WPREIA Newsletter - December 2012

Transcription

1 WPREIA Newsletter - December 2012 Our next meeting is scheduled for Tuesday, December 18 th DoubleTree Hotel in Greentree Agenda: 6:30-7:00 Early Bird Class with Brain Snyder. If you haven t made it to see Brian, then you are missing out on some really important content. 7:00-8:00 General Announcements, Legal Minutes (Arthur Smith and Rob Xides), Accounting Minute (Marty Schwartz), Insurance Minute (Rebecca Wanovich), and Properties for Sale 8:00-9:00 Rob Manges, manager at First National Bank, speaking about loan options; Special gift giveaway CashFlow Game Night - Tambellini s Restaurant downtown will be hosting monthly CashFlow Game Nights in their upper room. The first game night will be Thursday, January 10 th at 6:30 PM. If you are not familiar with the game CashFlow, it s an educational game developed by Robert Kiyosaki that teaches how to escape from the Rat Race: Throughout his life, Robert's rich dad taught him many valuable, financial lessons. Sometimes Robert listened. Sometimes he had to learn the hard way. But by applying these lessons, Robert became financially-free and retired. However, Robert wasn't content with retirement. Fueled by the passion to share his financial wisdom with others, Robert created his board game CASHFLOW, based on his belief that people learn best through simulation. In 1997, he wrote Rich Dad Poor Dad and the rest was history. The book is the best-selling, personal finance book of all time, and it gave Robert the opportunity to teach valuable, financial lessons to a worldwide audience. Special Offers for WPREIA members - I am always on the lookout for special offers for the club. I have a new one for you from the people who created Yellow Letters. For those of you who are not familiar with Yellow letters, they are the best direct mail marketing that I know of. I have personally gotten a 30% response rate from a mailing with them. To get a 5% discount on your Yellow Letter order at use Promo Code: pbreia5 I also have a Ron LeGrand offer to re-introduce to you. Because Ron LeGrand is a friend of mine, he is extending a fantastic offer to members of this WPREIA. He is giving his wholesaling course, plus a few extra goodies for a single $1.

2 $1 offer From RON LEGRAND: 6 CDs Ron s Brand New Wholesaling Course 3 Bonus CDs You'll Like 30 Minute Consultation Build your plan Trial of Ron s New Gold Club Membership (Wait 'til you see what's in this) Ron s Weekly Online Millionaire Maker Reports All together, that's $821 in real value for $1.00 To claim you $1 offer simply copy and paste the link below NOW!!! Go to -- and claim your course before Ron retracts this offer. Forum - The Forum is a tool to help members, and it is becoming more powerful every day. Since the last meeting we have activated the homes for sale and property management sections. Accounting will be up any day. I am really excited to see that several of you are actively using the forum, and that many more are reading along. Remember the forum is there as a tool for you, to learn from each other. If you have a question, post it. Somebody is bound to know the answer. Business not what you had hoped, ask a question. Tenant problem, ask a question. Lease problem, ask a question. Not one of us knows all the answers, but together we surely know a lot. January meeting Chris Johnson will be coming to Pittsburgh to speak about Grants. Who is Chris Johnson: Chris Johnson is known as one of North America s top speakers, teaching people how to find and obtain all the funds they need to buy real estate, start or expand a business or get a college or university education. His knowledge and expertise allowed him to recently share the stage with Donald Trump, Tony Robbins, Rudi Giuliani, Suzie Orman and Robert Kiyosaki with over 30,000 people in attendance. Billions of dollars are available from Federal, State and Local governments. Governments at all levels have thousands of programs designed to do one thing to handout millions of dollars to people each and every year. If you re a business owner or entrepreneur there is free money available to start a business, expand a business, hire new employees, buy new equipment, buy new vehicles, develop new products, fund new research, plus countless other opportunities. There are grants, subsidies, zero interest loans, low interest loans and even loans you don t have to ever pay back.

3 Level 1, Level 2 and level 3 Contractors and the Specialty Contractor Taking on a renovation can be an enjoyable but yet challenging task. You need to know how you what has to get done first. Do you have time and skills to do some of the work? That is probably the most important question to answer. Yes there is some money savings here but the cost is really in time. So what is more important to you, time spent or money spent? This is where hiring the contractor comes in. What dictates on who does the work you or the contractor is the budget. What is all of this going to cost in time and cash? (does anybody budget for time). Plan your project out on paper called the Scope of Work it will really show what s going on before you even get started. Make notes on everything, this will tell you what every room needs and how you want it done. The plan now comes together at this point, so what do you do? Ah the budget! Once the decision is made of what work you will do yourself, and of course the hundreds of dollars you will save, it s time to farm out the rest. Contractors come in all flavors and sizes. LEVEL 1 CONTRACTOR: This is the fellow that knows how to do things This is probably the most inexpensive but will need a ton of looking after. You will get a good price and hopefully a good job. Accepts cash and sometimes in advance by request. Usually works when he needs money. Not insured. Will never step up into level 2. LEVEL 2 CONTRACTOR: The handyman. A good handyman is worth his weight in gold. This is the guy that has to know how to do everthing, has every tool in the book, and knows every trick in the book. If you find a good one, keep him! They will prove valuable for all small and odd jobs. Typically he has same talent as any contractor but doesn t want all or responsibility of the big job. Usually responds quickly also. LEVEL 3 CONTRACTOR: 2 types here: Number 1, Mr. Versatile. Rides by himself because he knows he can do a good job on his own. Typically very busy, hard to get a hold of, his office and secretary are his front seat in truck. Takes pride in everything he does, because it s his name and his name only. He ll take on larger jobs that the handyman can t, or won t, but doesn t want jobs that take weeks. Usually one job at a time. Number 2, The company contractor. Has a crew, takes on multiple jobs, works out budgets, figures time frames, etc. These guys come in different flavors also, remolding contractor and the new construction, additions contractor. A remolding contractor doesn t want to build an addition and you shouldn t either, it s not that they can t do it but they re not set up for it. A new construction contractor will charge you to outer limits for say a bathroom. So be careful who choose here. All level 3 s should have a bucket load of subs they can call on for specialty work. It is very important that the plumbing, electric, is done by those specialty contractors, because that s all they do, and they know the right way.

4 Specialty Contractor: These guys really do what they say they do. Joe s electric or Don s Plumbing. When you see a truck going down the road and it says ABC Plumbing and Remodeling Well are you a plumber that remodels or a remodeler that plumbs? Stick to those contractors that only specialize in what they do. Jim Culley, WPREIA member JSC Properties LLC Renovations Contractor Next Month, Being your own Contractor Manager Financing Guidelines This came up in my business this week so I thought I would pass it along. I do a lot of owner financing deals where I assign terms to the buyer. Occasionally I will get involved in one where I have a large equity spread and I want to cash out 100%. This means dealing with banks and mortgage brokers to try and get my buyer qualified. This particular buyer was a bit odd. He had a credit score over 700, but had a given up a house to a short sale a little over 3 years ago. So I did a little poking around and found a chart that indicates the various types of financing and how long various adverse credit actions can affect a buyer. Conventional mortgage Chapter 7 4 yrs Chapter 13 4 yrs Foreclosure 7 yrs Mort Late 1 yr FHA Chapter 7 2 yrs Chapter 13 2 yrs Foreclosure 3 yrs Mort Late 1 yr VA Chapter 7 2 yrs Chapter 13 1 yr Foreclosure see guidelines Mort Late 1 yr

5 What is split funding Split funding is another way to buy a property without having to go to a bank to get a mortgage. We all know that putting your own credit at risk by signing your name on a mortgage is the most dangerous way to buy a property. In a perfect world, you never want to risk any of your money to buy a property. You either want to use other people s money, or use the power of a legal contract to control a property that you aren t ever going to close on. Split funding is a hybrid technique. As the name implies, you split the funding on your offer, generally a down payment with an assumption of payments or some form of owner financing as the second component. Example a seller needs $2000 to rent a moving truck, so that they can move to Nevada for their new job. They have no money, and they are desperate for debt relief. They need out of their mortgage bad, but they can t take a simple subject too deal, where you step in and take over their payments. So you make a simple offer of $2000 down plus you take over their payments. There are two instances where you will want to split fund a deal, the first being where you are buying to hold, and you can get positive cash flow above your out-going payment. The second case, is where there is a big spread between what you can buy the house for and what you can sell it for. This second case assumes that you have taken carrying costs into consideration and that they will not bury you before you can flip this deal to another buyer. Investing in your education A wise man once said that if you think education is expensive, you should try ignorance! I am a firm believer in education within our field. There is a fortune to be made in real estate investing. No other investment class has produced as many millionaires as real estate, but you have to know what you are doing. I have personally spent upwards of $100,000 for my personal education, and I intend to spend more in the future. In my mind, if I spend $2000 to learn a new technique, that later makes me $5000, then I made a good deal for myself. Plus I get to keep the knowledge, and I can use that technique as often as it is applicable. One of the great things about real estate is that they are a lot of ways to make money. My goal is to seek out the best teachers who have something of value to teach us. Not the guys who are good at flapping their lips, but the guys and gals who are making millions doing what they teach. I know a good portion of you will be attending various boot camp type events in the coming year, and I commend you for taking that step towards financial freedom. I recommend that when you make a chunk of money from your efforts, that you stash a bit away for future education. The market is always changing and those who do not keep up with the techniques that are working now, will be left behind. In the coming year, we already have several fantastic teachers who are scheduled to come in and talk to us.

6 2013 Guru announcements - I wasn t joking when I said I will find people to teach us everything that anyone wants to learn. So if you have a subject that you want to learn about, let me know. It might not make the 2013 roster, because there are only 2 hours per month that I can book, but we will get there eventually. January - Chris Johnson June - Reggie Brooks October - Lou Brown Still working with Alan Cowgill and one other speaker for a mini conference in or around May Ron LeGrand Real Estate Convention I urge any of you who can, attend the January th Ron LeGrand Convention in Orlando. I just found out I have the honor of speaking at the convention, so I look forward to seeing you there!

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17 USA Real Estate Mentoring Group Your Highway to Success Mentoring is the key to your success in Real Estate Investing! We are: -Successful Investors Currently Investing in Today s Real Estate Market - Best Selling Authors -Our Group of Mentors Have Personally Trained Over One Hundred Real Estate Investors -We KNOW Pennsylvania, and How to Invest Legally in Pennsylvania! -Access to Our Team Members and Systems -We Meet Once Per Month in the Pittsburgh Area (Wexford) -1 st Meeting is Free -Different Levels of Training and Pricing Available Visit for more info Brian Snyder:

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