owner-financed loan, what chance does an investor have? Oh, no problem. Just own the property for at least a year, put down 25% cash on the property, have great credit and W-2 wages (as an employee, it can't be your own company) and the loan is all yours!

Contract Sales: Coming Soon to a House Near You

Enter the revival of the contract sale. People want to sell properties. Their buyers can't get a bank loan. Solution? Buyers put down 10% or more and sellers carry the contract. They record the transaction with the county. They decide the market price, and the interest rate, and other terms and conditions of the transaction.

Think you need to drop your asking price to sell your home? Think again. Get flexible on terms. Carry a contract. Name your asking price. Seller financing financing is worth a LOT to buyers who can't get a bank loan. And there are MILLIONS of people who want to own their own home, but can't get a home loan.

Learning How to Do a Seller-Financed Transaction

Want to learn how to do seller contracts? Find an investor who's been around for a while. Go to an investor club meeting and ask. Looking for a meeting? Shaw Watkins has picked up these skills and is passing them on to a new generation of investors. Click on his name and learn more on his web site.

Tell me about your seller-financed deals.

Welcome to Clear Day Capital

2009-10-29T03:19:00.005-08:00

Clear Day Capital provides bridge-loan financing (hard money loans) for professional real estate investors with projects in northern Utah. We listen to our clients, understand their projects, and help them make the project a reality.

New Clients

We work with a limited number of repeat clients that usually have multiple loans outstanding. We carefully screen new clients for experience, capital resources, credit worthiness, and their business plan. If you are interested in becoming a Clear Day Capital client, here is the process:

Call David Safeer at 801.747.6343 and set-up a time to meet
Meet with David for about 1-2 hours for a new client orientation. Please be prepared to discuss who you are, your experience, at what you are trying to accomplish. If you have partners, they should attend the meeting as well.
David will clearly explain Clear Day Capital's underwriting standards, loan documentation, past-due loan policies, origination fees and interest rates, and how to make a formal application to become a client
If there is a mutual agreement that we want to work together, you will make a formal application to become a client by submitting a 1003 (uniform residential loan application) and a current credit report. Click here to get the 1003 form.
Plan that the first project will take 1-2 weeks to underwrite and fund. Subsequent projects should take about 3-5 business days to underwrite and fund.

We want to make the process as easy as possible and at the same time set the foundation for a long-term working relationship.

Contact Information

Clear Day Capital can be contacted at:

801.747.6343 Phone

801.401.7267 Fax

dsafeer@cleardaycap.com

Investor's Workshops- Social Networking For Northern Utah Real Estate Investors

2009-10-26T07:48:00.005-08:00

If you invest in real estate, one of your key success factors will be your ability to network with your peers. They will bring you your next deal, provide you with references for resources you need, and perhaps be your clients.

How Do You Stay in Touch?

Using the phone, in person meetings, mastermind groups, and real estate investment club meetings are all still valid ways of building and maintaining your network. You can add to that your Facebook or Twitter networks if you want to. Even better, join an on-line social network built just for what you are trying to do- invest in real estate.

One example is biggerpockets.com . It has a national footprint and over 40,000 members. I belong to it and I find good general information that I could also read in a book. It is very good for general information and, if you dig hard enough, you can make contacts with Utah investors.

Social Network for Northern Utah Real Estate Investors

If you want to resources for Northern Utah (Davis County and north) then you should join investorsworkshops.com . You can find dozens of real estate investors who focus on northern Utah. You can ask them about resources ranging from general contractors and handymen, to title officers and real estate agents who know how to work with investors.

Set-Up Your Own Social Network

If you have a niche market that you want to have a social network with, try setting it up using SocialSam.com as a platform. Starting at $7.95 per month (less than mailing list software) you can establish your own social network. (Yes, I am an affiliate and we will make some money if you join. You can make money as well off of your network.)

What is your best social networking tool?

Afraid to Foreclose or Evict? Don't Be!

2009-10-08T07:43:00.004-08:00

Sometimes real estate investors are afraid to take action to evict a renter or foreclose on a house they sold on contract. Where does the fear come from? Ignorance of the facts.

Fear that Your Renter/Buyer Will Become Your Enemy

A renter or buyer should neither be your enemy, nor your friend. They should only be viewed as the custodian of your hard-earned asset. They agreed to pay your for the use of the asset while they care for it.

Taking legal action doesn't mean creating an adversarial relationship. Legal action is an extension of the business relationship. Here is an example of how to communicate and maintain a good relationship:

"Mrs. Jones, I understand that you intend to pay the rent on the 15th day of the month, instead of the 1st, when it was due. We'll look forward to receiving the rent on the 15th. In the mean time, you'll understand that we are giving you a 3 day pay or vacant and moving forward with the eviction process. As you as you have paid the rent, we'll be able to stop the process. We look forward to having you live in this home for a long time."

Fear that Legal Action Will Delay Your Payment

I've talked to landlords who say, "They promised to pay and I am afraid that if I start eviction they'll decide to leave and I won't get paid. So, I will do nothing and if they don't pay me next Friday I'll take action then."

The opposite is true. For people who are concerned about paying the rent, they will find the money from friends, relatives, selling something, etc. The legal action becomes a fire that lights them into action.

The other tenants are never going to pay, so the faster they are out, the sooner you have good tenants that will pay you.

Fear That Eviction or Foreclosure Costs Too Much

Not taking action costs more. If your rent is $800/month and you wait for two weeks to take action, you just lost $400. In the state of Utah an eviction takes 3 weeks. Late on the first? Have them out and re-rent the house by the first of the next month. Need help? Attorney Ron Dunn will evict for $450. Tell him I sent you and he may give you a discount. Same fee for a foreclosure. You pay filing costs, he does the rest.

What are your issues with foreclosure or eviction? Share a success story.

There Is Shift From Owning to Renting, Census Data Shows

2009-10-02T15:54:00.005-08:00

Here is an article recently published by MHN Online. I am reproducing it exactly and giving them all the credit. This is important for all real estate investors to know. Even though this article talks about multi-unit housing, there will be a similar effect in the single-family home market, duplex, etc. When apartment prices go up, people start looking at single family homes.

Special thanks to David Svikhart of Sperry VonNess for providing the article.

There Is a Shift From Owning to Renting, Census Data Shows

September 30, 2009

By Anuradha Kher, Online News Editor, MHN Online

Washington, D.C.--More families at every income level are facing housing cost burdens, while households with the lowest incomes continue to be disproportionately affected by the shortage of affordable rental housing across the country, according to an analysis conducted by The National Low Income Housing Coalition (NLIHC) on newly released data from the 2008 American Community Survey (ACS).

The data show that renters are paying an increasing percentage of their incomes toward rent. The number of renters with unaffordable housing cost burdens—those spending more than 30 percent of their income on rent and utilities—increased from 16.8 million to 17.4 million from 2006 to 2008. The lowest income renters are the hardest hit: 87.6 percent of renter families earning $20,000 or less are experiencing an unaffordable housing cost burden, compared to 15.3 percent of those earning $50,000 or more. In addition, median gross rents increased from $763 to $824 between 2006 and 2008. The share of units renting for under $500 fell from 16.9 percent to 16.3 percent, as the share renting for $1500 or more rose from 10 percent to 11.2

percent.

The good news for the multi-housing market is that there has been a shift from owning to renting since 2006, as households lost homes to foreclosure or put off the decision to buy in the declining for-sale home market. However, this shift has led to more crowded living conditions for renters, likely as a result of some families doubling up or taking in tenants and larger families moving into smaller, more affordable units. The average household size of renter-occupied units increased from 2.41 in 2006 to 2.44 in 2008. The percentage of occupied housing units with 1.51 or more occupants per room increased from 1.52 percent to 2.35 percent.

“The new ACS data validates the reports we are getting from across the country, National Low Income Housing Coalition President Sheila Crowley says. “More families are renting, rents are going up and the lowest income households are struggling to pay for the most basic necessities. This data was collected before the rapid rise in unemployment, which means the situation today is even worse. As Congress considers giving even more tax breaks to support homeownership, equal attention must go to the diminishing housing choices of low income renters.”

The U.S. Census Bureau recently released the ACS estimates.

Return on $100,000 in a First Position Trust Deed

2009-09-26T10:41:00.005-08:00

My partners Michael and Steven have been talking with me a lot lately about finding people who want to invest in first position trust deeds. We think that there are a lot of people who are in retirement that are looking for income and want a reasonably secure place for their capital. Wall Street is no longer seen as safe, regardless of its short-term comeback during mid-2009.

Where Does the Monthly Income Come From?

For many retirees that is the main question. Their stock portfolio is half of what it was, so they can't spend capital. Michael talks to people all the time that are putting their money into CD's at 1-2% interest, which isn't even keeping up with inflation. Even if inflation is being matched, $1,000,000 in CD's at 2% only pays $20,000 per year! What if you only had $100,000? Is $2,000 a year (about $167/month) really enough to supplement an income?

What if that same $100,000 was lent against a single family, income-producing rental home at 6% annual interest? That would be a $6,000 per year income stream, or $500 per month, 3 times the amount of the CD interest payment.

But What About Security?

After the income stream the question comes up about the current state of the banks and all of the bad loans that have been done and how does someone know that the loan is secured? There are different parts to that answer:

The property is an INCOME PRODUCING property. Make sure that the real estate investor who borrows the money has a good track record and tenants' rent pays the mortgage. If the tenants stop paying, the real estate investor finds new ones. It is part of the business plan for single family homes.
The loan is secured by a first-position trust deed. If needed, you can foreclose on the real estate investor. You will then own the property or you can collect the rents yourself.
You can use a third party escrow service receive the payment from the tenant(s) The escrow service will then send you your payment first, and then the balance to the real estate investor.
Local real estate investors know property values. The values are based on rents, not on arbitrary market demand. When demand to purchase houses goes down, rent demands go up. Your loan is protected by rents much more than by the property value at any given point in time.
This is not something new. Do a Google search on private mortgages and see all of the resources on the web. Web sites, books, companies that broker private mortgages.

The Investment That Keeps on Paying

What about comparing a $100,000 cash gift to to heirs vs. leaving a private mortgage behind? How many recipients of that kind of gift would have the good sense and wisdom to invest it? How many would spend it on a depreciating luxury item like a car, boat, or ATV's for the whole family, or an outright expense like a grand vacation?

If a private mortgage of 10, 20, or 30 years survives the lender, the loan and monthly payments goes to the heirs. It is an inheritance that keeps on giving.

What Are Your Thoughts

Have you used a private mortgage? Do you know anyone who has ever lent on a private mortgage? Do you think that they are safe and secure? Any helpful hints for using private mortgages? Let me know.

Preservation of Capital

2009-09-18T06:02:00.003-08:00

Have you talked to a stock market investor lately? Are they a "half" or a "third"? Depending on who you are talking to, they are down either 50% or 66%.

Have you talked to a home owner in a luxury neighborhood lately? How much are they down? 10%, 20%, 50%?

Both investments are risk-based, so what about low-risk investments?

Bank accounts are paying 1%, less than the rate of inflation- which means your investment is going backwards each year.

Fixed annuities have a reasonable rate of return, maybe 3-5%, but it's a retirement product and it puts you in bed with the government. Want to cash it out before age 55 1/2? Take a penalty from the IRS- it's an early withdrawal.

You see the issue? Where do you put capital?

The Moderately-Priced, Single Family Rental House

Let's look at a single family house investment on a cash basis only. If you invest cash $100,000 in a single family home and the rent is $1,000, that's $12,000 per year. With no expenses, you have a 12% annual return on your investment. With vacancies, taxes, insurance and repairs, you might have 50% expenses. Your cash flow is now $6,000 per year. That's a 6% return on your investment. Year after year, with the return going up as rents go up.

Can the house go away? Disappear from a rumor about the economy? Be stolen? The answer is no. It can burn down, but then it will be replaced by insurance. Of course, a chunk of the value is the land, and that's not going anywhere.

So, the moderately priced single family home's value is supported by the rent and cash flow from the property. There is an intrinsic value to the property from the rent. What is that intrinsic value? It all depends on the economic times and the return an investor is looking for.

Additional Investment Value

When you add to the equation the tax benefits of a rental property, the investment is even higher. If you leverage your capital and borrow some of the investment, the return on your cash continues to grow.

But this is not about capital growth or astronomical returns. This is about preserving your capital. An investment that pays year after year, while the value stays in place.

The Hidden Profits in Real Estate

2009-09-09T19:45:00.006-08:00

I read a great post at investorsworkshops.com from a good friend and great investor, Spencer Erickson. Spencer is a CPA with creativity, personality, and knows creative real estate. His wife, Brittney is also a CPA and runs an accounting firm that specializes in working with real estate investors. Check out precisionaccountservices.com to find a great service for a price real estate investors can afford.

Spencer's article was so good that I asked for permission to post it. Here it is:

I’ve been doing some thinking about the hidden profits to be enjoyed by the brave-soled real estate investor. Often it feels like I’ll have a month where something goes wrong (one of my tenants abandons the house and leaves all there worthless crap without paying rent). At times like these the cash flow might not work out for the month, but I find peace in hidden profits. Let me explain:

There are at least three common ways that real estate investors enjoy profits that don’t show up immediately in cash flow: amortization, appreciation, and tax benefit.

Amortization is my personal favorite of the hidden profits, because it is guaranteed to make the long-term real estate investor very wealthy. True, it might take 30 years, but start early and avoid the temptation to take out those second mortgages when you get a little equity. If you are tempted, stop, think, and use your creativity to make even more money while preserving your equity.

Appreciation is a fun one, but don’t bet the farm on it. I’m well aware that many people made their millions based on real estate appreciation, and I’m hoping that our friend appreciation kicks in a little for me too. Remember that appreciation is a double edged sword; if you never plan to leave the real estate industry, over the long run it might hurt you on purchases as much as it helps you sales. I know that all of us feel like we have a good idea about what prices are going to do, and we are probably right, but there is a chance that that feeling is nothing but indigestion.

Now the boring one: the tax benefit associated with owning real estate can be the best of all the hidden profits. I’m not sure why Uncle Sam is letting us take depreciation on assets that typically appreciate, but we might as well take advantage of it. In my book Heaven is that wonderful place where you realize a positive cash flow and have negative taxable income. If you are doing it right, depreciation will provide this heaven on earth. If you are not phased out (and if you are phased out, I don’t feel sorry for you) you can take up to $25,000/year of rental real estate loss against other ordinary income. At current rates, under that scenario, not only is all of your rental income tax deferred, but you may be able to put a nice check in your pocket each year at tax time (and if you have the discipline to put that money back into real estate, you actually deserve to be rich).

Now before I hear the criticism, let me tell you all that I know that cash flow is king. These are just a few ideas to lift your spirits when king cash flow is visiting someone else.

Thanks ya’ll for reading. I’d love to see some discussion/examples go back and forth on any of these topics. Investors Workshops has been great to provide the site, but much of the content is only what we make of it.

Spencer

Tell me what you think about Spencer post and the hidden profits.

7.5 Reasons Cash is Power in Real Estate

2009-09-07T08:49:00.008-08:00

OPM- Other people's money. One of the first things you learn about real estate- use Other People's Money. That's all fine and good, but have you every learned that Cash is King? And that when you are the King (or Queen), then you have power? So, Cash = King = POWER. How?

Let me tell you how CASH is POWER:

1. Cash Buys You TIme- Want to do more transactions? Use cash. Instead of waiting 2, 3, 4 weeks or more to wait for a bank to approve you for a loan, pay with cash today. How many more deals can you do if you are not waiting an extra 2-4 weeks per deal?

2. Cash Gives You Influence- Send out an e-mail (or tweet) letting your bird dogs and business associates know that you have $250,000 in the bank and that you are looking for great deals. Be ready to take action as the offers roll in.

3. Cash- Private Sellers Love It! Do you think a seller would prefer an offer contingent on financing, or cash? Duh. Will they take less for cash tomorrow than financing in a month or more that may or may not come through? YES!

4. Cash Towards Hard Money Loans- Hard money is expensive, right? Try coming in with a chunk of your own cash and negotiate terms. Clear Day Capital borrowers who drop from 75% LTV to 60% LTV reduce their costs of a loan by 1/3!

5. Cash Discounts from Vendors: EVERYONE takes cash discounts. Don't want to pay up front for incomplete work? Work with the title company that closes your transactions and have them hold the funds so the vendor knows that they're available. When the work is done, have the title company cut the check and have the vendor sign a lien waver.

6. Cash- Banks Want It! You'd think that banks would have enough cash, but they will cut deals for REO properties and short sales if they know there is cash to close immediately. Good luck trying to time a conventional loan with a short sale.

7. Cash Keeps You Out of Trouble: There will ALWAYS be unexpected expenses and unexpected delays in income. When you have cash reserves, your business can "whether the storm." Author Charles Givens, who wrote "Wealth Without Risk" put it simply: "A prolbem that you can solve by writing a check isn't a problem."

7.5 Cash Makes You Feel Good: Don't believe me? Try a couple of experiments:

Experiment 1. You have and extra $25,000 in your bank account. Close your eyes and think about how it makes you feel.

Experiment 2. Go to the bank and cash a check for $1,000 in $20 bills. Hold them, count them, feel them in your hands. How does it make you fell?

What If You Don't Have Cash?

Go find someone who does. Get a cash partner. Work with a hard money lender who can provide money fast. Set aside reserves from profits of each project. Keep building reserves until you get all the benefits of a cash buyer.

Do you have an expample of when cash got you a great deal? Post it and share.

Real Estate Social Networks- Preview the Next Wave

2009-09-03T16:03:00.003-08:00

Want to see the next wave in social networking? Take at preview look at Clear Day Connect, the social network for people who are investing in Northern Utah real estate. Even if you are not targeting Utah, you need to take a look! Why? Here's 7.5 reasons:

1. Social Networking is here to stay and this is a new twist- target social networks.

2. Clear Day Connect is built on the SocialSam.com platform. Starting at $7.95 a month, anyone can start a social network.

3. The SocialSam.com platform allows you to monetize (get payed for!) social networking!

4. Clear Day Connect will have professional real estate investors, property managers, attorneys, and accountants ready to answer questions when in launches in the next 1-2 weeks.

5. You can provide valuable feedback about what you wouuld want to see in a real estate social network from the ground floor up.

6. Don't you wish you had been at the ground floor with Facebook or Twiiter? Here is the next potential platform.

7. There are at least two good articles to download for free right now and a half a dozen proffesionals to meet. YOU could even lead a forum if you ask nicely!

7.5 Visit Clear Day Connect because I'm asking nicely!! You can do me that favor, right???

5.5 Reasons That Auguts 2009 is a Bad Time to Invest in Real Estate

2009-08-28T21:39:00.004-08:00

I have been avoiding this topic for a long time. After all, this is a blog that supports a company that provides bridge loans to real estate investors and it's in Clear Day Capital's best interest to make sure that people keep investing. But the truth of the matter is that this is a bad time to invest in real estate. Here are the facts:

1. Everyone is getting out of real estate, so you should too. That's right, in a democracy where every vote counts, the majority rules. So as realtors, loan officers, title officers, investors, and everyone else is dropping like flys, you should get out or stay out!

2. Real estate prices are down. You need to wait until prices are up a lot to make sure that you are following the upward trend. Even though property values are low and on sale, wait until prices go up quite a bit. Real estate isn't like stocks or cars or other things that you buy. Buying high is what most people do, so you should follow the majority (see reason #1.)

3. Real estate volume is down even further. Again, if no one is buying, why should you? Whait until volume goes up and it becomes more of a seller's market and then you can feel good about making offers near the asking price. Better yet, you'll be able to make lot's of low-ball offers that get rejected because people have more confidence that they'll be able to sell their house.

4. Unemployment is up. This means that everone has stopped buying houses and no one can afford to pay rent. After all, going from 3.0% unemployment to 5.7% unemployment (in Utah) means that everyone is out of work and no one has a paycheck coming in. We know that the government lies and unemployment MUST be so high that the American way of life has ceased to exist. I am not sure where people are living, but it must not be in houses or apartments. Has anyone checked on RV park occupancy rates lately?

5.5 Home foreclosures are ready for the "second wave." Home prices are going down even further. Forget about buying for cash flow long term, forget about negotiating a good deal now, forget about amortization, forget about owner financing that will allow you to own dozens of houses without qualifying at the bank. Just focus on equity and remember housing prices never bounce back.

5.5 Leave more for me & my friends! This is the best reason of all to stay out of the real estate market. We are having too much fun and I don't want competition for houses to go back up to were it was two years ago!

My suggestion is that you wait for the nightly news to tell you that it's a good time to invest in real estate. They allways seem to have their pulse on the market. Look at the great job of investigative reporting they did to warn us about the housing bubble.

There are lots of other other good reasons to not invest. Can you think of some and share them?

Long Term Real Estate Profits Through Property Management

2009-08-24T20:00:00.003-08:00

Someone once said, "If you don't manage properties well, then you are just a custodian for the properties until you sell them at rock-bottom prices to the next guy."

The goal of a good property management company is to maximize property profitability through maximizing revenue and keeping costs as low as possible. The company also gives property owners complete access to property and tenant information. This can be done through on-line software that is available 24/7.

Whether you pay someone to manage your property or do it yourself, if you are going to keep properties long-term, you need to understand what it takes to manage a property.

Tenants

Each property is an asset that needs to be maintained and improved on over the lifetime of the property. The cost of maintaining and improving the property can vary greatly, depending on the tenants.

Screening for great tenants can take time and energy, but experienced landlords say its worth it to avoid evictions and property damage. Some owners look at tenants as employees that safeguard, maintain, and utilize the property

Maximize Revenues

Revenue maximization is a function of keeping rents high and occupancy rates high. Occupancy rates are a function of keeping tenants, attracting new renters when properties become available and minimizing the amount of time between move-out and move-in.

Revenues also come from collecting late fees and enforcing lease contracts.

Minimize Costs

Costs are impacted by tenant turnover, repairs, ongoing property maintenance and tenant delinquencies and/or evictions. Turnover costs (the cost to get a house rent-ready) are significant, even when the tenants are clean and take care of the property.

Repairs paid by property owners can be kept down through good lease contracts and proper tenant screening. Ongoing property maintenance is unavoidable and strong relationships with service providers keeps costs down.

Obviously keeping delinquencies and evictions to a minimum and preventing these costs is best, controlling the costs when needed is critical.

Information Systems

When using a property manager, you should have access to all of the information that pertains to each property you own: property ownership documents, tenant lease information, revenue owed and collected, and costs. Reports can be scheduled to be sent automatically by e-mail. They can also be generated on an “as needed” basis.

If you are managing the properties yourself, the need is the same- you need to know if you are making or losing money on each property.

What about your properties? Any "tricks of the trade" that you can share?

Real Estate is for Patient People

2009-08-20T10:14:00.003-08:00

Peter Fortunato, a renown national real estate investor and trainer, teaches that investing is "a thinking man's game, not a running man's." As I thought of that statement it occurred to me that patience is needed as well. Here are some examples:

Looking for Diamonds

A real estate investor who specializes in fixing and flipping real estate is looking for a diamond in the rough, that is REAL diamond, not a fake. Robert Allen, the author of "Nothing Down", talks about how difficult it is to the untrained eye to find one diamond in a group of cubic zirconium. However, he can teach how to spot the diamond with one simple trick: Turn the stones upside down onto its face. Then the difference between the stones becomes obvious and the real diamond reveals itself.

In real estate there are a lot of properties that report themselves to be diamonds, but only you can make that determination. Does the property meet YOUR requirements to make a profit? You may need to go through dozens of offers before finding the diamond and deciding to execute the transaction.

Once you do purchase the property it typically takes 3-6 months to fix, resell, and get paid. How many people working for a paycheck a willing to wait 3 months to get paid?

The 30 Year Bamboo

Another way to invest is to buy and hold real estate. In that case, even more patience is needed. This is a lot like a species of bamboo that lives along the shore of the Bay of Bengal. It blossoms once every 30-35 years! Think about owning real estate by paying down a 30 year mortgage. You may have cash flow along the way, along with depreciation benefits to reduce your taxes. This is truly a get rich slowly scheme that requires time.

Why Proceed with Patience?

There are millions of people in the United States that are running away from investment real estate right now. They got involved at the top of the market and have lost a lot. Many were looking to get rich quick, did not examine the risks, look at downstream consequences, or did not educate themselves.

The most successful investors I work with have 1-3 transactions at a time and always finish what they start. There are a lot of details that need to be taken care of, a lot to learn, and a lot to do. The successful investors identify what they want and then patiently proceed to get it.

Be Prepared

Once you know that you have found what you are looking for, you need to respond quickly. There are a lot of people looking for the diamonds. Are you ready to:

Write offers the day a property goes on the market?
Close quickly- 1-2 weeks, better yet in 1-2 days
Have professional resources that can help you structure and fund a deal?
Deal with the property AFTER you acquire it? Fix up, rent it, sell it, etc.?

Work with a Partner

One recommendation that I always have, especially to beginning real estate investors, is to try working with a professional real estate investor who has experience doing what you are trying to do. This lowers your risk tremendously and you can learn how to work on your own by participating and gaining experience over time.

Are you a patient person? Have you always been? Can you think of someone who has rushed into real estate and been burned?

Book Review- "Blog Schmog"

2009-08-14T17:56:00.003-08:00

Check out this book review. How does it relate to real estate? A lot of people are using social networking and the internet to market their real estate business. This book will give great insite to what you can get out of a blog. CLICK HERE TO READ REVIEW

Utah Credit Union Equity Lines for Investment Real Estate

2009-08-13T10:34:00.003-08:00

Investment Real Estate Financing Alert!

Utah real estate investors have been searching for over a year for how to get fast, effective financing in place for their investment properties. I won't go into the obstacles in detail, but they have included:

Property seasoning of 1+ years
Unreasonabley high standard for credit scores and W-2 income
Bad appraisales
Unknowledgable loan officers
Very high interest rates
etc, etc, etc

There is now a great opportunity for the right properties and the right borrowers. Some Utah credit unions have developed a loan product with the following general guidelines:

Home equity line of credit
Up to 65% LTV of appraised value for investment properties
In-house appraiser who will talk with owner and understand the property
NO SEASONING- apply the day after you purchase the property
Interest rate at prime+1.5% (currently at 4.5%)
Property must be in live-in condition (no pre-rehab junkers)
Borrow must have W-2 income and 700+ credit score
Borrower must be a member of the credit union (generally $25 in a savings account)
Origination fee about 1%

Clear Day Capital had two borrowers use this program at Golden West Credit Untion, working with Nate Cox at 801.786.8452. The first purchased a rehab, did the fix-up and paid us back using his equity line from Golden West in about 5 weeks.

The second was completed in under 3 weeks, the property was already in live-in condition.

I understand that other Utah Credit unions offer similar programs. When I get confirmation of which ones I'll let you know. Can you confirm similar programs? Does anyone have any other good investment financing to share?

Life Insurance for Real Estate Investors

2009-08-06T17:21:00.003-08:00

Chris, a southernn California real estate investor and friend of mine, passed away in his sleep earlier this week. He was 44 years old and from outward appearances in good health. He leaves behind a wife and 3 grown children.

Chris invested in California and in northern Utah. I had interactions with him in both markets. He was creative, knowedgable, and enjoyed working with people. I will miss him.

Chris left behind a legacy of single and multi-family residential real estate investments. Most have reasonable cash flow and can stand on their own. Unfortunately, he did not have any life insurance to provide cash to his spouse to let her wait for a year or so and not have to make decisions of what to do with his real estate investments.

This is a personal opinion- if you have a family of any kind you owe it to them to cary life insurance, even if it is just enough to carry them for 6-12 months. A policy for $100,000 for a non-smoking male can be purchased for as little as $15-20 per month. If you need a recomendation for an agent to talk to, let me know and I'll put you in touch with people that I trust.

Don't take my word for it. Talk to your spouse and see what they think. Let me hear your opinion about this important topic.

Equity Loans from Banks- Work With the Current Banking System

2009-08-03T18:20:00.003-08:00

Clear Day Capital's client's have really struggled with traditional lending institutions over the last 18 months. Borrowers with great credit suddenly denied traditional financing simply because they do not have a W-2 income. They can document the income that they receive, but because it is not a W-2 wage, it is unacceptable for today's lending standards. Everyone is working hard to make adjustments.

One of Clear Day Capital's client's recently borrowed funds in mid-June, rehabbed a house for a couple of weeks, and paid us back in late July using funds from a credit union. About a 5 week turn-around on our loan and a payback a couple of weeks early!! This had not happened for over a year- a quick loan turn around using funds from a traditional financial institution.

Introducing: Equity Lines Based on Appraised Value
Here is how it worked (details might be a little off, but generally this is how he was able to make it happen.) Our client used a loan from Golden West Credit Union to pull out up to 65% of his appraised value. No property ownership seasoning, the application could go in the next day. The rate was prime + a low fixed percentage, but the rate will adjust over time based on prime. There is a (5 year?) balloon payment due. It took about 3 weeks to complete the loan.

We have heard of two other banks and credit unions doing this type of a loan- Zions and Weber Credit Union. They still will not lend you money to purchase an uninhabitable house, but that's where a lender like Clear Day Capital comes into the picture. Here's the scenario:

You find a property with a great LTV.
Borrow your purchase funds from Clear Day Capital.
If needed, borrow fix up funds from Clear Day Capital.
Do the rehab.
Get a loan based on appraised value and pay off Clear Day Capital.

Turn around time to go from expensive money to cheap money: 4-8 weeks.

Once you have cheap money, you can afford to hold in on the market for a higher price offer. You can rent it with great cash flow and wait for a better offer. Sell it on contract or with a lease option with a balloon payment or option time frame that coincides with your balloon payment. Imagine the possibilities again...

What's the next project that you can use a loan program like this for? Post a comment and share it with me!

Isn't it All Creative Real Estate?

2009-07-29T08:30:00.000-08:00

Two days ago a Twitter follower asked asked, "Have you done any creative real estate deals lately?" As far as I'm concerned, Clear Day Capital ONLY does creative deals, but I responded with a deal that we are working on that will close on today (July 29, 2009.)

A borrower is purchasing a property to rehab and is concerned about a personal guarantee. At the some time, the officers of Clear Day Capital have a goal to control our own destiny more in case a loan goes bad (refusal to repay or cooperate) or gets "stuck" (unable to sell or refinance, but cooperating and wanting to do the right thing.)

We have come up with this model:

1. A company controlled by Clear Day Capital's owners purchases the property through an assignment of the purchase contract and acts as a holding company.

2. The holding company sells an option to the client to purchase the property by a future date at a pre-determined price equal equal to the holding company's loan payoff amount.

3. Option extensions can be purchased if needed.

Fairly simple and provides these benefits:

To the Client: They don't personally guarantee the loan, but still get to complete their project.

To Clear Day Capital: We control the property and do not have to forclose if the clients don't perform.

Some interesting notes:

1. The solution was inspired by our client, who was making a general suggestion about how Clear Day Capital can secure itself better, not realizing that he would be the beneficiary of the suggestion.

2. The deal was dead two weeks ago, but we had done successful deals before, we wanted to do more together, and we made a mutual commitment to figure out how to do more. We just needed to get more creative.

What do you think? What was your last created real estate deal?

They Are ALL Creative Real Estate Deals

2009-07-29T08:03:00.001-08:00

Two days ago a Twitter follower asked me (@cleardaydavid), "Have you done any creative real estate deals lately?" As far as I'm concerned, Clear Day Capital ONLY does creative deals, but I responded with a deal that we are working on that will close on today (July 29, 2009.)

We have come up with this model:

1. A company controlled by Clear Day Capital's owners purchases the property through an assignment of the purchase contract and acts as a holding company.

2. The holding company sells an option to the client to purchase the property by a future date at a pre-determined price equal equal to the holding company's loan payoff amount.

3. Option extensions can be purchased if needed.

Fairly simple and provides these benefits:

To the Client: They don't personally guarantee the loan, but still get to complete their project.

To Clear Day Capital: We control the property and do not have to forclose if the clients don't perform.

Some interesting notes:

1. The solution was inspired by our client, who was making a general suggestion about how Clear Day Capital can secure itself better, not realizing that he would be the beneficiary of the suggestion.

What do you think? What was your last created real estate deal?

Warning: A Joint Venture Disguised as a Loan

2009-07-28T07:19:00.004-08:00

First I want to disclose that I am not an attorney and that you should consult an attorney when you form a business entity, sell shares, enter partnerships, etc. With that out of the way, I here are some observations about an opportunity I received to "borrow" money that turned out to be a joint venture with a business partner and that needed to be bought-out five years down the road.

The Offer

I received an e-mail about three weeks ago with the following offer to borrow money:

$300 application fee, refundable if loan did not go through
100% LTV using a CMA or BPO, no appraisal needed
3% interest-only, 5 year term
Letter documenting cash equal to 20% of loan is available in a financial institution
Loan to be paid back in 5 years, with an option to convert to a conventional 30-year loan at 5% interest
30 days to underwrite and fund

Sounds to good to be true, right? As usual, there was a lot more to this than initially presented.

The Reality

The reality is that the “loan” became a four page “Joint Venture Agreement.” The exit strategy to the “loan” was paying-off the joint venture partner or taking him on as a permanent partner with a 50/50 split.

I talked to two attorneys, one a real estate attorney the other a securities attorney. Both told me that a “Joint Venture” is a general partnership, which means that both parties become liable for actions of the other party.

When I questioned becoming a general partner with a “lender” the response was “This is not a general partnership, just look at paragraph 5.” Well, paragraph 5 says:

“Neither the Joint Venture nor any of the Parties shall have authority to create any obligation for one or more of the other Joint Venture partners.Neither the Joint Venture nor any of the Parties shall be responsible or liable for any indebtedness or obligation of the other Parties, individually or collectively, incurred either before or after the execution of this Agreement.

In other words, forget hundreds of years of statutory and common law, we are going to agree that we are not liable for each other. Sorry, but you cannot make your bad breath go away by simply stating that it doesn’t exist!

The Bottom Line

Is this a "scam?" I don't know if it is a way to take your money, your property, or both. It could be totally legitimate. What I do know is that it was very poorly executed and that it is a securities transaction regulated by the State of Utah and the SEC. As my lawyer, Kevin Timken has taught me, be very careful of business transactions involving entities and borrowing or lending money. They are very highly regulated and occur even when you are not aware of them.

I signed a confidentiality agreement so I won’t disclose who these people are.

Two lessons learned:

If it sounds too good to be true, it probably is. (Not a new lesson, but definitely reinforced.)
By very cautious with any money making scheme coming out of Provo orOrem, Utah.

Have you heard about a loan program like this? Do you know of any other incredible “business opportunities” circulating right now that others should stay away from?

5 More Questions to Ask Before Investing With a Hard Money Lender

2009-07-22T16:16:00.002-08:00

Last month I wrote about five questions that should be asked before investing with a hard money lender. (June 2009.) This month we look at five more questions with more depth. They should be asked after the first five questions are answered adequately.

1. What happens if a loan goes “bad?”

Most people think that business will always be smooth. Experience tells us that at some point a loan will go bad. When this happens, who is responsible for collecting interest, loan extension fees, or foreclose on the property owner? Is this your responsibility, or will the hard money lender take care of this?

What about the cost of collecting? Who pays for legal fees, registered mail, court filings, etc. if a loan goes into foreclosure? Will the lender who arranged the loan pay in full, in part, or not at all? Will the lender take the time and energy, and make the effort necessary, to go after the capital, interest, and penalties or do you need to do that yourself? Do they have a process in place, including a lawyer who can foreclose at a reasonable cost?

There is a huge difference between collecting a loan on your own and having a responsive, knowledgeable company do it for you.

2. Can I call references before I invest?

A reputable company takes pride in its professional reference list. For a hard money lender this list could include accountants, bankers, escrow agents, real estate agents, and lawyers.

If the lender does not have a list, ask "Why not?” The answer should be, “Because we haven’t put one together yet. Give us a day and you'll have it.” If not, then ask yourself if someone without professional references is someone you want to do business with.

When you have the list, call the references and ask more questions to make sure the lender is a professional & trustworthy organization.

3. How does a loan close and does the property have a proper lien?

Does the loan close with a title and escrow company (or with an attorney, depending on local laws?) Is title insurance purchased so if title problems occur the title company pays to have them fixed? Was a title search done and all other title issues identified and paid off, or resolved during the closing process?

Once the loan closes the lien needs to be recorded to ensure that the loan is in first position, ahead of any other liens to ensure that it is paid off first in the event of a foreclosure.

4. How does the hard money lender make money?

Is the hard money lender a broker, making money regardless of the quality of the loan and a successful outcome of you being paid back? Or does the hard money lender act as a principle in the transaction, making money with a successful outcome and potentially losing money if there is a problem with the loan. Does the lender give you a fixed of return regardless of the loan outcome?

How the hard money lender makes money will have a tremendous influence on the manner they conduct business: loan quality, borrower quality, risk, recovery systems in place, and who they borrow from. What is your risk vs. their risk in the loan?

5. Does the lender have a private placement that discloses your company’s financial statements and business plan, and what are the licensing requirements for the business?

It is possible that not all hard money lenders will be required by state or federal governments to have a private placement to raise or broker capital. However, if they have a private placement it should explain their business and disclose risks. It means that they take their business seriously enough to put together a plan and pay to register with the proper government regulatory agencies.

The licensing requirements discussion should disclose if they are even aware that requirements exist or not. If they don’t know, it means that they don’t take their business seriously enough to make inquiries. If they do know and they need to be licensed, they should be able to provide documentation to confirm their license.

Bonus Question

10.5 What is your reputation with your clients?

Their reputation should be good, with clients coming back for repeat business. They should offer clients as references, including clients whose loans did not go smoothly, and a workout had to be arranged. How was it worked out, is the relationship in tact, and would they do business with the hard money lender again?

A lender’s relationship with its clients says a lot about the lender.

Tell Me What You Think about investing your money with hard money lenders. I know that there are HORROR STORIES out there!! Sthare the best one you know.

Paying Mortgages to Pretender Lenders

2009-07-15T07:27:00.002-08:00

I just finished a three-day journey paying 22 mortgages for properties in which I have partial ownership. No big deal, right? It shouldn't be, but let me describe what happens when pretender-lenders get involved....

First of all, let me say that paying 15 of them worked just great. We use USBank, an almost-national bank with sound financials. They never got into the sub-prime mortgage business so they didn't need (nor want) a bail out. The have great on-line banking and I used the free bill-pay service to pay 15 of the mortgages as I do every month.

First delay to deal with- Homecomings Financial, a subsidiary of GMAC Mortgage, has sold its portfolio of loan serving to GMAC Mortgage and we now need to pay GMAC Mortgage. This means setting up 6 new bill pays at USBank. No fees for this, but it ads time to the process. We also need to change tracking on our spreadsheets for the mortgages, and I felt the need to call to verify what we need to do to make sure the payments are made before the 15-day grace period expired. (Note: We are late with the payments each month (after the first), but we have never had a 30-day late.)

So, I missed four mortgages out of the 22 and they needed to be paid today. The first was with Bank A. Their telephone touchpad system did not work well so I had to call in 5 times to just input the SS # and account number. Then they needed the bank routing and account number! So, I went to the operator who then repeated the request for my personal information. Not a big deal, but why can't they pick that up when the call is transfered by the computer?

Loan servicing company B (not a bank) was ok. The system worked and I was grateful.

The last two were with loan servicing company C and I needed to talk directly to a human being again. Again with the repeated SS # and account number. This time they needed the full address so they waited while I looked up the zip code on Google.

OK, this is a rant, but here is my point: Part of the problem that the country is facing right now is loans being sold to servicing companies. Most people cannot go back to where they originated the mortgage and talk to the loan officer or a bank officer to discuss their mortgage with a human being instead of an institution.

As for me, I am going start looking for human beings to work with- banks that keep their loan portfolio instead of selling them. Do you know any real banks? Let me know which ones so I can work with people again.

Pete Fortunato Real Estate Wisdom

2009-07-09T08:46:00.002-08:00

Peter Fortunato is a real estate legend. He teaches only five times a year. His passion is real estate and he never uses bank financing.

Go to the Real Resources for Real Estate Investors blog to read some pearls of wisdom.

10 Things New Real Estate Investors Must Know

2009-07-04T21:33:00.002-08:00

1. Don’t believe everything you read or hear. Most real estate investors do not earn $1,000,000 or even $100,000 in their first year. Good luck trying, but don’t give up if you don’t.

2. Make offers. You can’t invest in real estate if you don’t make offers.

3. Not all mentors are created equal. Most fee-based “mentors” have a little to no experience mentoring and may have very little real estate investing experience.

4. Join a real estate club. A local real estate club can provide you with an instant network of other investors, contractors, real estate agents, and anything else you need to invest.

5. Develop a strong local network. It can make your investments soar and save you from making big mistakes.

6. It’s OK to spend money on your first property. It will probably be a better investment than a mentor or expensive class.

7. Don’t quit your day job. It is much easier to invest if you have capital, a job, and good credit.

8. Partner with an experienced investor. It is much easier to make money on first investments if you do.

9. You must know how to “run the numbers.” If you don’t know which numbers, then don’t invest.

10. Start today. The sooner you start, the sooner you will really learn how to invest. Reading books doesn’t count as investing.

10.5 Find capital sources. As many as you can- long term loan brokers, hard money brokers, friends and relatives with self-directed IRA’s.

HVCC- Bad Appraisals Are Hurting Real Estate

2009-06-30T07:22:00.006-08:00

Did you know that appraisers are supposed to provide a service that accurately estimates the value of a piece of real property? Usually they are reasonable accurate, but the new HVCC system is creating a mess.

The Home Valuation Code of Conduct (HVCC) is creating a mess for all involved- lenders, appraisers, and most of all, home buyers. Why? Because it restricts the free flow of information by disallowing an appraiser any contact with anyone involved with originating the loan.

Here is a "bottom line" story: We have a client we just had an appraisal done. The appraiser was selected randomly, according to the new guidelines. An appraisal done less than a year ago put the property at $110,000. We agreed with the appraisal, as did two separate Realtors that Clear Day Capital works with in the Ogden area.

The appraisal came back at $68,000!!! Why? Because he compared an occupied house with renters paying $950.00/mo for the last 8 month to uninhabitable, bank-owned properties!! He made prejudicial statements about what he felt the values should be in Ogden and indicated that a $17,000 rehab done a year ago was simply "deferred maintenance" and did not add value to the property!!! It appeared that he was looking for the LOWEST POSSIBLE VALUE! Not accurate value, lowest possible.

Was he afraid to "speak his mind?" We don't know, but it has been reviewed by an experienced loan officer, a Realtor who is an Ogden expert, and by Clear Day Capital. We ALL agreed: BAD appraisal.

Now that the lender has the appraisal (which cost $450 and took 3 weeks to complete), it is impossible for that lender to go out and get a new one! Our borrower needs to start from scratch with a different lender and hope that the new one is reasonably accurate. The minimum cost:

- 2 appraisals at $450 each = $900
- 1 month loan extension = $2,000
Total = $2,900

That doesn't include opportunity cost, time spent, and aggravation!

Here is a link to a website about what is happening today with HVCC: http://bit.ly/jZaIO

The HVCC system has got to go, for the good of homeowners, investors, and the residential real estate industry.

Utah Real Estate- Don't Wait!

2009-06-29T07:58:00.004-08:00

My biggest complaint about the real estate market in Utah is that the general public is listening to the news instead of doing research for themselves. This is leading to waiting for...what?

Interest rates to do down? They did and they are going back up.

Prices to drop? They did (a little) and they are now flat.

Waiting for a short-sale/foreclosure/bank owned property? They are much fewer and far between than you would think.

Take a look at this posting to get even more insight.

Utah Dave- Why People are losing today!

10 Questions to Ask Before Investing with a Hard Money Lender

2009-06-23T09:28:00.005-08:00

There are at least ten questions that you should consider before investing with a hard money lender. Any investment should be made carefully. Passive real estate investments can become a non-passive investment, depending on how you invest. We'll answer five questions this month and five advanced questions next month.

1. “Are you going to broker or borrow my money?”
When your money is brokered on a loan, you invest in a single property. The loan broker is paid a percentage of the deal by the borrower, and then you have the responsibility for the loan and a direct relationship with the borrow.

In most cases if the loan goes bad, you will have to pressure the borrower, go through the foreclosure process with an attorney, and liquidate the property. Even if the loan broker is willing and able to help, your money is tied up in that single property and you have the ultimate responsibility for collecting. You will not earn any interest while you are recovering your capital.

When you loan your money to a reputable company, they will pool it with other investors. If a single loan goes bad, they will recover the pooled capital while you continue to receive interest for your investment. Since they have a portfolio, your money is spread throughout the portfolio and good loans will continue to be made. In this case you will continue to receive interest regardless of the performance of an individual loan.

2. “What types of properties to you lend on?”
Why is this important? It will help you understand the level of risk, the relative liquidity of the investment, the size of the market, and how much real equity is in a property and how that equity is determined. Types include: Single family homes, raw ground, commercial properties, multi-family residential, etc.

There is not enough space to explain all of the implications in investing in each type of property, but here are follow-up questions:
A. Is there “fundamental” demand for this type of real estate i.e. a mansion vs. a 3 BR / 2 BA house in a blue collar neighborhood?
B. What income will the property produce if it needs to be rented? Raw land may not produce any, other properties will depend on location, demand, proper management, etc.

3. “How well do you know the market(s) that you lend in?”
If a hard money lender is an expert in a specific area they will understand property values better, have contacts in the area to help them evaluate an opportunity, know the “rules of the road” (local laws covering everything from foreclosure to building ordinances), and know the trends in the local market.

Do you want to lend money in Chicago when you live in California? What about Knob Lick, Kentucky? Distance creates time and expense for any type of recovery process.

4. “Do you have the proper licensing for the types of loans that you do?”
Commercial loans have no licensing requirements in many states. Residential loans that place a lien against a residential real estate (single family home, condo, townhome up to a four-plex) are considered mortgages. Mortgage lenders in most states require a mortgage broker’s license for their company and a personal license for the employees who originate mortgages. Federal licensing goes into effect in late 2009.

Many hard money lenders casually state, “It’s just a hard money loan, it’s not a mortgage so I don’t need a license.” Wrong. Why does this matter to you, if you invest with an unlicensed hard money lender? Simple answer: Your money is connected to an individual or company that is wide open to lawsuit from the borrowers, and to investigation and prosecution by the state Division of Real Estate. How will a company that shows a disregard for the law ,regard you and your investment?

5. “What position do you lend in?"
The first position lien holder gets paid first, then the second, third, etc. If everything goes well, it doesn’t matter and everyone gets paid. If there is a problem with the loan and the first position lien holder takes it to foreclosure, the first position lien holder gets paid their capital, legal fees, interest, penalties and everything that is owed them before other lien holders receive any money.

Unless there is a tremendous amount of equity, this often means that only the first position lien holder gets paid. So, do you want your money lent in second position?

Coming Soon: 5 Advanced Questions

"The Ten Commandments for Business Failure" by Donald R Keogh

2009-06-18T18:47:00.003-08:00

Take a look at this posting to review a very good book: http://tiny.cc/pdn94

Keep Your Tenants, Keep Your Profits!

2009-06-16T06:00:00.004-08:00

Finding great people to live in your house or apartments is critical for on-time payments, someone who takes care of your asset instead of destroying it, and having peace of mind as a landlord. So how do you keep these people, year after year after year? We know of one property manager whose average tenant stays 4.5 years!

Wow! How Much Can You Save?

Can you imagine the cost savings? If your average tenant stays 1.5 years, let’s look at the turnover cost over 4.5 years on a unit that rents for $1,000 per month.

Lost Rent 1 Month @ $1,000 Rent-ready costs (not covered by deposit) 250 Advertising, signage, etc. 50 Total Cost every 1.5 years $1,500 x 3 Total Cost Over 4.5 years $4,500

If you can get your turnover rate from 1.5 years to 4.5 years, you save $3,000 or $1,000 every year! If your cash flow is $200 per month, you just saved almost half of your cash! So, how do you keep these great tenants that you found and put into your properties? Let’s look at a few simple ideas.

Basic Tenant Retention Strategies

Treat Your Tenants Like Clients. They are your customers and should be treated as such. Your goal should be that your tenant feels good about your property and their relationship with you as a landlord. Good customer service includes:

Polite communications. Even for late fees, 3 day pay or vacates, etc. Most tenants will pay what they owe, so communicate politely and professionally.
Accurate billing and statements. A confused tenant will not feel good about paying anything. Would you?
Rewards for Good Behaviors- Provide a discount for on-time payments instead of a late fee for late payments, give a rent rebate for referrals to other properties you own, and provide positive feedback on good property inspections. Why dwell on the 2-3 things that may need to be improved when there are 50 things that are well maintained and in great condition?
Reduced Rent Increases- The next time contract renewals come around, bring the tenant’s on-time payment record with you. Talk to them about the “regular” rent increase rate and then reduce it based on their on-time record. Even consider NOT raising rents. Remember, it costs about 1.5x monthly rent if someone moves out! Is a 5% rent increase always worth the risk of a good tenant moving out?

Advanced Tenant Retention Strategies

Thank you gifts. Say “thank you” with a gift at the holidays or a birthday (you have their birthday from your application, right?) for your best tenants. Let them know that you appreciate them and they are one of your best tenants.
Tenant Rewards. Sign up for a tenant rewards service like blackledger.com to reward your tenants. The cost to you is minimal and your tenants win big.

“That’s it! I’ve had it! Let’s sell this place!”

It takes time, people skills, market knowledge and patience to be a good landlord. Sometimes it makes sense to own real estate, but you don’t want the hassle of being a landlord.

If that sounds like you, don’t call your real estate agent. Contact Clear Day Property Management instead. With a 94% occupancy rate for single family homes and an average turnover rate of 2.5 years (and climbing), they can take all of the hassle out of managing your property. Call them at 801.725.9044 and ask them how they can take the weight of property management off of your shoulders and put it onto theirs.

Are YOU an Investor or a Speculator?

2009-06-09T07:10:00.004-08:00

Are you a real estate investor or a real estate speculator? What's the difference?!!?!How about a clear cut strategy, a set of goals, and a business plan on how to reach those goals?

When is a Strategy not a Strategy?

All too often when asked the question, “What’s your strategy with this property?” an investor will start talking about:

Repairs Paint FlooringUpdating

Landscaping HVACBathrooms Kitchens

These are short term tactics, not a strategy! These are the things that you need to do toget ready to execute your strategy! Here are some popular strategies:

Fix-up and sell

Long term financing and rent

Lease option

Long term financing with credit partner

Pull out equity, create a cash reserve to cover negative cash flow, and then sell after one year to pay long-term capital gains tax

Fix-up, move in for two years or more, and sell within five years to qualify for primary residence tax exemptions

Who Cares About "Tactics" vs. "Strategies?"

You should! All too often real estate "investors" are really "speculators," without a real game plan. A basic plan should be in writing and include some basics:

Financial goals- long term, short term, annual, etc.

Primary Investment Strategy

See the list above for a start

Backup plan if the primary strategy for a property is unsuccessful

Ideal Property Profile

Price range, including target discount below market

Location, location, location

Condition (new, touch-up, fix-up, major rehab, etc.)

Key team members

Title officer, appraiser, and inspector

Real estate agent(s) & other property sources

Long-term loan broker & short term loan sources

Accountant, lawyer, and book keeper

Contractors of all types

The Acid Test

How do you know that you have a business and are not just speculating? Well, can you sayyour business plan in 30 seconds or less if someone asks? For example,

"I invest in multi-family, residential housing in Webercounty for both cash flowand long-term capital gains.

I buy them in good condition for 90% or less of market value and then do everything I can to keep them occupiedand expenses down.

My goal is to have one new property every six monthsand I only sell properties if my business needs a cash infusion."

There is a BIG difference between Investors and Speculators. The biggest is that speculators loose money when the market changes, investors thrive!

OPM To the Next Level- Other People's Money is Just the Start!

2009-06-05T07:19:00.004-08:00

Everyone knows about OPM- Other People's Money. If you are a professional real estate investor, you need to know about the other OPM- Other People's Minds!

Whether you are a brand new investor or a seasoned veteran about to retire, akey to success is knowing other people who can help you find, structure, finance, close, hold, and exit properties over and over again. Where can you go to find advice? Of course, there are the usual suspects:

Real Estate Brokers
Loan Officers (Traditional)
Loan Officers (Short-term)
Contractors of all types
Title Officers
Property Managers
Real Estate Lawyers
Financial Consultants

These are all good sources, especially if you are their client! The challenge is that their experience may be limited in scope to their area of expertise. Ideally, all of these people that you work with will be real estate investors themselves.

Give a Little, Get a Lot

Local real estate investment clubs are a great source of free or inexpensive advice. Where else can you go to find dozens, maybe even hundreds, of other real estate investors who have understand the complete picture?!! Real estate investors are generally generous individuals and are willing to share with anyone who asks for help.

What do they expect in return? Reciprocation. Expect to give back through advice in your area of expertise, a lead on a good property that doesn’t fit your business model, or maybe just paying for lunch when you meet!

Here is the contact for a club thatt Clear Day Capital attends and supports:

Shawn Watkins (801) 678-1901 investorsworkshops@comcast.net

Of course, real estate clubs can be found all over the country. Find a state-by-state listing of clubs at http://www.reiclub.com/real-estate-clubs.php

OPM²

So what is OPM²? Using other people money and minds! The two together are a powerful combination. Make sure that you are connecting with experienced real estate investors. Your business will grow, and so will theirs!

Reminders About Other People's Minds

Send an e-mail to Clear Day Capital. We are all experienced investors and we would love to help you work out a deal or introduce you to someone who knows how to make things happen!
Stay in touch! We suggest e-mail and we use iContact. It’s fast, it’s easy, it’s inexpensive. Want a free trial? Click here: Free 30-day iContact Trial

FHA & IRS Cooperate to Allow Tax Credit Bridge Loans

2009-06-02T14:34:00.007-08:00

Up to now consumers have had to wait to receive their (up to) $8,000 tax credit. They were not able to use it at closing to buy down the loan and lower monthly payments. Up until last Friday, they were also not allowed to use a bridge loan to buy down the loan. (They are not allowed to apply the tax credit to their 3.5% down payment.)

What happened Friday? New guidelines from the FHA on how to Use First-Time Homebuyer Tax Cuts at closing.

Interested? Go to http://tiny.cc/1NVoM and read letter directly from the FHA website.

Bottom line: First time home buyers who work with FHA approved lenders can get a bridge loan so they can apply their tax credit to reducing the loan.

Expectation: First time home buyers will be able to pay more for properties.

Thanks to Shawn Watkins at Investors Workshops for the heads up.

http://investorsworkshops.blogspot.com/

http://www.investorsworkshops.com/

Passive Income- The Investor's Dream Part 2

2009-06-02T09:00:00.000-08:00

Maximize Revenue, Not Just Rent

Last month’s newsletter was all about how to get the highest possible monthly rent But there is more to maximizing income from rental units than the monthly rent. This month we’ll look at late fees and “no deposit” leases for additional revenue and how to minimize vacancies to keep the checks coming in every month.

Late Fees
Late fees can be a very important increase to your revenue every month. Here are some ways to make sure late fees are charged and collected:
-Spell-out late fees in your lease, including when:
-Rent Past Due “Rent received after 5pm on the 1st day of the month is past due.”
-Late Fees Charged- “Late fees will be charged if rent is not received by 5 p.m. on the 3rd day of the month.”
-Clearly identify late fees. For example: “Tenants will be charged a $50 late fee for rents received after…”

- Collect late fees first, then the rent
- When a tenant pays, credit late fees first
- If late fee is not paid, then the balance of the rent is still due. Since rent is still due, you can take legal action to start the eviction process

Communicate
-If a partial rent payment is made, rent is still due and late fees will be charged
-Once the rent is past due, send an invoice for the late fees
-The good news about late fees: They can be an important source of income. Some landlords feel that their best tenants are the ones that pay late every month, but always pay with their late fees. The late fees can add up to another month’s rent each year.

“No Deposit” Leases
“No Deposit” leases can generate incremental income. How? Offer two choices: lower rent with a deposit or higher rent. The higher rent should give you enough incremental income so that in about six months you have more income than the amount you would have received for the deposit.

A lot of well qualified tenants can pay the extra rent each month but have a really hard time coming up with a deposit and will go for the more profitable option. Here are some examples:

-$675 monthly rent with a $340 deposit or $735 rent and no deposit
-$1,200 monthly rent with a $600 deposit or $1,295 rent and no deposit
-$325 bi-weekly rent with a $325 deposit or $360 bi-weekly rent and no deposit

In each example you would collect twice as much extra rent as you would have as a deposit within 1 year. And guess what? You don’t have to give back the monthly rent when the tenant moves out. There will be no debates on how much of the deposit should be refunded and if repairs are needed you have a lot more money to make them with.

Some of you will say, “What, NO DEPOSIT? What if the tenant trashes the place?!!?” Think about this:

- Tenants who trash a property usually do a lot more damage than a half month’s rent. How far does $400 - $600 go to re-carpet and re-paint even a small unit?
- Even good tenants often say “Here’s my notice. Use my deposit for the last month’s rent.” Of course they have a legal obligation to pay the last month’s rent, but what is the cost of dragging them to court to collect?

Minimizing Vacancies
Of all the topics on how to maximize revenue, this may be the most important. Why? Because if you try to get an extra $50 rent on a unit, but it creates an additional one (1) month vacancy, you just wiped out a year’s extra income on a $600/month rental. Do the math:
Extra $50 Rent x 12 months = $600 per year
1 Month Less Rent = $600

How do you keep your units full and then re-fill them quickly when someone moves out? Volumes have been written about how to minimize vacancies, here are a few key ideas:

Keep Your Tenants: Turnover will kill you.
Pre-rent the Unit: Start advertising immediately when you receive notice. Not ready to show? Get a list of people to call when it is ready.
Develop a Waiting List: Always advertise your units. When you don't have a unit, keep track of who they are and what they want. Call them when you have what you want.
Pay For Referrals: As soon as you know of an upcoming vacancy send out an e-mail blast to let friends, family, and especially current tenants to let them know about your unit. Offer them cash to find your next tenant!
Fast Rent Ready: Goal: New tenant move in the day after your old tenant leaves. The current tenant leaves the property rent-ready. That won’t always happen so you need an action plan for clean-up and fix-up. Even major fix ups, such as junk removal, new paint, and new carpet can be done in a week if planned properly.

Give Your Real Estate Investing a Boost in 2009

2009-06-02T07:03:00.003-08:00

Want to give your real estate investing a boost in 2009? Thinking that the best way to make it happen is learning a new investment technique or getting better pricing out of Home Depot? Well, that may help but here is another idea: Find like-minded people who share common goals that you can help, and in turn are likely to help you! In other words, Network!

Take an inventory of who you know and who else you still need to meet!

Property Sources- so you can find more properties in less time
- Realtors who specialize in working with investors
- Banks that have REO
- Investors who wholesale properties
- Internet web sites that list investment RE

Financing Sources: so you have the right financing when you need it
- Friends and relatives with capital to lend- long term or short term
- A long-term mortgage broker that specializes in working with real estate investors
- A bridge-loan broker to provide funds fast for quick turn-around opportunities
- Commercial loan specialists for your larger projects- one for short term loans and one for long term loans

Property Improvement and Analysis Help: So you can turn a property as quickly as possible
- Roofers, framers, drywall, electricians, plumbers, etc.
- Landscapers, sprinkler specialists, and concrete people
- Appraisers and selling agents

How do you meet people? This is step one on the way to building a network. Here are some suggested sources for building a network:

Send an e-mail to Clear Day Capital. Tell us who you are trying to meet and we’d be glad to introduce you
Join the Utah Apartment Association and attend their meetings and ask other members about their network (click the above link to learn more)
Real Estate Investment Clubs. The are many around and you can meet people at all of them.

How do you stay in touch? This can be the hard part! Why? Because you’ll build a list of hundreds of people! How do you keep in touch with them? Here are some suggestions:

E-mail: We use iContact. It’s fast, it’s easy, it’s inexpensive. Want a free trial? Click here: Free 30-day iContact Trial
Invest in your education. Click hear and buy a copy of Jeffery Gitomer’s Little Black Book of Connections for lots of great ideas of how to make and keep networks.

Networking… help and be helped. The key to successful networking is to first ask what you can do for the other person. Sometimes the answer is obvious. For example, you can buy a house from a real estate agent who specializes in working with investors. In other cases, it may have nothing to do with real estate! For example, you give an investor an lead on a reliable auto mechanic and that is your connection.

Sometimes there is no good connection… that’s OK! Move on to the next person that needs help and can help you!

Can Clear Day Capital help you make a connection? E-mail us at info@cleardaycap.com and let us know who you want to meet. We’ll do everything that we can to create the opportunity for you!

P.S. Want to learn a lot about real estate? Contact Shawn Watkins at investorsworkshops@comcast.net to join him at his round-table discussion real estate club!

Northern Utah Real Estate Update

2009-05-25T10:19:00.002-08:00

Prices Holding to Slightly Down,

Volume Falling

The Salt Lake Board of Realtors announced on April 28, 2009 the median home price in Salt Lake County sold through the Multiple Listing Service (MLS) fell by less than 1% when compared to Q1 2008. The median home price during Q1 2009 was $240,000 compared to $242,000 during Q1 2008. Volume was down by 24% compared to the same period in 2008.

The statics for Weber County, where Clear Day Capital does most of its lending, show a slightly upward trend in prices. The median home price, for homes sold through the MLS, in Weber County during Q1 2009 was $165,000, up from $164,000 during Q1 2008. Volume was down 28%.

Why are prices relatively stable when volume is down? Some possibilities:

Seller Financing Transactions Are Up- These sales are often not recorded on the MLS
People Don't Need To Move- Many moves in Utah are local moves to upgrade, update, or be nearer family. People are waiting instead of dropping price.
People Are Renting Their Homes- Instead of panic selling, they are renting their residence.

Utah a Strong State

While the nation is heading towards double digit unemployment, Utah remains under 5% and business are still investing in Utah.

Utah Ranked America's "Best State to Live"- Forbes Magazine ranked Utah #1 in it's March issue. "Residents reported a high level of satisfaction in several areas, including work environment, emotional health, and their local communities."
Investments from Federal and State stimulus packages will create up to 60,000 jobs for Utahns, according to the Salt Lake Chamber.

FHA Seasoning Rules- Another Option?

2009-05-20T06:35:00.004-08:00

Most of Clear Day Capital's borrowers deal with the FHA's "90-day" rule. A property needs to be titled for 90 days before it can qualify for FHA financing. The challenge is a good rehab professional can fix the house in 2-4 weeks, have it under contract in another 2 weeks and then sit for 45-60 days with the property under contract while the clock ticks.

New York attorney Kathleen Scanlon has analyzed the FHA rules and indicates that if a property is transferred into a trust the property never sold, it simpley changes the identity of the owner. To read the full article in her blog, go to http://realestatelaw.typepad.com/where_is_blackacre_anyway/2009/04/seasoning-.html

Could a Real Estate Trust be used as a vehicle to control property and then sell it inside the 90 time limit? I'll be working with Ronn Dunn (dunnron@aol.com) to confirm if this can be done, and if so, exactly how.

Passive Income- The Investor's Dream

2009-05-19T06:03:00.004-08:00

Passive income- that’s the name of the game for most real estate investors. Revenue exceeds expenses. Let’s look at revenue:

Maximize Rental Property Revenue
Maximizing revenue from rental properties is a function of monthly rental rate, vacancy rates, the impact of incentives for the tenant to perform and ancillary fees charged to tenants. The formula for a year’s revenue may look like this:

12 x Monthly Rent
+ Late Fees Collected
- Rent Discounts for Good Performance
- Lost Income from Vacancies
= Annual Rental Revenue

It’s easy to say, “I can maximize revenue by increasing rent every 12 months, hitting hard on late fees and being stingy on incentive discounts.” In real life, maximizing revenues is an art, not a science. Why? Your tenants are clients who buy a service-your rental unit.

Tenants will only be willing to pay so much until they go down the street and buy your competitor’s product, and then the “lost income from vacancies” goes way up.

Let’s look at the “rent maximization” components and see how we can optimize each:

Monthly Rent Maximization
The challenge here is to push your rent, without going over the top. The key is to know your competition and what they charge. How do you find your competition? Call them or just read what they publish on-line. The information can be found at:

www.craigslist.com
www.ksl.com
www.rentometer.com

An alternative is to list your properties at a certain rent level, even when it is occupied, and see if the phone rings. If you are flooded with calls from qualified renters your rent is too low. No phone calls? The listed rent is too high.

Raising the Rent
Some property owners are timid about raising rents. To overcome this, remember:
When costs go up, rent goes up when possible.

Do your homework. Think of the confidence you will have talking to your current tenant when you know you can make the phone ring.

Make it a reasonable rent increase, especially if they are good tenants. What is reasonable? 3-5% of rents or 5-10% in a strong market with low vacancy rates. Consider this: in order for your tenant to move out they will need to:

come up with a month’s deposit for their new property
take the time, effort, and money to find a new rental
physically move- painful and expensive physically, emotionally, and often financially.

Bottom line: if the pain of the rent increase is less than moving, they will stay.

Sometimes you should make it an unreasonable rent increase! One property owner we know took over a rental and doubled the rent, from $400 to $800 (market rate). The unit was way under rented and she assumed that she would end up with a vacancy, as she usually did. Guess what? The tenant stayed, paying the additional rent month after month.

Next Blog: Penalties, Incentives, and Vacancies

Keep Learning with Peter Fortunato

2009-05-16T11:29:00.004-08:00

When we talked to real estate investors, they usually fall into one of two classes:

1. They've read everything put have never gone to a good class
2. They've good to really expensive, general classes but have never been to a class where a master investor teaches.

Here is an invitation: attend a Creative Real Estate Workshop & Role Play by Peter Fortunato (www.peterfortunato.com) on July 7, 2009 at the Davis County Convention Center. He is a nationally know speaker and for $199 you get 8 hours of training, a workbook, lunch, and networking.

This is limited to 50 people!! About 1/2 the seats are already sold. For more information call Angel Bronsgeest at 714.679.3627.