Ca$hFlow

EXPRESS

Vol. 2, No. 2, 2014

Passive Income for Today & Tomorrow

PRICELESS

FirstKey Lending
Offers Investors
Unique Options

ou Asked, They Listened:

FirstKey Offering More
Ways to Finance Your
Investments.

A year ago, New York-based FirstKey

Lending was the first to step into a
new financing space making capital
accessible to small- and medium-sized
investors in one- to four-family residential rental properties nationwide.
The financial firms Chief Executive Officer, Randy Reiff, says the
firm purposefully positioned itself
to invigorate the small and middle
markets and to empower smart,
entrepreneurial investors to build and
optimize their portfolios and businesses.
The financial backing of Cerberus
Capital Management, L.P., one of the
countrys largest private investment
firms, gave FirstKey the opportunity to
hit the ground running while focusing
its attention on developing the products its customers needed.
Following the successful introduction of its Conventional fixed- and
floating-rate loan products for larger
investors needing $5M to over $100M
in funding, FirstKey launched its
Express loan product for investors
seeking loans of $5M or less in late
2013. That product has delivered in a
big way. Weve been thrilled at the
response of real estate investors to our
Express product, which we were able
to introduce in an affordable way by
streamlining the documentation and
closing processes, Reiff said.
These Express loans offer investors reduced borrowing costs and a
much more efficient process than was
previously available to these owners
so that they can buy additional one- to
four-family properties, refinance their
existing debt or cash out.
Reiff said that FirstKey has seen
strong demand for its products and
only expects that demand to increase.

Our business is accelerating as more

and more customers most of whom
have historically had only limited access to this type of financing become
aware of the variety of products FirstKey offers, Reiff noted. Historically, less than 25% of the borrowers
we are targeting have availed themselves of financing of any type. Were
very excited to see that number grow
as the rental finance market continues
to expand.
Reiff also pointed out that FirstKey
offers products to accommodate a
number of different types of investors. Theres been a lot of focus
recently on the very large investors
in the one- to four-family residential
rental properties, but its important to
remember that the largest segment of
this market is represented by the more
entrepreneurial owners who may own
as few as 10 properties or less, Reiff
said. These owners typically have
strong ties to their communities and
are looking to grow their portfolios in
a disciplined fashion over time. Were
here to make sure that these local
investors have the opportunity to grow
and develop their investments.
FirstKey couldnt have had better
timing in coming to market with a
lineup of new mortgage loan products
aimed at the small and middle market.
Looking to fill the void in affordable investment housing financing,
FirstKey has provided the fuel for real
estate investors to make it happen.
In addition to the successful launch
of the Express loan product, FirstKey
continues to be the market leader in
Conventional loan products geared
towards larger investors as well.
Whats more, CEO Randy Reiff
shared an exciting new loan program being rolled out for small- and
medium-size investors in an exclusive
interview with Realty411 magazine.

Randy Reiff, CEO of FirstKey Lending

FirstKey Lending closed

dozens of Express
and Conventional
Transactions recently.

$1,659,000

41 Properties located
in TX, OH, GA

$4,000,000

76 properties located
in NC, SC

$9,750,000
85 properties
located in CA

$18,500,000
340 properties
located in FL, GA

$32,00,000

450 Properties located

in FL, IN, MD,
MN, NC, TX

FirstKey Lending
Bridge Loan Features:
Loan Amounts: $10M+
Rate Type: Floating
Loan Term: Up to 18 Months
Property Type: 1- to 4- family
residential
Loan-to-Cost: Up to 65%*
Amortization: Interest only
Interest rate: Competitive pricing
*Higher on a case-by-case basis

FirstKey Lending Express

Fixed Loan Features:
Loan Amounts: $500,000 to $5M
Rate Type: Fixed
Loan Term: 5 and 10 year
Property Type: 1- to 4- family
residential
Loan-to-Value: Up to 75%
Amortization: 20 to 30 year
Interest rate: Competitive pricing
For more information, please
contact Bill Ruiz or Scott San
Fillippo at: 1-855-299-1944

Continued on pg. 21

INSIDE: Strategies to Increase Your Wealth PLUS: Highlights from Our National Expos

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Diana Nyad

Author & World Record Holder

Bruce Norris
Ben Gay III
tony Alvarez

July 18-20, youre invited to a life-changing event: the Millionaire Maker.

It will take place only once, will be followed by 60 days of mentoring,
and I guarantee it will break the box in which youre living.
What does try mean to a world record breaker? Millionaire Maker dares you
to look in the mirror and realize you have more inside than you know. On Friday night,
together well watch a very special documentary about the inspiring story of worldrecorder holder, Diana Nyad. At the age of 61, what motivated her to be the first person
ever to swim from Cuba to Florida in shark infested waters? Youll find out first hand when
she joins us live on Saturday, challenging you to rethink what try in your life really means.
How do you break out of the box? Ive hand-selected over 15 guest speakers
and panelists to join us. Prepare to be motivated as we explore first-hand how these
successful real estate investors and business pros realized their untapped potential.
Then, challenge yourself to discover your personal formula to take that same rigid
discipline you have in your best areas of accomplishment and use it to improve every
other area of your life.
60 days of Mastermind Mentoring? Thats right. After the live event, youll join me
and one of our speakers weekly for Mastermind Fridays. For 60 days, well explore
additional reading materials to keep you motivated and committed to the goals you set.
Well also keep you updated on personal goals we speakers have set for ourselves.
Were all just one habit away from living a very different life. Well be doing this together.
Millionaire Maker asks you to commit 60 days to attain the next level in whatever is
important to you now! Is it about realizing financial success via real estate investing?
Yes! Will it be about learning a step-by-step process to attaining your specific personal
goals? Yes! Is it about learning that the box youve chosen to confine your life to can be
replaced by iron will and new-found skills? Yes! Please dont hesitate, commit right now
to attend. There is limited seating due to the nature of the mentoring piece after the live
event. Change the trajectory of your life by joining us in July for this one-time-only event!

Mike Cantu

Also FeAturING:
Danica Patton, Jennifer Shenbaum,
Andrea Esplin, Holly McKhann, Rick Solis,
Doug Van Soest, Steve Landis, Bill Tan,
Silvio Brigliadoro, Iris Veneracion, Jack
Fullerton, Ward Hanigan, and Randy
Grigg.

DAte & loCAtIoN:

Friday, July 18 sunday, July 20

Westin South Coast Plaza
Costa Mesa, CA

reGIster At:

www.thenorrisgroup.com/millionaire
or call (951) 780-5856

$1,797 until 6/16

$2,297 after
Event includes Friday evening movie snacks;
breakfast, snacks, and lunch Saturday and
Sunday; all seminar materials during live event;
web portal access with additional content and
recordings from live session. Mentoring books
materials will be responsibility of attendees so
each can choose preferred format.

Sincerely,

P.S. I so strongly believe in this event Im offering a money back guarantee. If after the first
full day youre unhappy, hand in your manual and Ill refund admission. In addition, use
The Norris Group as your hard money lender on a Socal deal within two years after the
event and Ill rebate the cost of the event 0.5% per loan until you get it back in full. See
the web site for full rebate details and to register before we sell out. See you July 18th!

11x15-411Mag.indd 1

5/13/2014 12:28:11 PM

Welcome

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for real estate investors

Thanks for joining us

once again for a new
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occupied single family, multifamily, mixed-use residences, and challenged
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Ca$hFlow
EXPRESS

FREE

Contents - 2014
Learn How to Create Stock Investors Manifest a
12 & 18 Attract Private Lenders
FirstKey Lending Offers Options Cashflow Mindset
Market Wealth Today
Passive Income for Today & Tomorrow

No. 1 / Vol. 1 2012

4 Publishers Welcome Note

5 The Millionaire Maker Returns

13 Investing in Texas Land

estate investing, trading stocks, building

a strong MLM business, etc. You will not
succeed. Its like trying to grow corn in
a field of sand. The seeds will not germinate and youll end up with next to nothcan remember my first time playing to harvest in the fall.
ing Robert Kiyosakis Cashflow
How, you ask, does this relate to the
board game about eight years
Cashflow game?
ago and how it
Well, after playing
started a chain
the game a bunch
of events that continues
of times, I learned
to this day. What stuck
the how to of
with me most was not the
getting out of the
how to of playing the
rat race, but I still
game but the people that
was not able to
I met at the event. These
take what I learned
were not like the normal
from the game and
people in my life that
Doug Carver (left) and Chris Hanson disapply it to my realwould tell me I was crazy play the Cashflow game to group members.
life financial situfor trying to start my own
ation. However, I
real estate business or
realized that the time I was spending with
that financial freedom was impossible
my new Cashflow friends was changing
without a steady well-paying job. The
the way I thought about money and my
people I met were excited about learnfinancial future. I no longer viewed the
ing and expanding their knowledge on
stock market as a giant rigged system for
how to achieve financial freedom. They
losing money. I began to see the tremenwere active investors in real estate and
dous opportunities in the sinking real esthe stock market. They were small busitate market even as many people I knew
ness owners with a passion and vision
were losing money on deals that had gone
for creating more financial success in
bad. Overall, I saw for the first time optheir lives. Overall, they had a mindset
portunities all around me to create wealth
for prosperity that I like to call a Casheven as the newspapers talked constantly
flow mindset.
of the Great Recession.
A lot of people complain that Kiyosaki
Today as a result of my ongoing indoes not provide the specific details on
volvement playing and organizing local
how people should implement his stratCashflow events in Southern California,
egies to create financial freedom in his
I have a thriving real estate investing
books and programs. Truth is he never
business. It was after speaking with one
spells out a step-by-step how to for
of my Cashflow friends who was a real
building long-term financial freedom.
estate investor that I was encouraged to
What he does teach is far more imporstart wholesaling distressed properties. It
tant, and that is how to create a Cashturned out to be a great decision. More
flow mindset. Kiyosaki describes it in
recently, Ive begun to learn how to suchis book Cashflow Quadrant moving
cessfully trade in the stock market using
your mindset from the E (employee) and
options. As a self-proclaimed real estate
S (self-employed) side of his Cashflow
zealot, I never would have dreamed of
quadrant to the B (business owner) and
investing in the equity markets. HowevI (investor) side of the quadrant. In layer, after playing Cashflow 202 with my
mans terms, its the mental shift from
Cashflow friend ,who is an active trader,
someone who seeks financial security at
and learning about his trading system, I
all costs to someone who can confidently
was able to see the opportunity before
and knowledgeably take measured risks.
me. I now fully expect that investing in
This is a simplistic definition but a very
the markets will be a huge part of my fuimportant one to understand. Without the
ture financial success in addition to my
correct mindset, it really doesnt matter
how much you learn the how to of real
By Doug Carver
Organizer Pasadena and Burbank
Cashflow Meetup Groups

15 The Investment Lab is Open

6 Management Tips by Pam Texas

16 Incorporate a Business

7 Out-of-State Investment Advice

21 & 23 CashFlow Resources

9 Rehab with Andrew Cordle

By Tyrone Jackson
TheWealthyInvestor.net

Yes!

You can be
rich from
owning real
estate and trading stocks.
Weve all heard the story of the
little old lady who lived modestly
and worked as a school teacher for 40 years. She never
earned more than $35,000 per
year, owned a modest home,
and shared her life with two
cats. Once she died, her relatives discovered a $150,000
life insurance policy and $1.5
million in stocks that she left
to the elementary schools
scholarship fund.
The national media loves
to air these stories. It seems
there are several old ladies
who fit this seemly unique
profile year after year. How could
that be?
Investing in stocks is not the
worlds most challenging task. In
fact, at its core, its very simple. The
truth is that the stock market creates
millionaires every year. Investing in
stocks, with wealth in mind, is easier
than you think.

companies and products with which

you are familiar.
If youve ever opened a can of
Coca Cola on a hot summer day and
felt refreshed and invigorated, why
not own the stock? Its a product you
know with a story you understand.
When I say a story you understand,
I mean to say that you understand
how the Coca Cola
Corporation makes
money, or to express it in Wall
Street terms, you
understand
how
the company earns
revenue. The more
bottles and cans of
Coke that Coca
Cola sells around
the world each day,
the larger the companys profit. Over
the past ten years Coke stock (symbol
KO) has risen from around $40 per
share to a high of $71 $1000 invested in Coca Cola stock ten years
ago would be worth $4,100 today;
$10,000 invested in Coca Cola stock
would be worth $41,000 today.
If you spend more than $100 per
year eating fast food, why not own
the stock? Over the past ten years
McDonalds stock (symbol MCD) has
risen from a low of $15 per share to a
high of $95 per share.

10 Q-n-A with Zinc Financial

24 Scenes from Our Expos

26 How to Avoid Capital Gains

From the Publishers of Realty411 Magazine

PUBLISHED BY
FOUNDER
Realty411
Linda Pliagas
ADVERTISING
pliagas@msn.com
805.693.1497
EDITORIAL STAFF
EVENTS & EXPOS
Hannah Ash
Teri Burke
Lori Peebles
Suzanne Lilly
Stephanie Mojica
Lawrence Ruano
COPY EDITOR
WEBSITE
Lori Peebles
Invest In What You Know
Maria Victoria
PHOTOGRAPHER
Wanna be a good stock market inTO REACH US, CALL:
Continued on pg. 12
vestor? Keep it John start with
simple and DeCindis
Continued on pg. 2
310.499.9545
PRODUCTION
Personal Finance News from the Publishers of Realty411 Magazine - www.Realty411Guide.com
We provide complimentary copies
Lori Peebles
for your CashFlow Group or REIA
Augusto Meneses

CashFlow Express is published in Santa Barbara County by Realty411. Copyright2013.All Rights

Reserved. Reproduction without permission is strictly prohibited. The opinions expressed by writers and
columnists are not endorsed by the publishers and/or editorial staff. Before investing in real estate,
stocks, bonds, mutual funds, gold, or securities, seek the advisement of a trusted financial advisor,
attorney or tax consultant. Investing in any asset and market sector is risky business and may result in
the loss of capital. Please invest responsibly. PRINTED IN THE USA ~ GOD BLESS AMERICA

Connect to our virtual network ~ Search for us here:

f you are reading this issue then most likely you

have attended one of our live events. When I first began to host real estate
gatherings back in 2008, we attracted a handful of people in Los Angeles
who were interested in learning and talking about real estate. Some people
already had experience and we shared ideas and tips, some guests were newcomers who came to observe and absorb.
My guests and I would often meet at the Marina del Rey library right on
the water at the quaint coastal city in California. It was the perfect place, as
the librarys benefactor Lloyd Taber was a wealthy real estate mogul who
bequeathed millions to the buildings renovation years ago.
Next, we started hosting larger educational gatherings at the Veterans Hall
in Culver City. Fast forward to the present and our company, Realty411, has
hosted events in San Diego, Indianapolis, Los Angeles, San Jose, Scottsdale,
Pismo Beach, Seattle, Atlanta and even New York City. Its a dream come
true, and we plan on hosting many more expos and mixers around the nation,
including upcoming events in Florida, Missouri, Ohio, and Texas.
Our largest expo has attracted up to 300 people and our smaller events
regularly unite an exclusive group of veteran real estate leaders. We plan on
expanding our events even further. My goals are lofty: I envision some day
hosting international real estate conferences this is precisely how much I
enjoy and believe in the power of networking.
It is a pleasure and privilege to meet the readers of our numerous publications. We produce our quarterly glossy Realty411 magazine, with Real Estate
Wealth as an alternate cover. We have separate distribution and websites for
each. The 100-page glossy is available at no charge at selected grocery stores,
and will soon be available in bookstores across the country.
Next, we have our REI Wealth Monthly, a digital and interactive issue specifically designed for online enjoyment. It was created for the Apple Newsstand by Noland Araracap, a San Diego-based technology enthusiast. Next, of
course, is our newspaper CashFlow Express, which is directly distributed at
our live expos and mixers, and at selected real estate events that we support
and sponsor around the country.
For the rest of the year, in addition to expanding our calendar of live expos, we will continue to expand our media and marketing company with special print supplements and new online websites. We just completed our first
Private Money 411 Special Supplement and are starting the second! It is our
mission to be an all-encompassing resource of information for investors. In
closing, Id like to add that if we can assist you in any way, or if you have any
feedback on our publications or events, please let me know. Your suggestions
and comments are always welcomed.

LindaPliagas

Contact us: 310.499.9545 or info@realty411guide.com

Be Social and Receive Regular Updates from Me on:
Facebook, Twitter, LinkedIn, Pinterest, Google+
Disclosure and Information for Readers and Expo Guests
The publications, events, expos and mixers promoted by Realty411guide.com and/
or their owners, employees agents and affiliates (collectively 411) are for informational and entertainment purposes ONLY. The information and presentations provided
therein do not constitute an offer or solicitation to buy or sell securities or real estate.
Please be aware that real estate investing is VERY RISKY. 411 is not responsible for
any of the information provided and/or statistical data presented, and do not reflect
the opinions, advice or research of 411. You personally are 100% responsible for your
due diligence, for all investment information and for all decisions with respect to
any potential investment or transaction. 411 strongly recommends that you seek the
advice of your trusted attorney, broker, CPA and/or financial adviser before investing.

CashFlow Express Page 4

The Millionaire
Maker Returns

by Bruce Norris

was my goal nine years earlier, make a

$1,000 a year for every year I was old.
What a big box I now lived in!
ur first speaker for our first Millionaire Maker since 2006 wet
Then one day, the bar was raised
his bed until eighth grade. During yet again. In one 3-hour meeting, Jim
high school he attempted to go out Rohn embedded a new concept into my
for baseball but quit before he ever brain; millionaire. He challenged the
got to the baseball field. During the first three
audience to stop kidding themselves
years of his work career he was fired five times. about the level of their commitment to
Somewhere during that time frame he was on
their dreams. As I listened to him, I felt
food stamps. His wife went without a car for the he had made some discoveries that had
first seven years of their marriage.
changed his life and once again, my
lifes trajectory changed in one day.
Our co-speaker, on the other hand, is a multimillionaire. He has bought, sold and funded
I arrived home that night and I wrote
purchases on over 3,000 properties. He correctly a series of audacious goals. When
predicted both the boom and bust cycles in Cali- reached, these goals would allow me
fornia. His company has won national awards
to live in a box I had never dreamed
and he is trusted with millions of dollars of other possible. Imagine having a choice of
peoples money. He was invited to address Fanwhat to do with my day, whatever I
nie Mae and FHA in Washington D.C. He has
wished! Imagine having enough money
earned a reputation as an honest and successful
or cashflow so that I never had to
business owner. And at an age when most men
work, but did so anyway because I love
look forward to retiring, he became a black belt
what I do!
in karate.
Until that night, I had never dreamed
What you may not realize is that these two
of a box that big.
very different men I have just described are
Is it possible to change your life in a
one and the same person. Me! What changed an
day? Yes, I truly believe thats how it
eighth grade bed wetter afraid to step up to the
works. You dont get a black belt in kaplate into a man that thousands trust for advice?
rate in a day, but there comes a moment when you
Ill tell you this; its something you have accommit to do whatever is necessary to reach your
cess to.
goal someday. It is in that moment of commitment
that the course of your life changes.
The first version of me had a very limiting
self-image and very low expectations. I had
In July, Im so pleased to bring an event back
placed my life in a very small box. The box
that we havent produced since 2006. Decide
I had assigned to my life was that of a person
right now to attend. The experience will change
who would barely scrape by; an average guy who your life by expanding the box you are living
would certainly never accomplish anything amaz- in, I guarantee it. At every Millionaire Maker, we
ing.
invite a special guest speaker. In 2005, our guest

What changed me from a man barely

able to feed his family into a millionaire?
What changed me from a man barely able to
feed his family into a millionaire?
It started with my first mentor at age 20; a
hardware store manager. While I was working
for him making $2.00 an hour, he was making
$100,000 a year working the same amount of
hours! One day he chewed me out for using such
a small portion of my talents and trying so little
on behalf of my family. That pissed me off! I
decided to work hard just to show him he was
wrong. He laid a challenge before me to become
more than I was. When I accepted that challenge,
it immediately changed the trajectory of my life.
His influence gave my life a bigger box to
operate in.
Nine years later, I was pretty happy with myself. I lived in a new 1,400 square foot house. I
had a steady job as a salesperson and was making nearly $1,000 for every year old I was. That

speaker was Jim Rohn. In 2006, it was Rudy Ruttiger (Notre Dame Football fame and inspiration
for the movie Rudy). This year, Im thrilled to
announce, well host one of our most motivational
speakers ever, without a doubt!
On the first night, we will watch world record
holder Diana Nyads documentary together. Ive
watched it three times and cry every time. Im
humbled by the effort she made attempting to do
what no human before had ever done. Watching
this documentary will challenge you to ask yourself this question: Have I really ever tried my
absolute hardest at anything?
Every speaker has been hand-picked for this
event, and every speaker or panel participant
has escaped the box they were assigned to and
now live life on their own terms. Thats what this
weekend will be about. You will leave with the
desire to break free from previous notions of what
CashFlow Express Page 5

life should be, and replace it with new goals

and dreams for you and your family.
Featured speakers include Diana Nyad,
Tony Alverez, Mike Cantu, and Ben Gay III.
I will personally moderate panels that will
include Danica Patton, Jennifer Shenbaum,
Andrea Esplin, Holly McKhann, Iris Veneracion, Rick Solis, Doug Van Soest, Steve Landis, Silvio Brigliadoro, Jack Fullerton, Ward
Hanigan, Randy Grigg, and Bill Tan. From
local real estate legends to up-and-coming
rock stars in our industry, the content will be
unlike any event youve attended before.
60 Day Mentoring
Millionaire Maker includes 8 weeks of follow up mentoring. After the live event, once
a week Ill be joined on a webinar by one of
our guest speakers where well dig into assigned readings to keep you motivated, share
additional insights, take your live questions,
and well even share our progress on some
goals well be making during the live event.
Its all about the Who
Millionaire Maker is not about the "When to
invest" or "How to invest" that most are used
to The Norris Group producing. Millionaire
Makeraddresses the "Who in You" that you
bring to real estate and life. Business professionals, real estate investors, and entrepreneurs of all experience levels are welcome
and encouraged to attend. I truly hope to see
you there.
For more information, please visit:
http://thenorrisgroup.com/millionaire

Does Your Property Manager

Impact Your Net Worth?
by Hannah Ash

Tips from Pam Blanco with PamTexas.com

ome airlines offer amenities such as gourmet snacks, personal televisions, warm face
towels and ergonomic seating while some
charge by the soda (and youre lucky if they
have your favorite kind). When it comes to property
managers, some inspect your property each month
and send you full reports - others simply collect
rents. Pam Blanco, much like the select airlines offering top-notch service, treats her clients as though
Your Property Manager Impacts Your Net Worth
they are an invaluable part of her business (because
As you know, the value of your property is not just
they are). A successful investor herself, Pam takes a
affected by changing market rates and neighborhood
different approach to property management - and has gentrification: the value of your property has much
an inside perspective on what investors should look
to do with the tenants to whom you rent and with
for and receive when it comes to choosing a great
how well the physical property is maintained. A less
property management company to safeguard their
experienced or negligent property manager can cost
investments. thousands of dollars and lots of headaches while
you
Investors who work with Pam, and most do so
an ace property management team tackles the hurdles
based on word-of-mouth, invest with greater peace of of investing (from leaky pipes to credit checks) so
mind knowing that Pams team is on the case. Needyou dont have to.
less to say, repeat customers are kind of her thing. I
caught up with her in the middle of a workday - she
Your Property Manager Grows Your Portfolio
was driving, not surprisingly, between properties in
Part of property management, Pam says, is knowing
her home state of Texas. Pam was happy to share
the local market inside and out. Her research team,
some rules investors should adhere to in choosing
for example, is always on the hunt for great properand working with a property manager or manageties in desirable neighborhoods that promise low
ment team to safeguard investments for the future.
Continued on pg. 17

CashFlow Express Page 6

From NYC & Beyond

How to Invest in Out-of-State Real Estate

by Teresa R. Martin, ESQ.

uying real estate rarely goes smoothly, and buying property outof-state has even more potential challenges. However, its entirely
manageable if the potential trouble areas are planned for and addressed. Many people own property out-of-state, and you can too.

Reasons for Buying Out-of-State Real Estate

There are several reasons why you might consider owning a property in
another state. Maybe local real estate prices are simply too high to qualify
for a loan on a second home or investment property. Perhaps another area of
the country is experiencing a real estate boom. Maybe you have a desire to
own a vacation home.

Potential Challenges
Lack of knowledge about the area and the local economic situation. Everyone knows what areas of their hometown are doing well and which areas
are struggling. Successful real estate investors usually know more about
the area of town in which they invest than the REALTORS do. You wont
have this type of day-to-day knowledge and will have to rely on others for
their advice and opinions. Ensure youre getting your advice from a worthy
source.
You dont know the laws, regulations, property taxes, and other details.
Real estate laws and practices vary from state to state and even from city to

city. Even more challenging, what is written in

the codes and ordinances might not be the actual
practice. Youre going to have to find a way to
gain this knowledge.
You need an out-of-state team. Youre likely
to need a property manager, handyman, real estate agent, and more. Your team
will have a huge impact on the level of success you experience. Build your
team before you buy anything.
Everything is going to cost more. For a non-occupant owner, interest rates,
down payment, and insurance are all higher. The banks simply dont have as
much faith in a property owner that doesnt live in the property.

Things You Must Do

Hire an excellent property manager. If youre going to rent out your property,
keep in mind that an investment rental property is only as good as its management. Its important to find someone that you can trust even when you arent
there. Property management includes making decisions about repairs, filling
vacancies, evictions, and handling any other problems.
See the property before you buy it. While very experienced investors frequently dont, its still a good idea to see the property before you buy it. Until
you have a team you can trust, you dont really know what youre getting
until you see it yourself.
Visit the area. If at all possible, get out to the area and arm yourself with
a local map. Spend a couple of days driving around, getting the lay of the
land, and asking a lot of questions.
Meet a couple of real estate agents
and landowners. Join the local real
estate investors club. Even if youre
buying a vacation home, these are
the people that know the area, trends,
and relevant people. One good friend
in the local club is invaluable. Join
and make a friend.
Owning property out-of-state can
be a wonderful investment from either a financial or enjoyment standpoint.
As with anything else, if you
understand the potential challenges
beforehand and prepare for them,
youre likelihood of success is much
greater. Be sure to get your team in
place and know as much about the
area as you possibly can. Good luck!

or visit www.teresarmartin.com.

Financial coach, Teresa R. Martin,

Esquire, also known as the Wealth
Building Maven, has been financially independent since the age of
35. She is the founder of the Real
Estate Investors Association of NYC
(REIA NYC). An active investor since
the age of 18, she can be contacted
by phone at (646) 467-7370, by
email at tmartin@teresarmartin.com,

Real Estate expert ANDREWCORDLE wants to help

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My passion is helping people nd their purpose.

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No strings attached cash-flow is the goal for all investors, regardless of your tactic.

by Hannah Ash

ts tempting to think of millennial Andrew

Cordle as something of a comeback kid but thats only one part of the story. I caught
Andrew in the middle of what was for him,
a normal work week. We talked from his
front porch at home in Georgia: Hed just
flown in from a speaking engagement in
Colorado and was preparing to fly out to Chicago
the next day. Though his story does involve losing
it all followed by winning it back and then some,
its also about dedication, work ethic and a commitment to success.
Recently back from a twelve day cruise through
French Polynesia with his new wife, Andrew is a
self made man. He comes from a middle-class
background: his mother is a school teacher with
over 23 years of teaching experience and his father is a union worker. Andrew shared with me that
when you look at the stories of the most successful and wealthy families, its always one person in
that family that goes outside the norm and changes
things for generations to come. The week before
we chatted, Andrew had dinner with the vice president of one of the worlds leading retailers, Home
Depot. Clearly, Andrew wants to be that person to
permanently alter the course of his familys future.
Before we go into what hes up to now, lets
take a step back. I mentioned Andrew lost it all.
Like many of us, he was a victim of the economy.
During his first round at bat, Andrew was exclusively a flipper. He was 25 years old, had a staff
of over 20 and a small fortune to his name when
the bottom of the market fell out in 2007. Andrew
found himself with a lot of houses he couldnt liquidate. It changed his life. It changed his approach
to investing.
It does no good to have 20 cars in your garage
if you dont have any gas for them, Andrew reflected. The problem in 2007 was that Andrew had
put all of his eggs in one basket: flipping. Like so
many millennials facing a lean economy, Andrew
ended up living in his parents basement. Unlike so
many in his generation, Andrew did not stay there
for long. Through the power of education, he transformed himself into a success again. This time,
his success is different. He took the lessons hed
learned from his previous successes (and failures)
to build a sustainable career as an investor that now
takes him around the country and the world to share
his wisdom with others.
What was, and is, Andrews secret weapon for
success? What is his vehicle for being that person
in his family who steps outside of the norm and
creates lasting success? Education. As the son of a
dedicated school teacher, its not surprising. Education can save you hundreds of thousands of dol-

Profit

lars and time. One caveat though: the right

education, Andrew tells me.
Andrews approach makes sense. If you
want to be a doctor, dont get a degree in
event planning, the successful investor declares. Though his approach to education is
simple, its refreshing. With so many real estate gurus selling a one-size-fits-all-approach
to success in investing, Andrew does not. He
offers specialized academies that focus on the
strengths and interests investors have coming
into the game.
He offers a four-day course for investors
to learn about his approach to investing - and
to the different techniques available for success. Theres a wide variety of tactics to be
successful in investing. You need to choose
your tactic and go for it, Andrew says. His
four day workshop helps investors to bring a
great sense of focus to their efforts.
When it comes to finding education as an
investor, Andrew takes a firm stance. Many
real estate gurus are teaching techniques they
learned fifteen years ago. That doesnt work.
As markets change, tactics change. For his
part, Andrew participated in over 100 deals
in the last twelve months; over the course of
his career, hes participated in over 1,000. His
investor academies arent taught by guest gurus who want to sell their products; Andrew
personally teaches them with the help of his
wife and staff.
To be successful as an investor, Andrew
says that investors first need to decide what
they want to achieve. Some people want
boats, some people want to quit their day jobs,
some people want to establish trusts. As an
investor, Andrew says, you must know what
you want to achieve. Once you know what
you want, you can then pick a tactic that will
best help you accomplish your goals. Different types of investors want different tactics.
In addition to Andrews four-day Investing
Academy, he offers four highly focused programs: Marketing, Rehabbing, Flipping and
Rental. His marketing academy is geared toward creative types who want to find creative
ways to net deals. Attendees leave with real
world industry marketing know-how, blogs
that are set up for them and turnkey social
media accounts.
The Flipping Academy is for investors who love the art of the deal or need to
strengthen their cashflow before branching
out into other tactics.
Rehabbing is geared toward those investors who want to turn up the volume by doing
more deals and treat investing as more of a
CashFlow Express Page 9

business than an individual skill. The Rental Academy,

Andrew says, is for all investors. No strings attached
cash-flow is the goal for all investors, regardless of your
tactic. Rental properties do just that Aside from educating others, creating true cashflow is Andrews greatest motivation as an investor. Aside from resilience and
determination, that cash-flow is king was the greatest
lesson Andrew learned from the economic downturn.
One of the top skills that Andrew Cordle advocates investors have? Aside from focusing and choosing a tactic, its knowing your market. Andrew shared
with me how just last week he closed on a Victorian in
Atlanta. The wholesaler from whom he purchased the
property didnt know that the Victorian was located in a
top-choice district for a new charter school, making the
property a significantly more lucrative buy. Andrew said
that just by knowing his market, he stands to make many
thousands of dollars off the deal. Theres no get-richquick way to make it in investing, Andrew says. Education. Strategy. Tactics. The ability to bounce back. Andrew says real estate investing is unique, and investors
must be too, Investing is not a 9 to 5. Work hard. Play
hard. Be determined. Be resilient. Make a decision.

Q & A with a Private Lender

by Lori Peebles

unding is the foundation for every real

estate transaction. As an investor, private
lender and CEO of Zinc Financial, Todd
Pigott knows exactly just how important funding is. The Central California-based firm lends
on deals throughout the Golden State as well
as neighboring Arizona and Nevada. To give our
readers insight on the private money industry,
we recently interviewed Pigott so he could give
us his perspective.

nia. A very dated property built in the late 60s,

with virtually no updating since. The ARV for the
SFR came in at $1,100,000, and the borrower
purchased the property for $750,000, and put
down 20%. The borrower expects to spend about
$70,000 on rehab for which ZINC is paying 70%
of the cost. The investor expects to have the work
completed in less than 6 weeks, and have it sold
in less than 60 days. ZINC funded this transaction with complete ease and in less than 10 days.

Question: Hello, Todd, can you tell us about a

recent deal you lent on?
ZINC: Recently, we funded two rental buy & hold
properties in the Sacramento region. Both were
3 bed / 2 bath, in solid urban settings. They were
constructed in the late 80s early 90s, with about
1500 square feet of living space. Each was movein ready with rental quality amenities. The investor purchased them for $147,500 and $169,500
respectively; rental income was solid with a DCR
ratio above 1.25. The real estate investor put
down approximately 22% against the purchase
price. ZINC funded both of these in less than 30
days with a 7.99% 5-year term. The real estate
investor expects to make between $10,000 to
$15,000 per year in net cash flow.

Question: Can you tell us a bit about Zinc

Financial and what type of transactions you
prefer to lend on?
ZINC: We are a California lender. We focus on
fix-and-flip loans and rental quality buy-and-hold
loans. We lend on primarily SFR 1-4 units, but
will consider multifamily on a case by case basis.
We lend in any area of the state, so long as the
property is in a well-known urban setting. We call
it our curbs and gutters criteria, meaning if it
has curbs and gutters there is a high degree of
certainty we will lend on it. We stay away from
land, cabins, extreme rural properties or properties in highly undesirable areas. We are very aggressive on our rates with our California Investors, and we are able to close our loans in 7-10
days because we are a direct lender with our own
capital; we are not a broker.

Question: What are some of your favorite areas to lend on and why?
ZINC: We just funded another great fix-and-flip
in the San Rafael area, up in Northern Califor-

Question: In your opinion, how is the California market doing?

ZINC: It is a great time to purchase and fix-andflip in California. Property values have stabilized,

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Continued on pg.,19

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by Mark Hanf

Attract Private Funds for Deals:

The Investor Questions

s someone who has attracted hundreds

of private lenders to my real estate and
lending practice since the real estate
crash, I learned that one of the keys
to finding private lenders is to always
make it about them, and not you. Most people promote themselves. Promotion is about you. Attraction,
on the other hand, is when you make your pitch about
the other person. Key to forming a successful business relationship is a sincere focus on what is in the
best interest of your prospective partner. This is especially true in attracting private money. When you
demonstrate that you have the best interest of your
prospective money partner at heart, and that your sincere goal is to help your prospective private lender
make a great return on their money without taking
unnecessary risk, you become extremely attractive.
By focusing on the needs, goals and concerns of your
prospective money partner you will create a loyal client for life, and one who will refer you to others who
might also benefit from your good work.
There are five basic questions that every prospective private lender is going to want to know. Your
presentationyour credibility and opportunity packageshould clearly answer all five of these with
clarity and completeness. Here they are:
1. What is the opportunity?
2. How much money do you need?
3. How much can I make?
4. When do I get my money back?
5. What happens if you get hit by a bus?

1. What is the opportunity?

Im in contract to purchase a 3-bedroom, 2-bath single-family home in a popular middle-class neighborhood. The property hasnt been remodeled in years,
and were getting it at a great discount. Well remodeled homes in this neighborhood are selling on average for $300 per square foot, and the average dayson-market is less than 30 days.
That is an example of a well-articulated and simple description of an opportunity that could be delivered like a 30-second elevator pitch at a networking
event attended by people with money. Its short and
to the point, and it demonstrates your knowledge of
the market. But answering this question in the mind
of your prospective private lender goes far beyond
the specific deal. In developing your answer to this
first question, your lender is going to want to know
things such as:

Who are you?

What is your background?
What is your real estate experience?
Can I see examples of your previous work?
How well did it go before?
Providing your background, history and experience
lays the foundation of your credibility, and answers
the silent question, Why should I listen to you?

2. How much money

do you need?
Answering this question involves your detailed budget for the opportunity. You also might present more
than one scenario for how your prospective money
partner can be involved. There are many ways to
structure the way they might participate. Is it a loan?
Is it an equity investment? Will you be using other
capital in addition to your private lender? Are you
putting some of your own money in? Will you be using leverage (hard money)? While you dont want to
over-complicate or overwhelm a prospective lender
with too many choices, understanding that there are
many ways to structure a deal will help you to adjust
your parameters based on a specific lenders preferences and comfort level.

3. How much can I make?

How much you offer to pay your private lender will
normally depend on a number of variables, including
whether you offer collateral in the form of a mortgage
or deed of trust on the subject property or if you offer
an equity membership in an LLC formed to acquire
the property. Will you be offering payment in the form
of a loan (interest) or will you be sharing the profit (or

both)? If you are sharing the profit, what is the split?

In answering this question completely, you should include both a best case and worst case scenario.

4. When do I get
my money back?
If you are planning to buy, fix and flip a property, then
your exit strategy how you will repay your private
lender is fairly straightforward. You will pay him
back at close of escrow when the property is sold.
What if you want to propose that your partner invests
in more than one project at a time, or re-invest his
profits from one project into another? What if your
plan is to acquire rental property to hold long term?
Part of your budget should include a timetable
that, like above, has a best case and worst case scenario. Showing that you have considered that the
unexpected might happen makes you look more professional. Also, keep in mind that its always better
to under-promise and over-deliver and the other way
around.

5. What happens if you

get hit by a bus?
While you want to have a plan in place in the event
that you do in fact get hit by a bus, the bigger point
of this question is to address the concern about what
happens if things go wrong. What are the risks? What
safety and security features have you built in to your
business model? What protections are you proposing
to prevent or to reduce the prospect of a loss to your
investors principal? This is the area that many real
estate investors either skip or downplay. Addressing
up front these issues actually makes you look professional and shows that you have considered all possibilities and have planned for them. Optimism is
important, but appearing to have blind optimism can
work against your goals.
These five basic questions present a foundation
of an effective presentation that will weave together
your story, the opportunity, and your promise in a
way that impresses, creates confidence and that will
attract capital to you in a big way.
Mark Hanf is president of Pacific Private Money
Inc., a California-based hard-money lender who
has raised over $150 million in private capital since
2009. His eBook, Insiders Guide to Attracting Private Money, is available at www.AttractingPrivateMoney.com.

Realty411Academy.com
Learn from the Top Real Estate Educators in the Country in the
Convenience of Your Own Home. Our interactive learning portal
will give you the tools you need to succeed. Visit us today.
CashFlow Express Page 12

ave you always dreamed about owning your own piece of paradise, a
place where you could hike, hunt,
ranch, camp, horseback ride, or just
relax to your hearts content in the
middle of beautiful, isolated scenery? Or are you
interested in making a sound, safe, and affordable
real estate investment in a prime location? What
about both at the same time, in a place where the
folks are friendly and the landscape is postcard
perfect? Property in Texas offers all of this at once,
and so much more. Texas is the perfect getaway
location, with something for everyone. The wideopen countryside offers dramatic views the likes of
which you cannot find anywhere
else, with stunning landscapes
and a sky so big and blue you
have to see it to believe it. Locations this scenic and pristine
are usually only found in state
and national parks, but here in
Texas you have the chance of a
lifetime to actually own a part of
the panorama.

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or the outdoorsman,
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private property, and if you are
a hunter or nature watcher, then
get ready for a range of exciting game: deer, elk, wild sheep
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call Texas home, among other
wildlife. What could be better
than waking up every morning
with the knowledge that the
game youve always wanted
a shot at might be just outside
your door? Of course, if youd
rather just sit back and enjoy
the view, theres nothing quite
like a Texas sunset from the
back porch of your very own
cabin, or stargazing from your
own private campground after
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possibilities are endless: anything from tent camping to setting up an RV site to building
the cabin of your dreams can
be easily accomplished, and at
a fraction of the cost of doing
so anywhere else. What could
be more satisfying than having
a log cabin built to your exact specifications, on a
piece of property straight out of a classic Western
movie? In Texas, this isnt just a daydream, its a
way of life. Buying and developing land in Texas
can mean returning to a simpler way of life, a
laid-back lifestyle far removed from the modern
rat race, but it can also be a great investment in
of itself. Locations this gorgeous and affordable
never last very long, and picking up a plot before
they are all gone is about as sensible an investment as you can make there is a good reason
professional real estate speculators love Texas
land, and try to snap it up as soon as it becomes
available. For anyone looking to buy property,
there is obviously no better choice than a plot of
prime Texas real estate, and if you want prime
Texas real estate, there is no better choice than
Blue Quail, offered exclusively by Texas Ranch
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Call 1-800-843-7537 or visit online at: www.
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Learn the Money-Making

Art of Flipping Houses...
aHow to find great investment properties
aTips to manage contractors

aEstimate repair and building upgrades

aHow to never overpay for repairs
aWhich upgrades provide the best return
aFactors that determine if a property will

S ON!
HAND

qualify for FHA financing

aInspect properties with confidence

aDevelop a real estate investment team
aAnalyze a rehab project and learn to
prevent over-spending

aHow to avoid pitfalls & more...

www.FlippingHousesBusTour.com

by Hannah Ash

eal estate investing, more often than

not, is a solo activity. That being said,
you just cant learn it all from books
and you cant do it all without help
from others. Co-workers, or people to
provide support, a listening ear and
to help with some of the work, can be hard to find in
this industry. Without online, print and community
resources, many of us investors would be on our own
as we try to navigate through the industrys somewhat choppy waters. Those who are new to investment often find themselves with too many books
and too few human interactions. Joint ventures are,
therefore, common in the real estate industry and are
a natural way for serious investors to find co-workers, support and greater successes.
We found two business partners who. though they
live far apart, are breaking the mold; their combined
experiences and investment talent bridge the distance, making it possible for them to craft successful
deal after successful deal. Partners Anthony Patrick
and Duncan Wierman believe that when it comes to
creating wealth, distance is just distance - nothing
more. They each bring a different set of top skills to
the investment table (or, in their case, bus), combining their talents to lead others safely through a very
profitable (and, on the flipside, very risky) world of
real estate investments. Their joint education venture
is the Flipping Houses Tour Bus, and it stands apart
as a truly creative way to get new investors to close
the books and enter the investment lab where they
can really start applying some of the principles
theyve learned. When the rare opportunity to meet
up with these two very busy investors popped up, I
had to bite. I wanted to learn first-hand about their
latest venture and, of course, to get an inside look
at how these tycoons land deal after deal in one of
the most competitive markets in the world: Southern
California.
We explored their innovative approach to taking investing concepts out of the books and theory
and into real-world applications: Flipping Houses
Bus Tours. Its a time to close the books and hit the
streets. On the tour, Anthony and Duncan are expert
hosts that break down just what they do and why:
their methods, their reasons, the key strategies they
employ to get the impressive results they continue to
yield.

The Investment Lab:

Hands-On Learning with
Anthony Patrick & Duncan Wierman

Because Anthony and Duncan realize that action learning

is longtime learning, they have
you participate in the process
while they watch alongside you
and guide you toward a decision
making strategy you can use
time and time again. Anthony
commented, We are confident
that when you leave us at the end
of the workshop that you can
duplicate what we taught you to
do, so you can create financial
success in your life. Its an exclusive opportunity for investors
who have been there, done there
and are tired of reading the same
FSBOs (for sale by owner) and out-of-state owned homes in
books and listening to the same CDS over and over again; which vacancies and repairs are starting to cause real hassles
for owners who are likely considering a way out. Anthony
its for, Duncan says, those who are ready to finally take
also adds, Probate is our niche.
action and learn hands on from people who do this

every day. What, exactly, do these two savvy investors do? Where
do they fish for their amazing deals? Is it foreclosures, short
What were the driving forces that brought Anthony
sales, auctions, or what? Anthony explains, REOs, Short
and Duncan to the same literal, and metaphorical, bus?
Sales, FSBOs, deals on the MLS and internet leads. What, I
According to Anthony, between the both of us, Duncan
want to know, do Anthony and Duncans students walk away
and I have over 25 years of experience in the art of inwith after completing a training program? Are they experts
vesting. From marketing, deal evaluation, rehabbing, and
in everything - or is it more of a survey course?

most of all, giving the most value and knowledge for our
Duncan shakes his head and explains, This is a true,
students. There isnt anything these two guys havent
hands-on and step-by-step experience. There is no better
done - and well. As Duncan succinctly put it, because
way to learn than having us and our power team there to
of our success in this business, we have decided to join
hold your hand every step of the way. Students in Duncan
forces to teach people hands-on instead of theory.
and Anthonys workshops preview deals, are introduced
What do Duncan and Anthonys students learn from
to projects the two have already run the numbers on, and
Duncan and Anthony? Simple strategies that yield big
then are taught those little tricks all of us, in any profession,
ROIs. For example, Anthony says, we look for belowknow that can make or break our success. Students learn
market homes on the MLS because if we dont, we could
how to find coveted hidden deals on the web and how to find
miss out on a gem homes with opportunities to create
motivated seller leads with internet marketing methodolotheir highest and best use. Most investors arent doing
gies.
I asked Anthony to give us a run-down and overview on
this simple search! They know where to find motivated
sellers: they teach students to target those much coveted

Be Sure to Read

Co-published by Realty411

REI Wealth Monthly

REIWealthMag.com
CashFlow Express Page 15

Continued on pg. 19

Business Inc.
Take the Next Step in Growing Your Venture by Making It Official
Nothing says you mean business more than the right entity structure,
it may also help to reduce income taxes & shield personal assets.

Incorporating:
Entity Selection

f you decide to incorporate,

an important decision youll
need to make is which entity
to select for your business.
Generally, your choices are
C-Corporation, S-Corporation, or
LLC. Each entity has its upsides
and downsides. The selection of the
entity is determined based upon the
business activity and the individuals
goals. An understanding of the key
differences between the three typical
entities should help in this decision
making process.
C-Corporations are unique in that
they are taxed on the corporate
level. This means, if any net profit
is reflected on the corporate level,

tax will be assessed based upon the

taxable income. Furthermore, no
self-employment tax is reflected on
the corporate level. Additionally, CCorporations can adopt a fiscal year
end that allows the corporation to
operate on a 12 month cycle that does
not end in December, which is typical for most entities. C-Corporations
also have the ability to deduct medical
expenses as a line-item deduction.
S-Corporations differ from C-Corporations in that they are considered flow-through entities. This
means, the profit or loss generated on
the corporate level is passed back to
the Shareholders of the corporation,
based upon their percentage of ownership, where the profit or loss is reflected on the shareholders personal
tax return. Secondly, S-Corporations
are exempt from self-employment tax.
The caveat is, Officers of S-Corpora-

tions must be reasonably compensated as employee of the company.

Therefore, a W2, subject to payroll
tax, must be issued from the corporation to its officers to remain in compliance. Reasonable compensation
has been established through court
cases as approximately 40% of the net
revenue generated by the corporation.
LLCs (Limited Liability Company)
are similar to S-Corporations in
that they are flow-through entities. Where they differ is treatment
of net profit. Shareholders of LLCs
that are considered general partners
are subject to self-employment tax on
100% of the ordinary income generated by the business. Additionally,
in order to file a separate tax return
as a partnership, an LLC must have
2 or more members. If this requirement is not met, the LLC is considered a disregarded entity, meaning,

its business activity would be

filed on the shareholders personal
tax return as a Schedule C, like a
sole-proprietorship. That said, the
single-member LLC is a glorified
Schedule C, with the addition of
limited liability.
When coming to the decision of
which entity fits best, it is highly
recommended to consult a tax professional to assist in this decision.
If the proper entity is selected
from the beginning, the transition from sole-proprietorship is
a smooth and easy one. One key
component each entity has in common are filing fees. California
will assess a filing fee of $800 per
year until the entity is dissolved.
It is therefore, advisable to set up
an entity when one intends to use
it. This can otherwise become a
very costly thing, unnecessarily.

Taxes Management Liability

Limited Liability Co.

Limited Partnership

S Corporation

C Corporation

All managers and members (owners)

of a limited liability company have limited liability (up to amount invested).

All managers and members (owners) of a limited liability company

have limited liability (up to amount
invested).

Stockholders have limited liability; officers and directors

can be held personally liable
for some corporation obligations.

Stockholders have limited liability; officers and directors

can be held personally liable
for some corporation obligations.

Management decisions in
an S Corporation are usually made by the officers and
directors of the corporation.

Management decisions in a
C Corporation are usually
made by the officers and
directors of the corporation.

S Corporations are not required to pay income taxes.

Each shareholder must report their pro rata share of
income, whether distributed
or not.

C corporations must pay

income taxes on any gain
or profit. If money is distributed in the form of
dividends, the shareholder
must pay a second tax.

Decisions in a limited-liability company

may be made either by the managers,
members, or both, depending upon the
provisions outlined in the Operating
Agreement.
LLCs are not required to pay income
taxes. The members must report their
pro rata share of income, whether it
is distributed or not. However, an LLC
may elect to be taxed as a corporation.
EDITORIAL COURTESY OF:
ROBERT HALL AND ASSOCIATES

All management decisions involving limited partnerships are made

by the general partners. Limited
partners who become engaged
in management could become
personally liable for partnership
obligations.
Limited partnerships are not required to pay income taxes. Each
member must report their pro rata
share of income, whether distributed or not.

Fuquan Bilal
Managing Partner

Office 973-855-4922
Cell 862-226-0967
Fax 888-958-6816

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Property Management Tips from PamTexas.com, pg. 6

vacancy rates and values poised to appreciate over

time. Factors such as transportation, schools with
great academics or sports (a consideration in Texas)
programs, and higher than average monthly incomes
are part of what Pams team looks for. An excellent
property manager has your best interests in mind and
will be able to guide you toward great buys that help
you grow your portfolio over time.
Your Property Manager Saves You Money
Property managers can keep money in your wallet.
Property managers are in the position to find small
problems before they - literally - explode. For example, a highly-trained management team like Pams
can drive up to a property and spot a duct issue before
it backs up and causes a more expensive problem to
develop. When work is needed, fantastic property
managers work with fantastic vendors who do great
work for great prices.
Your Property Manager: Your Eyes & Ears
Texas, Pam notes, has a great market and is very landlord friendly: as a result, she has a lot of out-of-state
investors under her fold. Long-distance investors simply cant walk their properties and perform interior
inspections; your property manager needs to be your
eyes and ears. Pams team walks each property on a
monthly basis and performs an exterior inspection;
interior inspections are conducted twice a year.
Your Property Manager Communicates Well
Great property managers know how to keep their
clients in the loop. Pams team prepares and sends
clients monthly reports that include detailed financials, relevant photos, market reports and expenses to
keep them on top of the latest with their property or
properties. Investors deserve to know whats going
on with their investments, Pam says.
Your Property Manager Keeps Your Property
Rented
Property managers know how to find credit-worthy
tenants - and they have a process for doing so. Beyond finding credit-worthy tenants, property managers should begin marketing an apartment as soon as
they find out it will be available - not once its empty.
Reducing vacancy rates is a key part of the job, Pam
says - and her team works hard to make sure their
properties are rented. Beyond ensuring a property is
rented, property managers need to keep abreast of the
current market changes and make recommendations
for rent increases when appropriate.
An investor herself (Pam is currently working
toward building her childrens trust), Pam knows
what investors need and deserve from their property
management team. Her company, Professional Asset
Management and Sales, offers investors a full-service
experience. Pam Blanco doesnt want to put her name
behind managing a property she doesnt think is a
good value - so she has a team of researchers on the
case.
The research arm of Professional Asset Management and Sales scouts out the best properties in
neighborhoods that offer tenants the amenities they
want (i.e: schools, transportation) and gives investors
the stability they crave. Pams proactive management team walks every single property they care for
every single month. A quick glimpse at her companys
website reveals a multi-channel approach to property
management: PamTexas.com has everything from
featured listings and utility info to online rent payment processing. Systems for management are what
sets a great property manager apart from a good one.
Systems should be in place, Pam implies, for everything from finding new properties for her investors to
finding new tenants. Clearly, Pam Blanco has systems
in place that are blazing a new path for other property
managers to follow.

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CashFlow Express Page 17

by John Pribble

Attracting
Private
Money
Lenders

ust a few short years ago,

many real estate investors
were unaware of private
money.

More recently, private money has become familiar in almost all real estate investor circles.
Private lenders can be a great source of business growth. Unfortunately, there is currently a
lack of good quality information about private
lending, which is why I wrote a book about it.
Lets first clarify what I refer to as private
money. Private money is monies that you acquire from any private individual. Private money is not institutional money, hard money, or
money from a lender that is in the business of
lending money. Private money lenders (PMLs)
are individuals that have the funds available to
invest in any vehicle they see fit, and they often
find that vehicle to be you and your real estate
portfolio.
No matter your exit strategy - flipping, buy
and rent, owner finance private money can
help you create lasting wealth. Arrangements
can be structured for financing only or equity
shares. Sometimes a combination of both can
be beneficial. For example, lets say your PML
will loan you one million dollars to buy rental
properties, but they want some equity. Perhaps
you would find it favorable to pay your PML a
7% note rate and give them 50% of the equity
above purchase price and make ready costs. In
return, you would collect a management fee to
manage the properties and also benefit from all
the earned equity from principle payments as
well as 50% equity above purchase price and
make ready costs.
Attracting private money involves much
more than telling someone that you can give
him or her a certain return on a safe investment
in real estate. Its more about you and how you
conduct your business, structuring what you do
in a way that is inviting to others. PMLs want
to do business with someone that they trust,
have confidence in, believe in, and enjoy working with.
You do need to be an expert in your business
and your field of practice. Whether you plan to
flip or buy-and-hold rentals, you need to know
the questions to ask about the properties you
look at. Property analysis is extremely important to PMLs, and you should have a way to
analyze every deal from multiple exit strategies
so that you are comparing each deal as similarly
as possible. Its up to you to know the property
values in your area and understand how to pull
accurate comparable sales and leased properties. Know the rehab costs of projects in different price ranges and exit strategies. Understand

how to efficiently hire and work with contractors. People and property management skills are
important, as is keeping all that you are doing as
organized as possible.
Practicing profitable habits is important to attracting PMLs and their money. To maintain your
business acumen you should be in a constant state
of education. The more you know, the better you
can communicate, and the better you can communicate, the more money you can raise. There
are plenty of real estate topics to choose from on
Amazon, you can go to seminars, attend investor club meetings, and even view webinars from
your home office. Take some time to learn about
personalities and communication styles. Be the
realistic optimist, plan for the worst but hope for
the best.
PMLs want to work with someone that is
working hard to build their business and willing to
do what it takes to succeed, even when it requires
a great deal of discipline or restraint. Handle your
business professionally and in a timely manner.
Do what you said you would do, and do it on time.
You should be out beating the trees and shaking
the bushes to see what pops out. By doing so you
will create activity and get the attention of PMLs.
Producing income will make you attractive to
PMLs though it is not a requirement. Whether
you have a full-time job or income from your current real estate business, use that to your advantage when talking to potential PMLs. Producing
income shows the stability of your business and is
a testimony to your expertise. When starting out,
the quickest way to produce income in your real
estate investment business is to start wholesaling.
Not only does this provide you with income, but it
will help you to become familiar with the market
and values, which all makes you more attractive to
PMLs.
Targeting high-wealth PMLs will be most
beneficial. High-wealth PMLs are those that you
believe have the funds to invest one million dollars with you. The fewer PMLs you work with
the easier it will be to operate your business. In
your pursuit of high-wealth PMLs, you will find
others with smaller sums that want to invest and
you should be happy to oblige. Small sums can
come in handy to use as second liens when you
are financing your first lien with a bank.
No marketing is required to get all the private
money you need, only networking. Start with
your sphere of influence and the people you know.
Tell them how great real estate is going for you
and how you have individuals loaning you money
and earning them 10%. Invite one PML prospect
to lunch every week, and you will find private
money. It may take 6-12 months, but nothing
worth having comes easy. Dont expect to get a
CashFlow Express Page 18

John started his real estate career in 1999

at the age of 19. In 2000, John got his
real estate license and today is a real estate broker. He has practiced many different strategies in his real estate business
depending on market conditions. John
has experience in wholesaling, rehabbing,
subject-to, owner finance, rentals, short
sales, foreclosures, brokerage and client representation, property management,
and working with banks and private money
lenders. When his rehabbing business began to grow John found it beneficial to utilize private money. As the market changed
he shifted to more of a buy-and-hold strategy buying rental properties. Private money
and local bank financing became a great
resource as he accumulated more properties. John has learned many important lessons from working with private lenders and
their funds in his business. A great deal of
effort has gone into marketing, lead tracking, management, and developing systems
for a smooth and successful operation.
He also works to maintain a balanced life,
remaining focused on family, friends, and
enjoying life through activities such as networking with others, climbing mountains,
and spiritual growth.
For more information, visit:
www.johnpribble.com/about-john

firm commitment but if they seem interested

begin sending them properties that you plan to
acquire. It is a good idea to have a presentation
manual that you can show or email to prospective PMLs that discusses you, your business,
and how you structure your loans. Include a
short video showcasing a few of your best projects in different price ranges. You should also
take the time to understand estate planning, tax
implications, and finance. High-wealth PMLs
have a good understanding of those topics as
they work to preserve their estate.
Private money lenders are people from
all walks of life. They are often humble and
conservative, past their years of working long
hours, and enjoy putting their money to work
for them. PMLs working with real estate investors are a rare instance where two individuals
in different stages of life can help each other
achieve their goals in an incredible way, bringing forth a profitable business and personal
relationship.

Q & A with Zinc Financial, pg. 10

Hands-On Learning with Anthony and Duncan, pg. 15

coming out of its worst recession and values continuing to rise, this is an absolutely great time to fix and
flip your next deal with ZINC
Financial.

how a typical tour with goes. He explained its run like a lab, chock
full of real-world applications. On our tour you can expect to learn
how to set up your team, how to find and work with a REALTOR.
You will discover how to find a deal, how to find comparable properties. We will explain the ARV (After Repair Value) and figure out if a
property is a fix and flip or a buy and hold. We will talk about wholesaling as an exit strategy for the deals you pass on. The whole class
also visits a local Home Depot store and we go over materials needed
for a typical rehab. Its a jam-packed tour because we also visit numerous houses: one under construction, one in the middle of construction, and a finished home in escrow. We also see a couple of deals that
we have yet to see ourselves and go over them with our students. We
teach what to look for and whether an offer should be made or not.
Lastly, we wrap it all up from start to finish and go over how we can
get deals accepted.
Duncan and Anthony are clearly more motivated by their love of
real estate than of wanting to turn education into a big business - they
keep course registration fees refreshingly low - with a three-day tour
only costing only $197 for everything. As theyre usually busy making

Question: Can you describe a profile of who

your ideal investor client
is?
ZINC: Most of our borrowers
are entry-level or moderatelevel real estate investors.
Most are knowledgeable in
real estate investing, and
they are very well informed
in the community where
they live. Most have at least
some exposure to real estate or construction and
they all have some money
to work with. ZINC requires
a down payment of at least
15% so having some capital
to work with is a must. ZINC
typically shies away from
the true novice who has not
done significant homework
on this trade, or whose
complete exposure to this
segment is a weekend guru
seminar on how to get rich
quick. So, if you have some
exposure to this field, have
some working capital, we at
ZINC are ready to partner
with you on your next fixand-flip or rental property
transaction.
Question: What are your
companys
goals
for
2014?
ZINC: Currently ZINC is
considered a boutique lender for fix-and-flip financing.
Our goal is to provide reliable, quick and easy funding for our investors. Reliability is key, as investors
rely on this capital to fund
their deal when they just
placed a non-refundable
deposit. Quick funding is
important, because owners
of distressed properties will
not wait months for funding, and finally, ease is important, as we do not mandate all of the strict lending
guidelines required by most
banks.
ZINC is the
premier lender for fix-andflip and rental buy -andhold properties located in
California or Arizona. We
can fund loans with our own
capital in less than 10 days.
Our service sets us apart;
we are reliable, quick and
easy for our funding process. Contact us today at
559 326 2509 or visit us on
the web at zincfinancial.net.
Lastly mention coupon
code
REALTY411
for
$750.00 off your next loan,
expires in 30 days.

deals for their own portfolios, these workshops dont happen all
that often. Duncan comments, We host them only three times a
year, and we do limit the number of people who can participate
because we want to really give personal attention.
The results students take home of working with these two pros
at the top of their game? Anthony says the proof is in the pudding.
Students, they say, will be ready to do their own rehabs after the
tour - or whatever else they want to try. Anthony explains, This
is a step-by-step event with a simple road map for each person
who wants to learn not just rehabs but everything in real estate.
Their coaching students can use them, and their power team, for
future deals if they choose to. We want our coaching students
to use our power team so they can get a deal done fast. Our track
record is phenomenal, nearly 80% of students have a deal in their
first 60 to 90 days!
Duncan and Anthony want to help
others find some of the success they have, doing what they love.
A love of the craft of investing is what motivates these two proven
investors.

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CashFlow Express Page 19

Ca$hFlow Resources

FirstKey Lending Offers Unique Options, pg. 1

The publication is available on their home page

http://Realty411guide.com
NEW: Breaking Mortgage News
Reiff broke the news of this exciting new mortgage product for Realty411 readers in our interview
FirstKey is now offering an acquisition-bridge
loan product designed to enable the acquisition,
rehab and renting of single-family rental portfolios.
Buy-and-hold investors can use these loans to
acquire distressed property, renovate and roll performing rentals into attractive long-term permanent
financing with only one set of closing documents.
Besides perhaps being one of the most enticing
loan programs to come to market in this space, Reiff
points to the specific benefits of flexibility, efficiency and cost savings of this type of loan, which
preserves profit and gives investors an edge in the
market.

Randy Reiff, CEO

of FirstKey Lending

Have a
GREAT Day!

CashFlow Express Page 21

Ingenious Loans for

Smart Investors
FirstKey clearly offers some progressive financing
solutions, positioning the lender as the vanguard of
the new mortgage capital landscape.
Still, Reiff says innovation is in the blood of FirstKey, which is committed to constantly optimizing its
current products and creating new programs to meet
the needs of its customers. Entrepreneurial borrowers value flexibility, whether they own five properties or 5,000, he said. We are proud to be a market
leader in tailoring products to their unique needs.
We recognize the importance of excellent service
and are highly focused on delivering just that. Its
not enough to simply offer debt solutions. We also
need to ensure that our customers are comfortable
with the process and can choose a product that is
best suited to their needs.
Surely there will be more to come. Want to know
what FirstKey can do for you? Check them out
online, or, Reiff suggests, Bring us your portfolio,
and let us help evaluate your options.

Have you
ever done
business
with this
guy?
Yeah, hes the lender who promises low rates and terms, but never closes your deal. Hes also the guy who
asks for upfront money just to "look" at a deal, but doesn't return a phone call. You know, the guy who promises
everything, but never delivers. Avoid having to deal with this guy by establishing relationships with reputable
lenders, industry service providers and experienced brokers. A solid network is key to finding success in our industry. You have to know who to calland for which deal. Make these powerful connections by joining us at
Pitbulls 33rd National Hard Money Conference and maybe, just maybe you will never have to do business with
this guy again.

Pitbulls 33rd National

Hard Money Conference

Thursday June 5, 2014

The M Resort in Las Vegas

See why industry experts say this is

the No. 1 hard money conference in the country!

Register Today!

A one day event delivering powerful information on:

Register online at

Learn how to avoid the most common mistakes made by brokers and investors.

Meet and network with both the established and new players in the market.

Ask questions of our panel of experts. Find new funding sources.

Continental breakfast in the morning and cocktail reception in the evening.

www.pitbullconference.com
Questions? Just give us a call at

858.736.7788

4 Issues for $19

realty411guide.com/subscribe
Realty411 began in 2007 and was founded by a real
estate sales agent in California who referred millions
of dollars in referral business to brokers around the
country. Subscribe today! You may also call us anytime
for a referral, question, comment or concern. We are
here for you: 805.693.1497

anchor loans

CashFlow Express Page 23

Join Us at Our National Expos

TOP, Left to right/clockwise: Scenes from

our recent live events around the country,
including: New York City, Phoenix, Santa
Barbara, San Jose and San Diego! Hope to
see you soon as well.

Left to right/clockwise: The Real Wealth Network Team in San Jose, Calif.; Real estate industry leader Kent Clothier delivers an opening
speech at the San Diego Real Estate Expo; Mark Thomas, Reesio, founder and CEO, gives our events a thumbs up! Carl Schiovone and his
wife Eilene of the East Coast Real Estate Investors Association. Left to bottom right: HomeVestors is always popular crowd pleaser; Chris
Gleason from MMG Capital; Kevin Rollings shares tips on self storage; A packed house at our first expo in Pismo Beach, Calif. Our events
are FREE, our mission is to provide valuable resources. Join our network to be invited to our events: Realty411Guide.com/network

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Lawfully Avoid
CAPITAL Gains
T

by Jay Butler

he Equity Recovery Program works for

you and not the bankers! Holding real
property in your individual name provides
no asset protection whatsoever and, upon
selling the property, causes you to pay
the maximum amount in capital gains tax and state
taxes. Plus, most real estate business deductions
are not deductible for an individual filing a 1040
tax return. Your silent partner (the Internal Revenue
Service) will love being in business with you as they
take 30% to 40% of your hard-earned money from
the sale of your property in taxes. Sadly this is the
reality for over 50% of all escrows in the United
States, but it doesnt have to be that way for you. By
employing the Internal Revenue Code (IRC) Section

income tax bracket you fall under.

0% if in the 10% or 15% tax brackets
15% if in the 25%, 28%, 33%, or 35%
tax brackets
20% if in the 39.6% tax bracket
In both short-term and long-term capital gains tax
cases, there are no allowable deductions that you may
take in order to reduce your personal capital gains
tax liability other than capital improvements and selling expenses such as commissions, closing costs and
inspections. Please note that short and long term capital gains taxes do not apply to any C Corporation or
LLC filing an 1120 tax return. The gains from such
a sale are considered ordinary business income if the
said entity is in the real estate business.

Before selling a property, be

sure to plan ahead to avoid
capital gains taxes. Leave
more profit in your pocket
with these simple steps.
Ordinary Income
Ordinary income is the income generated during the
ordinary course of a companys business activities.
For example, a new car dealership purchases cars
to sell. The Internal Revenue Code considers these
cars inventory. When a car is sold, the income derived from the sale is commingled with the income
derived from servicing the cars and the parts the
dealership sells for the cars. This income is never
considered capital gains. This is a very important
concept to understand as its application is equivalent to that of business whose business purpose is
the purchasing and selling of real estate.
Should the corporation not have enough writeoffs to eliminate its taxable income all together,
the corporation would be required to pay taxes on
the net amount remaining at the end of the tax year,
if any. In other words, should the corporation not
spend all its income on allowable business expenses by the end of its fiscal calendar year, the remaining net taxable income would be taxed at the
corporate level. It is important to remember
that C Corporations invariably pay less in
taxes than do individuals filing a 1040, LLCs
filing a 1065 or S Corporations filing an
1120-S on incomes up to $250,000.

IRS Code Section 351 states that no gain or

loss is recognized by either the contributing
shareholder or the recipient Corporation if
three conditions are satisfied.
351-Transfer when selling your property, you can
legitimately eliminate state tax and federal capital
gains taxes. Our nationally recognized (and patent
pending) Equity Recovery Program increases your
net earnings from the sale of a property by more than
15% to 20%.
Short-Term Capital Gains Tax
Properties held for 365 days or less are considered
short-term and are taxed at your ordinary 1040
income tax rate if the property is owned in your personal name or an entity that is a pass-through entity
such as an S Corp, LLC (filing a 1065), LP or Sole
Proprietorship. Taxes are paid at the 1040 tax rate on
those gains of anywhere from 10% to 39.6% for the
year 2013.
This could be a real killer should your taxable
gain, plus any other 1040 income, push you into the
higher tax brackets.
Long-Term Capital Gains Tax
The following tax levels are known as long-term
capital gains and apply to property that you hold for
more than 365 days (more than one year). Long-term
capital gains tax rates depend on which ordinary

IRC Section 351

The Internal Revenue Code, Section 351 was instituted in 1921 and can be found under Title 26, Subtitle
A, Chapter 1, Subchapter C, Part III, Section 351.
It wasnt widely used until Congress provided relief
from its previously burdensome provisions in the
Miscellaneous Trade and Technical Corrections Act
of 1999, which for the first time allowed 351 transfers
that included liabilities such as a mortgage. Before
that date, 351 transfers could only be undertaken with
unencumbered (or fully-paid) properties.
351 Transfers
The government will assist people interested in venturing into business for themselves by allowing them
to utilize previously owned assets to fund their new
business venture. The IRC refers to this as a capital
contribution. The IRC further states categorically that
in order for a transfer of real estate to a corporation to
be tax-free, there must be a verifiable business reason
for the transfer. Source of funding, necessary to undertake business, is in large part based upon the entitys
business purpose such as the acquisition and selling
of real estate.
The Equity Recovery Program is a process whereby
a C Corporation is specially drafted for the property
owner to exchange the basis of the property for the
stock of the corporation. Once transferred, the stock
becomes valued at the same basis that the property
was valued prior to the transfer. When the corporation
sells the property, the code considers the income as
ordinary income of the corporation and not as a capital
gain of the corporation. Thus, the Equity Recovery
Program (which utilizes a 351 transfer) eliminates
federal capital gains taxes when the property is sold.
And, by having formed the corporation in a tax-free
jurisdiction such as Nevada, the property owner can
eliminate state taxes as well.

351 Transfer Requirements

IRS Code Section 351 states that no gain or
loss is recognized by either the contributing shareholder or the recipient Corporation
if three conditions are satisfied. Assuming that the
transfers having a bona fide business purpose in
real estate, the said conditions are:
1.) There is a transfer of property (and not services)
2.) Solely in exchange for corporate stock, and
3.) After the exchange the contributing
shareholder(s) is (are) in control of the corporation (i.e. own at least 80% of the voting and
outstanding stock).

Contributions by several shareholders may be aggregated in determining if the 80% test is satisfied,
provided that all contributions were part of a single
integrated transaction to form the business. Note
that contributions of cash or property in return for
long-term debt (e.g., bonds) do not qualify for a
Section 351 transfer treatment.
No gain or loss shall be recognized if property
is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person
or persons are in control of the corporation.!
IRS Regulation 1.351-1(a)(1)
If all Section 351 conditions are met, the transaction is treated as though nothing happened in
that no gain or loss is recognized. The basis of the
shareholders stock equals the basis of the property
contributed, and the basis of the property to the corporation equals the contributing shareholders basis.
Please contact our offices for more information on
the Equity Recovery Program and to schedule a
private consultation and learn how to lawfully avoid
paying any capital gains tax on the sale of your next
property, http://AssetProtectionServices.com

Lawfully Avoid
Capital Gains Tax
State Tax and
Self-Employment Tax
While Receiving
15% to 20% More on the
Sale of Your Properties!

Damian Barton
President

Jay Butler
Managing Director

Dr. Robert Hagopian

Chief Executive Ofcer

Mobile: (702) 425-4143

Skype: RocketFizz
Damian@AssetProtectionServices.com

Mobile: (702) 997-3260

Skype: AssetProtectionServices
info@AssetProtectionServices.com

Mobile: (702) 430-9550

Skype: Robert.Hagopian
Robert@AssetProtectionServices.com

AssetProtectionServices.com

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