WIAcademy EducateBlog

The Entrepreneur’s Almanac: Fundamentals, Facts and Figures You Need to Run and Grow Your Business by Jacquelyn Lynn is a treasure trove of advice for business owners and managers on how to start, run, and grow a business. It’s designed to be something you can read for just a few minutes each day and get ideas and inspiration that will help you boost profits, increase productivity, and improve efficiency. You’ll find words of wisdom from real-world business owners, including names you’ll recognize—such as Russ Whitney, Robert Kiyosaki, Kim Kiyosaki, and more.

The Entrepreneur’s Almanac belongs in your own personal library and will make a great holiday gift as well. It’s available online and in all major bookstores.

Posted 08:51 AM | Permalink | Comments (0)

The rich may be different, but millionaires and billionaires are people, too. One of the more entertaining aspects of Why We Want You to be Rich: Two Men, One Message by Donald J. Trump and Robert T. Kiyosaki is the glimpse into the private lives and motivations of these two very wealthy men who are committed to teaching financial literacy to as many people as possible. Beyond the entertainment—and certainly more important—is the information and the primary message, which is that you need to take charge of your own financial future.

The book is divided into five parts. In the first, Trump and Kiyosaki explain how they met and decided to write the book. In the second, they explain their theories on investing and why investing to become rich is not risky but very predictable—if you know what you’re doing.

Parts three and four are worth reading and rereading. In part three, Trump and Kiyosaki share defining moments in their lives. Each chapter asks a “what did you learn from …” question, and both authors reveal significant insights into what has shaped them into the men they are today.

Responding to “What did you learn from your father?”, Kiyosaki notes: “Our traditional education did not prepare us for the real world. It prepared us to be employees. … Regardless of whether we are rich or poor, smart or not smart, the one common denominator we all have is that we use money.” To the question “What did you learn from your mother?”, Trump writes: “My mother’s advice was simple but wise. It cuts to the core and keeps me focused and well-balanced. ‘Trust in God and be true to yourself.’ It doesn’t get any better than that.”

In part four, Trump and Kiyosaki offer advice for readers at all stages and situations. No, they don’t explain step-by-step how to invest in a property or choose a stock; instead they show readers how to educate themselves and take control of their financial lives, regardless of where they are at the moment. They don’t tell you what to do; they tell you how to figure out for yourself what is best for you.

Finally, in part five, they push to you develop a plan and take action. They write: “Ninety percent of the investing public wants to be given the magic formula, the answer that will make them rich. … You will need to find your own magic formula.”

The book concludes with both Trump and Kiyosaki urging you to do some serious and perhaps even painful self-evaluation. By itself, this book can’t change your life—it’s just words on paper. But it can guide you to the plan and tools to do it yourself.

Trump and Kiyosaki, along with their co-authors Meredith McIver and Sharon Lechter, have produced one of their best works with Why We Want You to be Rich: Two Men, One Message.

Book review by Jordan Taylor

Posted 08:48 AM | Permalink | Comments (0)

How much should you pay for a property? Certainly you’ll want to consider what the seller is asking, but you should base your offer on the market, the condition of the property, and the cash flow and profit it will generate for you.

Let’s say you’re buying a single-family or small multi-unit residential building. Here are the steps to determine the maximum amount you’ll pay:

1. Determine the after repair value—that is, the market value of the property after you’ve completed any necessary repairs and fix-up.
2. Calculate the fire sale price, which is the amount slightly under market value that would assure you a quick sale.
3. From the fire sale price, subtract your repair and fix-up costs plus your sales and closing costs. Then subtract the amount of profit you want on the deal.

The figure you have left is the maximum amount you should pay for the property. Use this formula whether you are buying for a quick turn or to hold long-term.

Posted 08:44 AM | Permalink | Comments (14)

Last month, we looked at the delegation side of your Power Team—the people who will do things for you that will help you reach your financial goals. Now it’s time to discuss the brain trust and money side of your team.

Remember that your Power Team is made up of people who profit when you succeed. This isn’t a club with official membership; it’s people, companies, and organizations with whom you have cultivated a relationship that benefits you both.

Knowledge is power
You can’t be expected to know everything, which is why you need professional advisors on your Power Team. Put together a strong brain trust with these people:
CPA who understands real estate. Choose an accountant who is experienced and knowledgeable about real estate investing so that you’ll get good advice on record-keeping and tax issues.
Attorney. There’s room for more than one lawyer on your Power Team. For yourself, you need a real estate attorney to represent you as necessary in your transactions, to review contracts, and perhaps even to handle closings for you. You can also benefit from networking with attorneys whose practices focus on other areas, such as marital law (divorce), bankruptcy, and probate, because they are likely to have clients who could use a connection to a good real estate investor.
Other investors and business owners. Other investors are not your competitors; they can—and should be—your allies. Look for other investors who have money but aren’t interested in the day-to-day work of finding and negotiating deals or managing property. You should also be networking with at least one, and preferably more, other investors who are using the same or similar strategies as you. You can share ideas and learn from each other. Because real estate investing is a business, you want business owners on your Power Team for the same reason—you can share information and network with them.
Insurance agent. Find an independent commercial agent who is knowledgeable about insuring investment real estate and who represents a variety of carriers so that he can shop your coverage around and get you the best deal.

Where is the money?
Access to funding sources is critical for real estate investors. Because different transactions call for different types of loans, you should have a mixture of financial resources on your Power Team.
Bankers. You need at least one—but ideally two or more—commercial banker to be a resource for you when you need bank loans, whether you’re borrowing for real estate or for other business purposes. Making a banker part of your Power Team will help you get the best possible services and rates from your bank.
Government grant and loan expert. Find someone who understands the complexities and challenges of government funds. Most large banks and many community banks have a government loan expert on staff.
Mortgage broker. You can’t afford to spend a lot of time chasing financing, so have a mortgage broker do it for you. Your mortgage broker should understand what you do, enjoy working with investors, have access to traditional as well as nonconforming lenders, and be willing to work with buyers who have poor credit. You may need more than one mortgage broker on your Power Team.
Hard money lender. Find at least one hard money lender who can help you when you need this type of financing and is willing and able to refer you to other hard money sources as needed.
Private money lenders. These are the people who are willing to finance your deals but who don’t operate as hard money lenders. Put as many of them as you can find on your Power Team.

To find the people you want on your Power Team, you have to get out there and meet them. Join professional associations such as your local real estate investors club and property managers association. Talk to everyone you know and meet about what you do; you’ll be surprised who will step up and offer to help you. Remember, you’re not asking for favors—you’re building mutually beneficial relationships. That’s why it’s critical that everyone on your Power Team be positive and supportive; don’t pollute your team with negative people and naysayers who might stop you from achieving your goals.
Finally, keep in mind that assembling and maintaining a Power Team is an ongoing process. Your team should never be static. Over the years, people will drop off and you’ll meet new people who will make strong additions. Always be aware of the importance of your Power Team; cultivate it, nurture it, and kept it working hard for you.

By Jordan Taylor

Posted 08:40 AM | Permalink | Comments (2)

Community Redevelopment Agencies (CRAs) are great resources for real estate investors, especially if you’re interested in rehabs and/or areas that have been rundown but are being revived. For an article showing what CRAs can do, read “Governments turn to CRAs to pay for a better future” in today’s Orlando Sentinel.

Jackie

Posted 07:38 AM | Permalink | Comments (0)

One of the joys of watching children grow up is seeing them learn to be independent. Certainly independence and self-reliance are qualities to be admired, but when it comes to real estate investing, interdependence on the right people can give your business a tremendous boost. The best way to create productive interdependence is to build a Power Team.

A strong Power Team is made up of people to whom you can delegate tasks when your time can be better spent elsewhere. It’s also your brain trust—the people you can rely on for advice and guidance. You don’t have to formally invite people to be on your Power Team; simply cultivate a relationship that benefits you both.

Don’t do it yourself
It’s common for new real estate investors to want to do everything themselves, but it isn’t practical or productive. Sure, you can save some immediate cash by doing a lot of the painting, cleaning, and fixing-up of your properties yourself, but compare the savings to the cost of lost opportunities. You might save a few hundred dollars by doing the work yourself, but how much could you have made if you had spent that time finding and putting together another investment? And you can probably find plenty of deals on your own, but how many more could you do if you had other people looking for potential investments for you?

Let’s take a look at some of the people who could be valuable members of your Power Team by doing things that are important but that don’t directly generate revenue for you.

Realtor/Real Estate Broker or Agent. When you’re the buyer, Realtors work for you for free because they’re paid by the seller. Let them search for properties, make offers, and help you negotiate deals. If you’re investing in different types of real estate or in different areas, you may want to have different Realtors who specialize in those areas on your team.

Title Company. Title companies handle closings, conduct title searches, and provide title insurance. In most states, sellers typically pay for title insurance, so the services of a title company are free to you as the buyer. Even though you may know how to conduct a title search, a title company can usually do it more efficiently—and they’re going to have to do it anyway before issuing title insurance. Title companies may also be a good source of leads for deals; they know when transactions fail to close at the last minute and may be able to refer the stranded buyer or seller to you.

Bird Dogs. These are the people who are out in the areas where you want to invest that can alert you to potential deals. Bird dogs may be lawn care providers, pizza delivery people, utility workers, mail carriers, and other service workers who can tell you about possible opportunities they see in the neighborhoods where they are working. Even your own service providers, such as your barber or hairdresser, nail tech, or staffers at places you go regularly can be bird dogs for you. Just give them some guidelines so they know what you’re looking for. Many investors pay their bird dogs a referral fee if the deal closes; however, in some states, such referral fees are considered real estate commissions and can only be paid to licensed real estate agents and brokers. Check with a real estate attorney to verify the laws in your state before offering compensation to your bird dogs.

Contractors, Handypersons, and Craftspeople. If you’re going to do rehabs or hold and manage rental properties, you need people to do the actual physical labor of repair and maintenance. When it comes to contractors, a self-employed solo operator or a very small business will likely give you better prices and be more flexible to work with than a bigger company. If you have rental properties that need maintenance, a good handyman is a must. And if you’re going to do rehabs, you’ll need a team that includes a painter, plumber, electrician, drywall installer, and heat and air-conditioning technician.

Property Managers. Even if you prefer to manage your own units, build a relationship with property managers. They’re a great source of advice as you’re learning the business and you may eventually want to turn your properties over to one of them. Also, property managers often know when good investments are coming on the market.

These are the people who are happy to do things for you because they benefit when you’re doing well. In par two, we’ll take a look at the brain trust and financial side of your Power Team—the people who have the knowledge and money to help you reach your goals.

Jordan Taylor

Posted 10:42 AM | Permalink | Comments (0)

States are cracking down on foreclosure assistance scams, and that’s a good thing. People in foreclosure have it tough enough without being preyed on by con artists.

If you’ve taken foreclosure investing training at Wealth Intelligence Academy, you know how to legitimately and profitably invest in foreclosures, and how to create a win-win-win situation that benefits you, the homeowner, and the lender. Remember that foreclosure laws vary by state, so be sure you are in compliance with the laws of the state in which you are investing. Also, be sure you are communicating very clearly to the homeowners you work with so they understand what you’re doing and how the transaction will work. Don’t let yourself be confused with scammers who deliberately mislead and defraud consumers.

Here’s a news release issued on Oct. 19 by the Texas Attorney General about action that state took against such a foreclosure scammer:

Attorney General Abbott Halts Foreclosure Rescue Scam's Unlawful Texas Operations

Clients of Foreclosure Assistance Solutions urged to call their lenders immediately

AUSTIN – The 408th District Court has issued a temporary injunction against a Florida-based "foreclosure rescue" scheme. Under the court order sought by Texas Attorney General Greg Abbott, Foreclosure Assistance Solutions, LLC of Florida, and its principal operators, Herb Zerden and Adolfo Quintero, as well as J.W.W. Services, Inc. of California and owner John Woodruff, are prohibited from targeting and deceiving Texans who fall behind on their mortgage payments.

Last September, the Attorney General obtained an emergency restraining order and froze assets belonging to Foreclosure Assistance Solutions and its various operators. The temporary injunction issued this week extends the initial order, securing approximately $750,000 in fees that the defendants charged more than 700 Texans who paid for its services. The monies will remain frozen pending further orders from the court.

"This court ruling prohibits these unscrupulous 'services' from unlawfully preying on struggling homeowners," Attorney General Abbott said. "Texans who fall behind on their mortgage payments should be very wary of anyone promising to save their homes for a large fee. We will remain vigilant and will take aggressive enforcement action to protect Texas consumers."

According to the Attorney General's enforcement action, the defendants mailed cards and letters to homeowners who were facing foreclosure because of delinquent mortgage payments. The defendants' promotional materials boasted established relationships with mortgage companies and banks nationwide. These purported relationships, Foreclosure Assistance Solutions claimed, would enable it to persuade lenders to refrain from foreclosing on its customers.

Homeowners who responded to Foreclosure Assistance Solutions were pressured to immediately sign a $1,200 contract. Once Foreclosure Assistance Solutions received its fee, company representatives rarely interacted with clients. When homeowners repeatedly called the company seeking information or action, they were ignored. Because the terms of the company's customer contract strictly prohibited homeowners from directly contacting their mortgage companies, Foreclose Assistance Solutions' inaction worsened the situation for many homeowners.

The temporary injunction prohibits the defendants from continuing to target and mislead troubled Texas homeowners.

The court's order also requires that Foreclosure Assistance Solutions disclose important account information to its Texas customers. Specifically, the defendants must provide each of its customers with a written statement describing every contact the company's representatives had with the customer's mortgage company. The disclosure statement must include the specific dates of contact, the mortgage company representative with whom they spoke, and the results of the contact. If Foreclosure Assistance Solutions representatives learn they cannot prevent a home from going into foreclosure, the company is obligated to notify the home owner within 48 hours. Foreclosure Assistance Solutions must also provide refunds to any of its existing customers it is unable to help.

The Attorney General reminded the company's customers that they should not wait for Foreclosure Assistance Solutions to contact them about the status of their mortgage. Homeowners need to call their lenders immediately and ask what preventative measures, if any, the defendants have taken on their behalf.

The pending legal action seeks court-ordered restitution for homeowners who were harmed by the defendant as well as civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act. Additionally, the Attorney General has requested up to $5,000 per violation for failure to register as a business that conducts telephone solicitations.

The Office of the Attorney General is engaged in a variety of efforts to protect Texas homeowners. Last month, Attorney General Abbott launched the Texas Residential Mortgage Fraud Task Force, a partnership that involves key state regulatory agencies to take a proactive stance towards tracking and prosecuting mortgage fraud.

This month, Attorney General Abbott urged three of the largest mortgage lenders and servicing companies doing business in Texas to take steps to address the high rate of foreclosures in the state. In meetings with EMC Mortgage, Countrywide Mortgage and Litton Loan Servicing, he outlined five measures that the companies should implement to restore borrowers' financial stability, including stepping-up efforts to convert adjustable rate mortgages to fixed-interest loans; subjecting more delinquent loans to mitigation first rather than immediately submitting them to an antagonistic collections process; improving communication and outreach with consumers; waiving penalties and fees while companies work with troubled homeowners; and promptly addressing complaints filed against them with the Office of the Attorney General.

Earlier this year, Attorney General Abbott secured $21 million in restitution for Texas homeowners who were harmed by lending giant Ameriquest Mortgage Co. That case resolved allegations that the company and its affiliates did not clearly disclose certain terms to homeowners, including unpredictable adjustable rates.

Homeowners who believe they have been harmed by this or similar fraudulent businesses may call the Office of the Attorney General's toll-free complaint line at (800) 252-8011 or file a complaint online at www.oag.state.tx.us.

Posted 04:27 PM | Permalink | Comments (0)

If you’re investing in foreclosures, especially in Texas, you will be interested in what Texas Attorney General Greg Abbott is asking lenders and loan servicing companies to do to prevent foreclosures in that state.

Attorney General Abbott Urges Top Lenders, Loan services to Address Growing Housing Crisis

Abbott presses companies to adopt new measures to help consumers avoid foreclosures

AUSTIN – Texas Attorney General Greg Abbott today proposed a series of foreclosure prevention measures to three of the largest mortgage lending and loan servicing companies. At a meeting convened by the Attorney General, the industry leaders were asked to implement several important measures that are designed to prevent Texans from losing their homes to foreclosure.

By the end of next year, approximately $600 billion worth of subprime adjustable-rate mortgages are expected to increase their monthly payments for homeowners across the country. During today's meeting, Attorney General Abbott urged Countrywide Mortgage, Houston-based Litton Loan Servicing and Dallas-based EMC Mortgage to implement several measures designed to preserve homeownership in Texas, improve consumer communication, and resolve complaints.

"Mortgage lenders, loan servicers, and public officials must work cooperatively on behalf of Texas homeowners who are affected by the looming housing crisis," said Attorney General Abbott. "Because of the housing industry's tremendous economic impact, resolving this issue is important to the Texas economy's continued growth and expansion. We believe that the proposals laid out in today's meeting offer real solutions that will help keep Texans in their homes."

Attorney General Abbott outlined five measures that lenders and loan servicers should implement to restore borrowers' financial stability and reduce foreclosures in Texas:

• Provide long-term solutions for borrowers with adjustable-rate mortgage loans (ARMs). Mortgage companies should consider easing homeowners' mortgage-related burdens by converting adjustable-rate loans into fixed-rate products. Many ARM loans have already adjusted and pushed countless consumers into the foreclosure process. Because of high foreclosure costs, this proposal benefits lenders, loan servicers and homeowners.

• Mitigate first, collect second. Under the protocols currently used by most lenders, homeowners who have difficulty making payments receive expedited referral to the collection process, which is often antagonistic and intimidating. Attorney General Abbott encouraged companies to engage homeowners before sending a case to collections by reviewing each case in a non-confrontational setting and exploring solutions, the chances of a debtor repaying their obligations increases.

• Create an in-house resolution committee to address consumer complaints. Attorney General Abbott urged today's participants to dedicate in-house staff to immediately address consumer complaints received by the Texas Office of the Attorney General (OAG) and report promptly to the OAG on the status of those complaints.

• Improve communication with consumers. While many companies have adjusted their protocols and are engaging consumers who face imminent foreclosure, Attorney General Abbott recommended that companies improve their communication efforts. The attorney general also encouraged the companies to contact consumers well before ARMs reset to higher interest rates so that fixed-rate options can be explored.

• Waive applicable penalties and fees. Attorney General Abbott urged lenders and loan servicers to waive penalties and late fees associated with loans at risk of foreclosure while the companies work with troubled consumers to preserve their loans.

Attorney General Abbott also requested that today's participants follow up with the OAG within 30 days on their implementation of these five measures. Specifically, he wants to know the percentage of ARMs that were converted to fixed-rate loans and the number of service fees that were waived.

Protecting Texas consumers is one of Attorney General Abbott's top priorities. Under the Deceptive Trade Practices Act, the OAG has prosecuted a variety of deceptive loan practices, including title-related scams, fraudulent refinancing ploys, and other mortgage-related fraud.

Earlier this year, the OAG obtained $21 million in restitution for Texans harmed by lending giant Ameriquest Mortgage Co.'s deceptive lending practices. The settlement resolved allegations that Ameriquest and its affiliates did not adequately disclose certain terms to homeowners, including whether loans carried fixed or adjustable rates. According to court documents filed by the OAG, Ameriquest also charged excessive origination fees and prepayment penalties, refinanced borrowers into improper loans and inflated appraisals that qualified borrowers for loans.

In 2006, Attorney General Abbott negotiated a landmark agreement with Green Tree Servicing L.L.C., a Minnesota-based firm that services manufactured housing debts in Texas. Under the settlement, Green Tree agreed to assist more than 1,200 Texas homeowners who may have been issued invalid titles to homes they purchased from more than 115 unlicensed retailers in 2003. In a related move, the Attorney General secured an injunction and asset freeze against the unlicensed sellers.

The Office of the Attorney General has also halted scams purporting to save homeowners' properties from condemnation. It has also cracked down on various title-related and refinancing scams.

To better assist Texans who are considering a mortgage loan, Attorney General Abbott recently added new online resources to the agency's Web site (www.oag.state.tx.us). The new Web page, "Avoiding Home-Buying Pitfalls and Scams," provides consumers with guidelines about the home-buying process as well as other helpful information. The Web page also provides tips on recognizing "foreclosure rescue" scams, equity-stripping schemes and other refinancing pitfalls.

Consumers who believe they have been targeted by a mortgage-related scam should contact the Office of the Attorney General at (800) 252-8011.

Posted 02:27 PM | Permalink | Comments (0)

Foreclosures are likely to be a popular investing strategy for at least several more years. How do you find foreclosure opportunities? Consider David Cowgill’s advice at http://www.realestateweblog.org/how-to-find-foreclosures-where-do-i-start.php#comment-181

Posted 06:58 PM | Permalink | Comments (0)

As you pay off your debt and work on increasing your credit score, remember that closing old credit card accounts can work against you. Credit scoring systems consider the age of your accounts as well as available credit and payment history in calculating your credit score. An established account with available, unused credit will actually boost your score. New, maxed out cards will work against you – even if you pay them on time.

So when you pay off an account, don’t close it. Either use it only for purchases you know you’ll pay in full every month, or stash the card someplace safe – but leave the account open.

What are some effective strategies you’ve used to raise your credit score? Or what have you done that backfired?

Jackie

Posted 06:39 AM | Permalink | Comments (0)

I saw an article on apartments.com about exotic pets that might be appropriate for apartment dwellers. The article, which was written for tenants, said that if the lease doesn’t allow dogs or cats, they might want to try getting a sugar glider, ferret, hermit crab, or pot bellied pig.

If you have rental property, take a look at the pet-related language in your lease and be sure you haven’t left a loophole big enough for some exotic creature to crawl through.

Jackie

Posted 04:59 AM | Permalink | Comments (0)

Recently I received the monthly newsletter of a real estate agent I know in Orlando. In his introduction, Jerry Stoffer wrote:

The present real estate market is one in which both Sellers and Buyers are fearful. In fearful times, we look to sources of inspiration that may be available to us from the history of mankind. I was comforted by the Prophet Jeremiah, in the Old Testament, who prophesied accurately the loss of Jerusalem to the Babylonian King Nebuchadnezzar.

And it did.

Posted 02:13 PM | Permalink | Comments (0)