Author Archive

Change of mindset

Jun 24 | by | Mindset, REIC Insider
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If you live in constant need of creating security, no matter how exciting or rewarding your life gets, it will only be a matter of time before you seek a new adventure. Now, that doesn’t mean that new adventures are bad. By all means, learn new things, get more degrees, travel to new places, progress!

Human beings are programmed to progress. We are encouraged to be ambitious, to reach for the stars! But the difference is the state of mind you are in. When you live in this constant state of fear and insecurity, nothing is ever enough and the more you get, sometimes the emptier you are.

When you are making a million dollars, that state of fear will tell you that a million dollars is not enough and you have to keep going. It becomes this unhealthy addiction of acquiring more and more and often leads to a life of criminal activity.

Change your mindset, replace fear and insecurity with the desire for progression and ambition then your life will be more about enjoying what you are experiencing rather than hoarding the results of your “successes.”

REIC Investors Share Their Experience: John and Diane

Jun 22 | by | REIC Testimonials, Testimonials
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“One of the fantastic benefits of the Strait Path system is the mitigated risk. With one of our investment properties, the buyer-tenants we had were unable to continue with the purchase of the home.

The down payment they had made toward the house was enough for us to cover just a couple of mort- gage payments, if it came to that. Luckily, we were able to find new tenants within the month, so we only had to cover one mortgage payment with that reserve down payment. The new buyer-tenants were able to invest even more to build immediate equity.

They have been fantastic and are making improvements to the home while working toward ownership. They are planning to attend classes to prepare them for successful home ownership. This system really reduces risk for everyone — including tenants.”

Profitability

Jun 21 | by | Some food for thought, Strait Path Real Estate
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Profitability

“It’s not how much money you make, but how much you keep, how hard it works for you, and how many generations you keep it for.” —Robert Kiyosaki, author, Who Took My Money?

For most investors, profitability is the primary, and in some cases sole, factor used to decide whether or not to invest in something. They fly from deal to deal with no system in place.

Like an eager puppy that runs to whoever will pet it, they rush into any deal as long as they’re convinced that it will make them money. Unfortunately for them, their profits are as fleeting as their focus. They make good money on one deal, average money on another, and lose money on the next. They’re reduced to calculating returns based on averages over time, rather than the performance of each individual deal.

Also, investors who elevate profit above all other factors are those who tend to spend money as fast as they make it. They have to keep making it in order to support their extravagant lifestyle, which creates a self- reinforcing cycle. They become addicted to money and lose the ability to put it in its proper perspective as a tool and a byproduct, rather than an end in itself.

In Strait Path real estate, we’re not just looking to make money — we seek sustainable, consistent, and predictable profits. We don’t want the highest returns — we want the best returns when considered in light of every other investment factor.

Without a holistic approach, perspectives on profit become misguided. No amount of money is worth exposure to high risk and/or creating a win-lose transaction. The more time and effort you have to spend on a deal, the less it should be worth to you. The more you must depend on appreciation, the less appealing the opportunity becomes.

The Five Profit Centers on the Strait Path

Jun 17 | by | Cash Flow, Discount Equity, Down Payment, Interest Rates, lease option
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MONEY%20TREE The Five Profit Centers on the Strait Path

The interesting thing about Strait Path real estate is that even though profitability is one of six factors considered for every deal, the Strait Path system is still far more profitable than other forms of investing. In other words, the Strait Path system is still the best even when profitability is an investor’s sole or primary focus.

This is because the system offers five profit centers, wher

eas others offer only one or two. The five profit centers include 1) discount equity, 2) cash flow, 3) down payment, 4) appreciation, and 5) tax benefits.

1. Discount Equity Discount equity is the difference between the market value and the purchase price of a home. Our finding system helps us secure properties with 15 percent equity or more. Depending upon the size of the home and its discount purchase price, you may make more on one purchase than you make all year in your current job. For example, if a home is worth $275,000 and you can purchase it at a 15 percent discount for $233,750, you’ll make $41,250 on the purchase alone.

2. Cash Flow Cash flow is the monthly amount you receive from your tenants less your monthly mortgage payment. In short, it’s the difference between your mortgage payment and what your tenant pays you each month.

$200/mo cash flow

3. Down Payment The technical term for this is “option consideration,” which is a fee paid by tenants to secure their opportunity to purchase the home within a specified period of time. This is nonrefundable, and we receive on average $5,000 down per house.

$5,000 down payment

4. Appreciation Appreciation is the rise in value of a property over time due to increased demand. What’s notable about Strait Path real estate is that we don’t rely on appreciation to turn a profit, though we do account for it when it occurs.

10% additional profit

5. Tax Benefits Tax law allows homeowners to deduct mortgage interest from their taxes. This is a huge advantage in Strait Path real estate, since the goal is to purchase as many homes as possible

With a fixer-upper, investors receive the first profit center and, if they’re lucky, the fourth. But they have no cash flow, they do not get a down payment, and capital gains taxes often wipe out any earnings. With rentals, investors enjoy tax benefits and sometimes benefit from property appreciation. They receive no down payment, however, and they’re lucky if they get a good deal up front and receive a positive cash flow. Once again, the Strait Path system offers investors all five income streams.

Different methods of investing

Jun 14 | by | Real Estate, REIC Insider
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The Six Elements of Successful Investing: various Methods compared and contrastedbest investing guide pic Different methods of investing

I put more than $15,000 and hundreds of hours of work into my first property. I eventually sold it, making a $54,000 profit. My second property required $6,000 of repairs and about sixty hours of work, and I made over $100,000 upon selling. I never set foot on nor did I put a penny into my third property, which I sold for a $20,000 profit. Which deal yielded me the greatest return?

Even though my second deal made me $100,000, it still required a lot of time and money. My third property was the winner because it only took a few hours of my time and no money.

Profit is just one aspect to consider when you’re seeking the best way to invest. Granted, it’s a vital factor, yet far too many people consider it to be the most important, which leads to faulty decisions. There are actually six elements of successful investing, all of which must be considered with every deal, every system, and every strategy in order to make wise investment decisions.

Chapter 3 from the Strait Path to Real Estate wealth

Jun 11 | by | Uncategorized
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When I began creating the Strait Path system, I wasn’t just looking for what would make me the most money.

I wanted a system that would create the greatest profits after considering these other core factors. Everything else being equal, I prefer to make $20,000 in a few hours of my time versus making $40,000 with a hundred hours of my time. I don’t care how lucrative a potential opportunity is — if it’s highly risky, I stay away from it.

A strategy that may make me tons of money in a hot market could very well tank when the market turns.

What sets the Strait Path system apart from almost every other form of real estate investing is one key word: sustainability. Strategies and systems that focus on profit alone may make money in the short-term, but they are unsustainable.

This applies to every system that does not consider each of the six key elements equally and holistically. These inconsistent, unreliable forms of real estate include the following: rentals; fix-and-flip; lease options; speculative building; equity leveraging; distress sales, including short sales and foreclosures; land development, residential development, and commercial development; and multi-unit investing.

Keys to Purchasing Multiple Investment Properties

Jun 4 | by | From the Coaching Corner
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Keys to Purchasing Multiple Investment Propertiesinland empire investment property Keys to Purchasing Multiple Investment Properties

  • Use the right mortgage broker who understands how to finance multiple homes on one person’s credit.
  • Become profit conscious, rather than rate conscious. Go with the banks that let you buy the most real estate, not those with the best rates.
  • Use specialized loan programs, which allow you to maximize the number of homes on your credit.
  • Use Compassionate Financing to optimize your debt-to-income ratio.
  • If you’re unable to get approved for traditional financing, use creative financing options to get started while you’re improving your ability to secure traditional loans.

How Banks Really Work

Jun 3 | by | Some food for thought
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Perhaps you can remember closing on your first piece of property. You may have felt excited, or maybe nervous. Something that most people cannot avoid feeling at the closing table is wondering whether or not they got a good deal on their loan. Let’s face it. Loans are very complicated, and you cannot possibly know everything there is to know about loans by your first, second, or even your tenth closing.

I personally fought these same feelings on many loans until I decided to become a loan professional and discover the real scoop about the lending industry. I was in for a treat, because I had no idea that I had so much to learn. Today, after having participated in hundreds of transactions, I share those findings with you. You will find, as I did, that not everything is as it seems.

Let’s begin with the loan officer. Rate conscious consumers always assume a good loan officer is one that provides the best rates while a bad mortgage office offers higher rates. Unfortunately, most consumers don’t know that loans are so complicated that one loan officer may have an interest rate of 6% and an APR of 8.25%, while another loan officer has an interest rate of 7.5%, but an APR of 8%. Which loan officer offered a better loan? The 6% or the 7.5% interest rate? The higher rate in this situation is the better loan.

When you contract to work with a loan officer on a transaction, you may be intrigued to learn that while there is much that a loan officer can control, there is also a lot that they cannot. Choosing the right bank with the right program and the proper deal package is about all a loan officer can affect. Now, while these are important details that can make or break a transaction, what I was not prepared for was how little control a loan officer has over the loan process, and even, the loan rate.

After a loan officer has collected your financial documents, the appraisal, and the title report, the loan is submitted to the bank. A loan officer will normally determine which bank to submiat to based upon which bank has the most competitive rate. But the following is what a loan officer cannot control:

1. A bank may pre-qualify you for a loan, knowing that you may only have a small chance of qualifying. Even though you have a deadline to produce a loan, a bank may waste the majority of that time going through underwriting and getting conditions before leveling with you. This means that you may lose the deal, and risk appraisal and earnest money costs.

2. Banks don’t play fair. They may ask you to produce a rental agreement for the home you are trying to purchase. Since you cannot market the home before purchasing it, this is an unreasonable request. Perhaps your appraisal came in showing too much equity. The lender may ask you to have the seller of the home write up a letter stating why they are selling so far below the appraisal price. The only problem here is that the appraisal is a private document and should not be shared with the seller. These are a just a few examples of what we encounter daily in the loan process.

3. Banks can change the rate after it goes through underwriting up to 24 hours prior to closing. The loan officer has no influence in this matter, and must simply deliver the bad news just prior to, or at the closing table.

As you can imagine, all of this creates quite a predicament for a loan officer.

It was during my early days of struggling with the loan process and facing a lot of frustration that I developed my definition for a real estate investor. An investor is someone who knows how to get things done that others cannot. This may seem like a strange definition, especially when it has nothing to do with real estate. However, this definition has everything to do with becoming a successful real estate investor, and also, a member of the elite 5% of all Americans that own more than 55% of our nation’s wealth (Edward Wolff).

REIC and its partner Strategic Lending have transacted several hundred loans and have formed the most efficient and reliable system for not only your typical loan needs, but for the financial investor as well. As you team with REIC, we encourage you to be involved, and work with us as we try to perform a little miracle on every one of your transactions and help you to achieve financial independence through real estate.

Real Estate Investors Club
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Service to Tenants and the community

Jun 2 | by | lease option, Real Estate, Strait Path Real Estate
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ServiceSign Service to Tenants and the community

The best part of Compassionate Financing is that it provides tenants huge benefits that they cannot get in any other way.

While it frees you from having to repair toilets, it gives tenants the opportunity to make improvements and feel as if they’re really creating a home environment, which is difficult for renters to achieve. Tenants have the feeling of control and ownership while they are buying time to improve their credit.

They can build equity much faster than they can with conventional financing. They can acquire seasoned loans since they are living in the home before purchasing it. They can take advantage of the opportunity of home owner- ship with a relatively small amount of money.

And with our system, it’s almost a guarantee that they will, in fact, be able to purchase the home. Furthermore, we encourage investors to give tenants an equity bonus when they purchase the home.

You’ll find all the details on the Compassionate Financing system in chapter seven.

Keys to compassionate financing

  • By giving tenants the opportunity to purchase a home, you relieve yourself of the burden of property maintenance, decrease your risk, and increase your profits.
  • You eliminate the predatory nature of lease options, as well as the risk of lost appreciation by using better contracts than standard contracts.
  • You help tenants purchase homes. It serves them better and makes you more profit in the long run.
  • Compassionate Financing gives tenants substantial benefits, such as the ability to make home improvements, time to improve their credit, and the opportunity to build equity. In exchange for these benefits, they are willing to pay more up front, as well as on a monthly basis.
  • Once you’ve gone through the four-phase Strait Path process (plan, find, purchase, serve) with one home, things really start to get exciting, since your success builds exponentially. The more properties you buy, the more you’re able to buy. One home can easily become many over time. Once you purchase a home at a discount and it generates profits, you can leverage those profits and the accumulated equity to purchase another property, and another and another. This is what we refer to as “achieving critical mass,” which is detailed in chapter eight.

REIC in-house deposit machine in action

May 27 | by | Meet the team
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At REIC, we have an in-house deposit machine. This is done in the accounting office. Here is a short video clip of tommy processing $700,000 dollars in checks:

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