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5 Tips to Investing in Any Out-of-State Market:

Filed under: Buy-and-Hold,California,Due Diligence,Economy,Flipping,Memphis,Multifamily,Out-of-State,Real Estate,Real Estate Investment,Retirement admin November 9, 2015@ 5:58 pm

by Matthew Owens

People ask me constantly how you should chose a market to invest in and what factors do you consider before investing. Real estate is very much market specific and it is very important to analyze the market you are interested investing in for a variety of factors. Investing strategically in specific markets across the country is a great strategy to create a cash flow stream to cover all of your expenses during retirement.

Here are 5 tips to investing in any out of state market:

(1) Start with analyzing the market. When researching any out of state market understanding the growth expectations, affordability of the market, and economic volatility or stability can be very important. Where are you in the cycle? What does the housing price index in the market tell you? What areas of the market do you want to focus on for the highest cash flow and asset quality? What about expected job growth? Review these items and gain a good understanding of the market before investing.

(2) Build your team. When investing in an out of state market your team is extremely important. The primary team members are property managers, contractors, attorney’s, CPA’s, Real Estate Agents, Inspectors, Insurance agents and affiliate relationships. Each team member should be vetted in detail with multiple interview questions setup. Always have backup team members in place as well.

(3) Do a complete neighborhood analysis. Be sure you really know your neighborhoods. Many investors make the mistake of investing in the wrong areas with the wrong tenant base. You can make some properties in lower end neighborhoods work if you have the right management company but for me it’s typically not worth the headache. Usually you get lower financially educated individuals renting from you that are judgment proof and there is a significantly increased risk of not paying or missing rent payments, tenant turnover, tenant repairs, vandalism and theft that occur on these types of properties. Understanding what the crime rates are in the areas as well as making sure you do not invest in a rural area which makes your property harder to rent are important factors also.

(4) Review the state laws. In every state the laws are different and it’s imperative to have a good general practice attorney, eviction attorney, real estate attorney and CPA in each market that you invest. The tenant landlord laws are extremely important when owning rental properties in any prospective market. Are the tenant landlord laws more favorable for tenants or landlords in your prospective state? How long does it take to evict a tenant if needed and how easy is it to go after them for repairs?

(5) Do a full renovation and property analysis. Before investing in any investment do a full preventative maintenance check and renovation bid on the property. Review all of the major systems in a property from the roof, HVAC, Furnace, plumbing, electrical, appliances, water heater, foundation and sub-floor, pool and equipment, and more. Get a full inspection report on the property from an outside licensed inspector. One of the biggest hindrances to cash flow is maintenance when things break down unexpectedly. Knowing your total all in cost on a project along with how much the investment produces after all expenses (property management costs, property taxes, insurance, repairs, vacancies, etc.) is key in determining your return on investment and future cash flow.

These are just some of the factors we considered before investing in any market. No matter what market you are investing in, do your due diligence on the market before investing. It could be the difference between having a long term positive cash flowing investment or an investment that cannot weather the storm.

OCG Properties, LLC
W: 424-757-4680

About Matthew Owens
Mathew is the founder of OCG Properties, a company that specializes in equity and cash flowing real estate investments. He graduated from UC Santa Barbara with a bachelors degree in economics with an emphasis in accounting, earning his CPA license while performing audit and taxation engagements at various CPA firms, and worked primarily on large real estate clients. He currently specializes in value add cash flowing residential and multifamily real estate investments having purchased and renovated over 450+ properties. Mathew works with investors in multiple ways to acquire real estate in high cash flow markets around the country. He also helps investors develop various cash flow streams through syndications run by professional operators, promissory notes and other real estate related assets. Many of his clients benefit from his knowledge of real estate taxation and due diligence, legal and investment structuring, and long term investment planning and analysis.
• BA in Economics w/ Emphasis in Accounting from UC Santa Barbara
• Certified Public Accountant, 2002
• Bought, renovated and sold or held over 450+ properties Currently buying 5+ single family rental properties per month
• Purchasing an apartment building per quarter
• Raised over $25 million in private investors capital
• Currently own over 150 units in Memphis, TN & Atlanta GA Property management 7+ years experience
• Investments • Syndicated investments • Performing and non-performing Notes • Single family, multifamily properties flipping & holding • Private lending
• 10+ years experience taxation and auditing
• 8+ years full time real estate experience
• FIBI Long Beach Real Estate Investment Club Founder, 2009, 1638 members
• FIBI South Bay Real Estate Investment Club Founder, 2012, 1518 members

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Investing in Foreign Real Estate:

Filed under: Buy-and-Hold,California,Due Diligence,Economy,Flipping,Memphis,News,Real Estate,Real Estate Investment admin November 2, 2015@ 3:21 pm

by Mauricio Leon de la Barra

US investors have invested billions of dollars in residential and commercial real estate located in Mexico and other Latin American countries. Yet, many investors seldom rely on competent counsel when dealing with foreign real estate acquisitions and, when they do, they often fail to understand the applicable legal framework and practices governing the transaction.

The most common misconception relating to the acquisition of foreign real estate is that an American cannot own real es-tate located in a foreign country. For instance, people often claim that non-Mexicans cannot own property located in Mexico and that all that the person can acquire is a 99-year or 50-year lease. While it is true that there are some limitations governing the acquisition of Mexican real estate by non-Mexicans, for the most part those limitations apply solely to the acquisition of residential real estate located inside of what is called the “restricted zone”, which is the area located 100 kilometers along the international borders and 50 kilometers along the coast. Subject to certain limitations, permitting requirements and reporting obligations, non-Mexicans can typically acquire (a) an interest in residential or commercial real properties located outside of the restricted zone; (b) an interest in commercial real properties located inside of the restricted zone; and (c) a trust beneficiary interest in a trust holding legal title to a residential real property located within the restricted zone, with the trust beneficiary generally having the ability to use, enjoy, and dispose of, the real property, just as any person owning real property in the United States through a revocable living trust or a wholly owned limited liability company may do.

Foreign real estate investors also tend to make similar mistakes. The most common mistakes relating to the acquisition of residential and commercial real property located in Mexico and the rest of Latin America are:

1. Failing to conduct proper due diligence.
2. Failing to understand the results of the due diligence.
3. Agreeing to have all transaction documents written in a foreign language.
4. Assuming that contracts and insurance policies are non-negotiable.
5. Thinking that notaries are legal experts representing the interests of the investor.
6. Failing to identify and understand pre-closing, closing and post-closing mechanics.
7. Treating the transaction as a “US transaction” without understanding local practices and local law.
8. Falling for the “this is how things are done here” argument.
9. Failing to retain competent counsel who understands the cross-border aspects of the purchase.
10. Failing to use the adequate corporate or trust vehicle.

Acquiring and owning real property located abroad can be fun – and profitable – if the transaction is properly handled and the mistakes referenced above are avoided.

About Mauricio Leon de la Barra

Mauricio Leon de la Barra is one of the few attorneys licensed to practice law in both Mexico and California, and currently concentrates his practice on business and real estate transactions involving Mexico and U.S. laws. Having practiced law for over 15 years at premier boutique and AmLaw 100 law firms in Mexico City and Los Angeles, Mauricio has an unparalleled ability to understand and achieve the client’s needs and goals, an extended network of resources throughout Mexico and California, and first-hand knowledge of complex legal matters involving varied deal and jurisdictional contexts. He is an active member of the State Bar of California and of the Los Angeles County Bar Association, where he served as Chair of the International Law Section, and was chosen for inclusion in the 2013 and 2014 Southern California Rising Stars lists, an honor reserved for those lawyers who exhibit excellence in practice (only 2.5 percent of the attorneys in California are named to the Rising Stars list each year), and was recently included in the 2015 SuperLawyers list.

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Infinite Growth of Wealth:

Filed under: California,Due Diligence,Economy,Memphis,News,Personal Development,Real Estate,Real Estate Investment admin @ 3:15 pm

By Gena Lofton

Do you want to know the three (3) secrets to growing your wealth infinitely? The answer pertains to how you spend your time. Therefore, I will highlight the rules to growing your wealth:

1. Create commodities that have the greatest market value in relation to the time you spend creating them.
2. Exchange or sell those commodities you create to purchase assets that generate the greatest wealth, utilizing the least amount of your time.
3. Spend sufficient amounts of your wealth to build structures and associations that free up more of your time so that you can grow your capacity to convert more of your wealth into more passive income producing assets.

Repeat steps 2 and 3 over and over as long as the demands on your time remain small enough to keep your business under control and you are able to maintain all other aspects of your life.

Once you leverage your resources, meaning to multiple them, you will begin to see a rapid increase in your wealth. This simply goes back to putting more value on our time. Most people don’t realize that their most valuable asset is their time, it isn’t money, houses, jewelry or other material possessions, it’s, simply their time.

If more people were to consciously follow these rules their wealth would increase dramatically. I thank you for spending your time in reading my blog. It means allot to me that you have shown enough interest to read the entire blog. I attempted to make it as short as possible without losing the point of my message because I respect your time. Remember, neither you nor I will ever get this moment to share with each other again in life. If you want more information on how you can visit my website at

Again, thanks for your time today.

About Gena Lofton
Gena is the Founder and Principal Fund Manager of Passive Income Advisors (PIA). PIA syndicates private placement opportunities in real estate to help people generate tax efficient and reliable passive income streams so they can finally enjoy the fruits of their labor. She and her investors own over 2,000 units across four (4) states and are building the largest resort in Ambergris Caye, Belize. For more information visit their website at

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The Five “W”s of International Real Estate Investing:

Filed under: Buy-and-Hold,California,Due Diligence,Economy,Flipping,Multifamily,News,Real Estate,Real Estate Investment,Retirement,Taxes admin @ 3:05 pm

By Bill Soteroff

Generations of journalists have been trained to ask the 5Ws: Who, What, Where, When and Why? International real estate investors should ask the same questions.

1. Who should I work with? Real estate is a local business. To get the best service and make the best investment, you have to work with a professional. Real estate agents are the experts in their markets. If you’re a buyer, they can help you find the right property faster. If you’re a seller, they’ll help you price it right and market it to the most likely buyers. Yet being an expert in one area does not necessarily translate into expertise in another area. Anyone can search for properties on the Internet. It takes the right agent to get you the right property. Always work with a professional.

2. What should I invest in? The principles of investing are the same all over the world. Those who make wise investments earn money. Those who don’t lose money. Real estate rewards investors who have patience and vision. No matter how the market is doing, there are always people willing to sell properties, which means there are always opportunities for smart investors. Understand the rules and regulations for foreign ownership and make sure you know the local rules, like exclusivity. Fluctuations in the stock market or currency exchange rates should not dictate your real property investments. Let the fundamentals guide you. Always invest for the long-term.

3. Where should I invest? It’s easier than ever to invest across borders. Never compromise on these criteria: good governance, a fair judiciary and professional standards. Invest only in stable countries where the rule of law prevails and the real estate industry is led by professionals. Agents don’t necessarily have to be licensed, but there should be a culture of professionalism that supports all transactions. Last year, more than 200,000 foreign buyers bought homes in the United States and 6 of the Top 10 commercial real estate investment cities were in the United States (New York, Los Angeles, Boston, San Francisco, Chicago and Washington, D.C.). Other strong markets include Canada, Europe, and Australia, as well as emerging regions like Mexico and the Caribbean, Central and South America, the Middle East, and Asia. Always look for stable, growing markets.

4. When should I invest? Yesterday – though there are plenty of opportunities you’ll regret tomorrow if you don’t take advantage of them today! Always explore opportunities.

5. Why should I invest? Real property remains the core of the most successful wealth-building strategies in the world. As Mark Twain famously said, “Buy land, they’re not making it anymore.” Always believe in real estate.

While it’s true that all real estate is local, we’re part of an increasingly interconnected global economy. Real estate professionals who know their markets and keep their clients’ best interests at heart are key to buying the right properties at the right price and reducing the stress and strain of what for many investors remains one of the biggest financial decisions they’ll make.

About Bill Soteroff

Bill Soteroff is president of Keller Williams Worldwide. One of the leading figures in international real estate franchising, Soteroff has helped build Keller Williams into the world’s largest real estate franchise by agent count, with 125,000 associates across the Americas, Europe, Africa and Asia. He has served as chief operating officer of RE/MAX Europe and executive vice president of RE/MAX LLC. Born in Canada, Soteroff received a B.A. from the University of Western Ontario and a certificate in negotiations from Harvard. He has taught at the University of Colorado Denver Business School.

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State of Economy: A Balloon in search of a Pin:

Filed under: Buy-and-Hold,California,Due Diligence,Economy,Memphis,Multifamily,News,Real Estate,Real Estate Investment,Retirement,Taxes admin October 29, 2015@ 10:04 am

Allan Hamilton

Dispute the protestations of the Federal Reserve and a number of cheerleaders on CNBC, both the U.S. and the global economies are extremely fragile.

Global GDP is clearly slowing down, and the data we are getting from the US suggests that we are going to see a serious falloff in GDP over the next few quarters. The latest jobs report was just plain ugly. Private payrolls increased by just 118,000, which is about the minimum level needed for unemployment not to rise.

The Global economy is in the middle of a full blown Commodities meltdown. All major Commodities have in very quick time halved in price. Some by much more. This includes Iron Ore, Steel, Uranium, Copper, Gold, Silver, and of course Oil. Both Silver and Uranium are being sold on the open market below their mining costs!

Clearly this is related to China and its previous penchant for overbuilding infrastructure at a pace that has never been seen before. China poured 25% more cement in three years (2011, 2012 and 2013) than the United States poured in the entire 20th century. Plain, brute fact. See picture below:

This is why resource based economies (Australia, Canada, Brazil and others) had much milder recessions than most western countries did during the Global Financial Crisis (GFC) from 2007 to 2010.

Consequently China now has the biggest Real Estate Bubble in all of human history: 64 million empty condominiums, dozens of ghost cities, and excess manufacturing capacity at a completely unprecedented level. In the summer of 2009, China had 5.6 billion square meters of real estate under development, both approved and pending. If half of that development was Office development that would represent a 5’ x 5’ office cubicle for every man, woman, and child in the country! China has a population of 1.2 -1.3 billion people. Just to makes things worse, another 10.6 billion square meters is currently under development. No wonder the Asian Warren Buffet, Li Ka-Shing sold all of his billions of Chinese real estate assets starting in 2013 and accelerating into 2014.

Right now, the China Containerized Freight Index has dropped 30% since early 2013. This is a clear indication of the state of the global economy. See picture below:

The chances that the next recession will be a normal recession are not good. When you don’t have a bush fire for a long time – when it finally happens, it can be quite nasty.

Stay tuned – GFC II will bring great opportunities for those with cash in hand. Already, commodities such as Oil, Silver, and Uranium are getting down to the price level of a “Screaming Buy.” A great way to play the coming upside of Oil is to buy the Electronically Traded Fund (EFT) called USL once Oil goes back down to the $30 to $35 per barrel range.

Real Estate Synopsis:
The one positive trait that California real estate had from March, 2012 to July, 2013 was pricing momentum. Unfortunately, pricing momentum has now been lost. According to data from the real estate firm Redfin, in Orange County “about one-third of sellers have been forced to cut prices.” (

You can see the lost pricing momentum in real estate in the following PropertyRadar chart on California house prices:

Given that the last two California real estate bull markets (a bull market is an up market – think in terms of stampeding Bulls) lasted 9.5 years and 7 years respectfully – don’t you think that it is quite unusual that this real estate “Bull” market is majorly spluttering after only two years?

Additionally, price gains were extraordinarily rapid between March 2012 and June 2013. Real estate consultant John Burns has talked about the price gains as being “front-loaded.” Some of the properties I was tracking doubled in price in eighteen months, the CA median price gained 30% in one year, and the capitalization rates on multi residential apartment buildings have been compressed to a level that has never been seen before.

A friend of mine was advertising a sixty plus year old 12-unit apartment building in Hollywood for $4.8 million. He said the cap rate (the rate of return when the real estate is purchased all cash) on the building was 2% with a chance of getting the getting the cap rate all the way up to 4%! First, that’s $400,000 per unit which is WAY above replacement cost. Second, the historic cap rate average for even premium apartment buildings is around 6.5%. Nothing screams Bubble more obviously than a 2% cap rate.

How bad is the affordability of coastal California real estate? According to a recent study by Zillow, Los Angeles and Orange counties are the least-affordable housing markets in the country. Zillow found that: “a family earning the median household income of $59,424 in metro Los Angeles — defined as L.A. and Orange counties —would need to spend 47.9% of its income to afford a median-priced rental apartment, and 42.6% to afford a median-priced house. Both were the highest share in the U.S., though L.A. tied with San Francisco in for-sale housing.” UCLA’s Ziman Center for Real Estate also pegged Los Angeles County as the least-affordable market in the country. (

What has caused these rapid price increases in coastal California real estate? Has it been caused by household income increases? No – according to the Census Bureau real median household income has receded back to 1995 levels of income. See footnote 1. Has it been caused by a material improvement in the jobs market? No – the labor participation rate, which measures the number of Americans employed or looking for a job as a share of the working-age population, decreased to 62.7 percent, the lowest since February 1978. That’s a 36 year low.

So what caused the rapid price increases? I believe it was a combination of three highly exceptional events. First, U.S. interest rates hit the lowest level on record. In the U.K., interest rates hit the lowest level since the founding of the Bank of England in 1694. Second, banks started holding back inventory and allowing people to stay in their delinquent homes for longer. Given the fact that banks no longer had to mark their assets down to market prices via Accounting Rule FAS157 – banks were in no hurry to realize their foreclosures or their losses and so began spacing out their foreclosures. Third, hedge funds, searching for yield and utilizing low interest rates loans from Too Big to Fail banks and in some cases directly from the Federal Reserve Bank itself (, embarked on an unprecedented single family residence buying program. Hedge funds majorly affected the Californian real estate markets during 2012 and 2013 but have since abandoned California because prices have become too high to attain a good yield on rental real estate.

All three of these phenomena are highly unusual and represent an artificial stimulus to the real estate markets. As such, the growth in price has not been organic or based on increasing demand from end users, nor has it been based on increasing household income. It has been based on investor all-cash transactions, which as a category have been significantly waning of late.

In conclusion, now is not a time to be complacent or overly confident regarding real estate prices. Several prominent real estate investors have recently been ‘voted off Real Estate Island’ through the failure of their real estate businesses and their business models. Since one-third of sellers have been forced to cut prices in Orange County, clearly price momentum has been lost and more price cuts are on the way.

If the After Repaired Value (ARV) of a particular property was $700,000, but the new number to move the property is $630,000 – no amount of positive thinking will elevate the ARV back up to $700,000. Positive thinking is good, but at the end of the day, reality trumps everything.

About Alan Hamilton

Allan Hamilton is a full-time developer/analyst for a large Mutual Fund company and an active real estate investor. He has bought and sold hundreds of properties. Allan and his family own and run several multi-family apartment buildings in Long Beach having bought their first Long Beach apartment building in 1993 paying $12,500 per unit. Allan ran many rehabs to HUD REOs in the 1990s and utilized 1031 exchanges on apartment buildings during that same time period. Allan was born in Sydney, Australia and has a degree in Accounting, Finance and Systems from the University of New South Wales. Allan has studied economics and finance heavily for several decades.

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Flipping Real Estate versus Holding Real Estate:

Filed under: Buy-and-Hold,California,Due Diligence,Economy,Flipping,Memphis,Multifamily,Real Estate,Real Estate Investment,Retirement admin October 19, 2015@ 11:39 am

Matthew Owens, CPA

Should I flip or should I hold? That is the question many investors continue to contemplate when trying to start out investing in real estate. It is so prevalent in my discussions with investors that I felt it important to come right out and say it, WHY NOT DO BOTH? There are definitely pros and cons to both flipping and holding rental property but really when investing in either you are doing many of the same activities. In a flip or buy and hold investment you have to find a deal that is profitable, raise the capital for the property, renovate the property and then either sell for a profit or hold for cash flow. Of course there are a million different real estate strategies to deploy and there is no one size fits all, however the end goal is still the same for a flipper or a buy and hold investor, PASSIVE CASH FLOW.

If you are a flipper you are trying to obtain large chunks of cash that you can invest in more flips or into cash flow streams. Once you have enough cash, most people invest it for cash flow so they can retire. People start out flipping because they think they need this cash in order to hold real estate.

If you are a buy and holder, you are going directly for the cash flow. The goal is to slowly develop enough cash flow to cover all of your expenses and then some, to re-invest and help cover inflation. Most people think they cannot do this strategy unless you have cash to put down as a down payment. NOTHING COULD BE FURTHER FROM THE TRUTH. If you do not have your own capital you can use joint venture partners, raise capital through syndications or use private lenders for the funding sources, instead of your own money. You can develop a cash flow stream using OPM (other peoples money) as long as you provide enough value and deal know how to help your investors hit the return on investment and protection they are looking for.

Really though, flipping and/or holding property is a personal preference. I personally believe a combination of both is important for a healthy real estate portfolio. Here are some of the differences between the two that might effect your decision if you want to focus of flipping and/or holding.

 Flipping provides short-term cash while holding typically provides residual monthly cash flow.

 Flipping is not tax advantageous while holding provides depreciation benefits.

 Both can provide a high return on investment

 Flipping can be time intensive during construction while holding can take time monthly to manage the property managers and review your investment

 Flipping has high carrying costs while holding is typically positive cash flow after all costs

 Holding comes with tenant issues while flipping can come with contractor issues.

 Holding provides an inflation hedge while flipping is less susceptible to market fluctuations due to its short term nature.

 You can flip or hold many different asset types, from single-family homes and multifamily buildings to commercial property and notes. There are many options available.

There are pros and cons to both investment types so it is important to come up with an investment strategy that works for you and focus on it. Some flip income coupled with lots of cash flow is never a bad way to go.

OCG Properties, LLC
W: 424-757-4680

About Matthew Owens
Mathew is the founder of OCG Properties, a company that specializes in equity and cash flowing real estate investments. He graduated from UC Santa Barbara with a bachelors degree in economics with an emphasis in accounting, earning his CPA license while performing audit and taxation engagements at various CPA firms, and worked primarily on large real estate clients. He currently specializes in value add cash flowing residential and multifamily real estate investments having purchased and renovated over 450+ properties. Mathew works with investors in multiple ways to acquire real estate in high cash flow markets around the country. He also helps investors develop various cash flow streams through syndications run by professional operators, promissory notes and other real estate related assets. Many of his clients benefit from his knowledge of real estate taxation and due diligence, legal and investment structuring, and long term investment planning and analysis.

• BA in Economics w/ Emphasis in Accounting from UC Santa Barbara
• Certified Public Accountant, 2002
• Bought, renovated and sold or held over 450+ properties Currently buying 5+ single family rental properties per month
• Purchasing an apartment building per quarter
• Raised over $25 million in private investors capital
• Currently own over 150 units in Memphis, TN & Atlanta GA Property management 7+ years experience
• Investments • Syndicated investments • Performing and non-performing Notes • Single family, multifamily properties flipping & holding • Private lending
• 10+ years experience taxation and auditing
• 8+ years full time real estate experience
• FIBI Long Beach Real Estate Investment Club Founder, 2009, 1638 members
• FIBI South Bay Real Estate Investment Club Founder, 2012, 1518 members

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How Land Trusts Can Benefit You:

Filed under: Asset Protection,California,Due-on-sale,Memphis,News,Real Estate,Real Estate Investment,Trust admin @ 11:21 am

Dyches Boddiford

The land trust is an agreement that allows real property to be held privately for a beneficiary. That way, the beneficiary, whether it be you or your entity, does not show up on the title in the public records.

Follow me here. Say you have $1 million insurance coverage for liability. You hit an attorney in the crosswalk with your car. Will he settle for the insurance limits or will he sue for more? Or what if your insurance company denies your claim for some reason? How much will the suit be?

Well, that usually depends on how deep he thinks your pockets are. If you own property in your own name, the lawyer suing you will easily find your house and any other properties you own in the public records. This could easily become a $3 million suit.

Before you even know you will be sued, the opposing attorney could have the sheriff park in front of your house, knock on your door while you are eating dinner and hand you your lawsuit in front of all your family and the neighbors!

But, if you have your property in a land trust, beneficial ownership is hidden. Your land trust is not filed in the public records. Your ownership private stays private. No one knows who the beneficiary is but you.

Elements of a Land Trust

The land trust has four elements:
1. Settlor – This is the person, usually you, who creates the trust.
2. Trustee – The Trustee’s control is limited by the terms of the trust. This can be a trusted friend, sister, an in-law or other family member. It is best to choose someone without your last name to increase your privacy.
3. Beneficiary – This is who receives the benefits of the trust. This could be you or someone else. One of your companies would make an excellent beneficiary. There can even be more than one beneficiary if desired. The beneficiary has all of the control. The beneficiary can direct when property is bought and sold. The beneficiary is the one who can refinance the property or can collect the rental income from investment properties.
4. Trust corpus – This is the real property held by the trust.


Properly structured, the trust is transparent for tax reporting. So there is no loss of benefits or additional accounting. But you have achieved is privacy of ownership.

What Will your Lender Say?

Again, properly structured, the Garn-St Germain Depository Institutions Act of 1982 specifically provides that you can place your property in a land trust without triggering the due-on-sale clause. That means you can transfer mortgaged property to a land trust without interference from the bank. This is the case as long as you as borrower remains the beneficiary, the property consists of four or fewer dwelling units, and the trust is revocable and does not convey rights of occupancy to others.

Where Can Land Trusts Be Used?

Land trusts have been used in all 50 states. Where state statutes do not specifically provide for a land trust (most states), the land trust is treated as a contract between the settlor, beneficiary and trustee. Be aware that a few states require additional duties of the trustee.

A Good Example

An attorney tells the story of a law suit where a person was bitten by a dog that was not even supposed to be on the rental property. The person hired an attorney to sue. Since the property was in a land trust, they were required to serve papers on the trustee.

But the trustee could not be found since they were out of state. Of course, with no trustee to depose, they could not discover that the beneficiary was an LLC in a third state.

The plaintiff could still possibly use service by publication to get a judgment and then get the property. But there was a loan on it by a company in a fourth state.

After a while the frustrated attorney told their client to forget it and the suit was dropped. This is just to show what can be done and your land trust does not even need to be this involved.

To learn more about land trust, please attend the next FIBI event by RSVP here:

The Truth About Trusts with Dyches Boddiford

Thursday, Oct 22, 2015, 6:30 PM

The Grand Long Beach Event Center
4101 East Willow Street Long Beach, CA

46 Investors Attending

Topic: The Truth About Trusts with Dyches BoddifordThis presentation will introduce you to the fascinating world of Trusts – one of the least understood and under-utilized ways to control real estate and protect your assets.Land Trust & Personal Property Trusts Topics that will be covered in the evening presentation:·  What is a Land Trust?·  P…

Check out this Meetup →

About Dyches Boddiford:

Dyches Boddiford grew up on a farm in rural South Georgia, 10 miles from the small town of Sylvania. Though he was not too interested in farming, he took every chance to learn about construction, wiring and plumbing. He had an interest in science from an early age that was recognized and encouraged by several teachers. After graduating from the Georgia Institute of Technology in 1973 with a Bachelor’s of Science degree in Physics and a Masters in Information & Computer Science, Dyches spent some time in Corporate America before buying his first investment property in 1980. By 1991, he began working full time in his real estate investments and in 1992 earned more than he had working for his old employer.

A past president of the Georgia Real Estate Investors Association (GaREIA), Dyches has been a national speaker on the topic of real estate investments and entity strategies for 25 years. Dyches has remained a full-time real estate investor, and he feels that only by being active in real estate investing can he bring real world experience to his classes and materials.

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Putting on the Leverage – Part II:

Filed under: California,Due Diligence,Economy,Memphis,News,Real Estate,Real Estate Investment,Taxes admin October 12, 2015@ 4:59 pm

Steven F. Carvel, J.D., LL.M.

Steven F. Carvel, J.D., LL.M. is a Manhattan Beach based tax and wealth planning attorney that consults with over six-hundred of the wealthiest individuals and families in southern California.

One of the most unique aspects of what I do is that I get an insider’s look at the myriad of ways in which real wealth is built. Though there are many paths to success, many, if not most, of my clients are real estate oriented, and for good reason. They discovered long ago that real estate is a store of value, much like precious metals, gems, and fine art. However, my wealthiest clients also discovered long ago (in some cases decades ago) that real estate is not only a store of value, it also carries with it two unique features which set it apart as a far superior asset class, in my opinion, to any other store of value.

First, real estate can be productive, bringing with it earnings, frequently in the form of rental income (or other productive outputs, such as agricultural production). As a result, it can pay for itself, and after a point, creates a low maintenance income stream. The second unique feature is the ready opportunity to use Other People’s Money (“OPM”) in its acquisition. Go to your favorite banker and ask for a loan to buy gold, or better yet, a Picasso, and you will see what I mean (as well as ruin your banking relationship). Another important advantage is that is perhaps part of the least easily manipulated asset class.
That raises the question – where are interest rates going? A year ago, I wrote that interest rates were at a nearly all-time low (with the exception of the post WW-II era), and I suggested that contrarian indicators showed that the economy was not doing well enough to support a rise in rates. At that time many commentators expected a rise over the then-coming eighteen months. Well, we are two-thirds of the way through that prediction.

In July, Federal Reserve Chair Janet Yellen suggested interest rates would rise “later this year”. Again, in late September, she was sticking to the script. When Yellen was appointed almost exactly two years ago, some predicted that the result would be the U.S. going “from the low interest rate policies of Alan Greenspan, to the no interest rate policies of Ben Bernanke to the negative interest rates of Janet Yellen.” In late September 2015 that prediction appeared to be coming true as rumors began swirling that the Federal Reserve committee was floating the idea that a “fed funds rate below zero might be an appropriate target for the remainder of this year and next.” Yellen downplayed the rumor stating that a negative federal funds rate “was not something that we considered very seriously” at that time. Far from allaying fears, many were shocked that a negative rate was under consideration at all.

So, what is the truth and where will interest rates go? It is no secret that interest rates are used as a primary policy tool in influencing the U.S. economy. If the economy is doing well, rates can rise. If the economy is not doing well, it is unlikely that it will be politically attractive to raise rates, further chilling an otherwise tepid economy (no matter how badly we need to “rip the bandage off”).

Everything is cyclical, including the economy, and as was stated previously, the average length of the US business cycle has historically been 56.4 months from peak to peak. The last eleven business cycles (thought of as modern cycles) have averaged 68.5 months. Assuming that the current cycle began in June of 2009, the U.S. is now 76 months in. The fact that the “Federal Reserve’s Federal Open Market Committee (FOMC) decided not to raise the fed funds rate at their September meeting” is, at best, a mixed message about the U.S. economy in and of itself. Other indicators seem questionable. The U-6 unemployment rate (the broadest measure) shows unemployment hovering at 10% at the end of September 2016. At least one source puts real unemployment at closer to 23%. GDP is either 3% (a healthy rate of growth) or -1.5%, depending on who you believe.

But we cannot consider only the U.S. Monetary policy in other parts of the world has a decided, if not always predictable effect. Stay tuned…

To RSVP for the event, please click the following link:


Tuesday, Oct 13, 2015, 6:30 PM

Manhattan Country Club
1330 Park View Avenue. Manhattan Beach, CA

113 FIBI Members Went

Price: $25 at the door or $20 PRESALE (presale ends on 10/13 at 3:00 PM)MANHATTAN COUNTRY CLUB1330 Parkview Ave, Manhattan Beach, CA 90266Topic: STATE OF THE ECONOMYPanelists:Jeremy RollJeremy has been an active real estate and business investor for over 13 years who left the corporate world in 2007 to become a full-time passive cash flow in…

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State of the Economy – How Analyzing Our Economic Past Can Make You A Successful Investor In The Future:

Filed under: California,Economy,News admin October 7, 2015@ 5:56 pm

Jeremy Roll – Roll Investment Group

As a real estate investor, it’s my job to follow the daily economic news so that I’m always informed of what’s going on in the markets in which I invest. While it’s clearly important for me to track the current economic news, I would argue that my success as an investor is not predicated on whether I follow what’s going on today but, rather, on my ability to understand and predict where our economy is heading in the future. In fact, I would argue that not following the state of the economy for the purpose of predicting our economic future is comparable to an investor flying blindly and simply hoping not to fly directly into a storm. After over 13 years of investing in real estate, I can tell you that predicting our economy’s future has served me well during good and bad times and I would urge you to think about where we’re heading if you’re not already considering our future each time you make an investment, as it could mean the difference between your success or failure as an investor.

At this point you might be wondering how you’re supposed to be able to “predict” our economic future. While you likely won’t achieve 100% certainty or accuracy, I can tell you that the secret to predicting our economic future with a high probability lies in analyzing our economic past. For example: Did you know that there is a very high probability that we’ll have a recession in the US within the next 3 years? How did I come to that conclusion? It’s simple: I analyzed data about our past to predict the future.

Here are some examples of data from the past that you might want to track to help you predict if/when a recession might occur, given that our economy is cyclical and given that we can extrapolate the past to predict the future:

• Average historical length of a US economic recovery (after a recession): 39 Months
• Current length of our recovery: 72 Months
• Number of US recoveries since 1879 that have lasted more than 60 Months: Only 5 out of 28!
• Longest US recovery since 1879: 120 Months
• Number of months left before this recovery would be the longest ever on record: 48 Months
• Probability that we’ll have a recession in the next 3 years (taking the above bullets into account): 90%+!!

In addition to this important historical data, recent economic data might be hinting that a recession is coming sooner than you might think (please note that, while these are important data points, they don’t necessarily make a trend quite yet – all of these bullets represent September data only):

• Number of Fed Manufacturing Surveys that are in recession territory: 6 out of 6 (100%) – The first time this has happened since 2009!
• Business inventories-to-sales ratio is the highest it has been since 2009!
• Year-over-year retail sales ratio is the lowest it has been since 2009!

As you can see from the data above, there is a 90%+ probability that we’ll have a recession in the US sometime in the next 3 years, with recent data hinting that it could happen soon! Do I care why or when we’re going to have a recession? Not really. What matters more is that I know we’re going to have one soon and that knowledge can help me to optimize my current investment decisions. Knowing that there’s very likely going to be a recession in the next 3 years could impact many of the investment decisions that you’re currently making and that you will make in the coming years but without this knowledge you could be setting yourself up for failure every time you make a new investment. With that in mind, I’m currently only considering longer-term investments that will perform well during a downturn such as Mobile Home Parks and Self-Storage Facilities, as well as other asset classes with tenants that will likely do well in a downturn. For example, I would consider a retail opportunity where a major tenant is a 99 Cent Store (they tend to do well during downturns) while I would probably be weary of a retail opportunity where a major tenant is a furniture store (they tend not to do well during downturns).

In summary, while it’s always important to follow today’s economic news, it’s imperative that you analyze the past to predict the future. It can literally make the difference between your success – or failure – as an investor in the long-term.

To RSVP for The State of Economy panel in FIBI South Bay (10/13), please use the link below:

Jeremy Roll – Roll Investment Group

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Filed under: Due Diligence,Memphis,Real Estate,Real Estate Investment,Retirement,Self Direct IRA,Self directed IRA,Uncategorized admin @ 5:24 pm

Mathew Owens, CPA

Many investors do not realize they can invest in real estate right inside their own retirement account. Traditional investment companies like Charles Schwab, Fidelity, and Meryl Lynch do not allow you to invest your own retirement funds into any other asset other than the assets they manage. Typically that narrows your investments to stocks, bonds, mutual funds, money market accounts and a check the box style approach to investing. This has left a majority of the current retires in a position where they do not have enough funds to survive throughout the rest of their lives if they invest in the same old investment strategies. Many retirees do actually have enough funds in their retirement account to be able to invest it, live off of the interest for rest of their lives without depleting the principal, with the right investment strategies, which quite simply are not achievable through those traditional investment methods. Plus the large companies that handle those traditional investment types make hidden fees off of the retirement accounts weather the account has made money or not and the investor takes all of the risk. Coming from a business background that seems a little one sided to me.

There is a solution to the cash flow problem. And that is Self-Directing your retirement through a company similar to the large traditional investment companies with a few key differences. First and most importantly you can invest it in whatever you want with a few limited exceptions and take complete control of your own financial future. You can invest in real estate, promissory notes, businesses and much more and all of the profits go right back into your retirement account tax differed or tax free in a Roth type plan. This applies not only to IRAs but also for 401k plans as well. Secondly they typically get paid with a fee structure that is disclosed to you up front versus the big investment companies that are not required to tell you what they make off of you and they purposely hide those fees. It’s actually pretty easy to setup and as simple as setting up a traditional IRA or 401k plan. You can roll over your current retirement funds into it and start investing as well.

Obviously when investing it’s important to get as educated as possible about any investment or business you plan on investing in. Just because you can self-direct your investments does not mean you should if you do not know what you are doing or do not have the proper guidance. It is imperative to understand what you can and cannot do inside your self-directed retirement accounts which are pretty easy to learn with the right education. It is also extremely important to do the right due diligence on your investments before investing. Not doing your due diligence is the number one reason investors lose money on an investment. For example when investing in real estate some of the due diligence steps to do are:

– Neighborhood analysis
– Rental analysis
– Renovation analysis
– Market Value analysis
– Exit strategy review
– Cash flow and profit analysis
– Return on investment analysis
– Expense and income documentation
– What team members are in place
– How you plan on managing and structuring your investments

These are all key factors when investing in real estate and something to gain a detailed understanding about before investing.
If you are interested in learning more about the Key Due Diligence Steps for Any Real Estate Investment with your Self Directed IRA we are hosting a free Webinar on October 29th from 12pm – 1pm PST. We run out of space at 100 attendees so please RSVP soon to reserve your spot. Here is the link to attend:

Mathew Owens, CPA


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