March 4th, 2010
How do you determine what’s too good to be true, vs what’s a really great deal?
At Real Wealth Network, we get lots of folks calling us excitedly to tell us about their latest investments. We’ve learned to screen these out rather quickly. Last year, a close friend called to tell me about a company that promised to double his return EVERY MONTH! You could invest $10,000 and get $10,000 per month, every month for the rest of your life.
It doesn’t take much to figure out that this kind of return is simply unsustainable, and probably not even possible. However, the slick presentation got hundreds of intelligent people to sign up AND sign up their friends. Sure enough, no one ever received a $1 back. I would have liked to see real numbers on this deal – not speculation. But there were none. The entire business plan was based on speculation and “if-everything-goes-as-planned-policies.”
Often people see the 30+% cash-on-cash returns on our website and tell us they think it’s too good to be true. One of the reasons I like real estate is that it’s straight forward and easy to figure out. If you don’t believe the income numbers, you can talk to 5 property managers in the area to verify rents. You can ask for the seller’s tax return to verify that the rental income was claimed. You can get a title report to learn about liens and owner history. You can get an independent appraisal to understand value and comps. And you can get independent inspections to verify the condition of the property. It’s hard to pull the wool over your eyes, unless you just trust blindly and don’t do your standard due diligence.
Don’t think something is too good to be true, just because it’s better than anything you’ve seen. People are getting rich all around you, so there are great deals out there. The questions is, “which ones.” If you are not an expert on the topic, don’t guess or believe the seller/promoter/commissioned agent. Get advice from a real expert – someone who has MADE money doing what you’re trying to do, and not just from selling the concept.
To Your Wealth,
Kathy and the Real Wealth Team
Tags: due diligence
Posted in Investor Tips | No Comments »
March 1st, 2010
Greetings!
This week’s event should be very interesting, whether you have money or want money. Get an inside look at how local investors are making huge profits either borrowing or lending hard money. See details below.
Hope to see you there!
Kathy and The Real Wealth Team
Financing
You probably know by now that the Fed raised its discount rate on emergency loans to banks by 0.25%, to 0.75%. The discount rate is not the Fed funds rate and the central bank said the increase does not “…signal any change in the outlook for the economy or for monetary policy….” However, some analysts feel the Fed move was an attempt to appease inflation “hawks” who fear that a new bubble is growing as a result of all the “free money” to banks.
Investors are still locking in 5.5% interest rates on 30 year fixed loans. I think we can all agree that we will see serious inflation over the next 30 years, yet your fixed rate will not change. In 10 years, your payment will feel like half of what it is today . Rents will go up with inflation, but your payment is locked. What a beautiful deal.
Our lenders in Birmingham, Indianapolis and Dallas can finance up to 10 properties! Get a free quote from one of our preferred lenders.
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The Market
A few years back, a member from our network urged me to consider working with a group up in Sacramento that made pretty stellar guarantees to its investors. After reviewing their offering, we denied it. Sure enough, several years later, that group has been charged by the SEC for defrauding investors. http://www.sec.gov/news/press/2010/2010-24.htm
Why did we turn that “golden opportunity” down? First of all, the properties were in California, and all our research showed that CA housing prices were way out of whack in comparison to incomes at that time. We knew an adjustment was coming.
Second, there were guarantees – guarantees of a certain appreciation rate, guarantees of rental income and guarantees of a certain return. This is real estate. There are no guarantees. You can do many things to mitigate the risk by buying right, but anything can happen… And it did.
Third, too much control was given to the managing partners. That made me nervous. I like to be in control. Just ask my husband. And that’s why I like real estate as an investment.
Tags: California, due diligence, federal reserve, Inflation, Interest Rates
Posted in Weekly Wealth Report | No Comments »
February 18th, 2010
Wealth is of no use if you haven’t invested in your health also. Last month I got the dreaded swine-flu, which wasn’t that bad really. However, it turned into a nasty cough.
Many people advised me to take care of the cough before it got worse. But I was too busy getting ready for Australia and didn’t take the time to visit the doctor.
As a result, I hacked my way through one of the most exciting weeks of my life. I coughed frantically through dinner meetings, presentations, and one-on-one consultations. And when one of the kindest people I ever met offered to take me surfing, I couldn’t do it because I couldn’t breathe. In fact, it got so bad that I sometimes felt my lungs were going to collapse.
At the same time, a 70 year-old family member was having serious surgery. To all of our joy, he was sent home early due to his quick recovery. The nurses said his daily exercise and good eating helped him recover unusually well. He can continue to enjoy his health and wealth in his golden years.
So here’s my new investment goal: invest in one hour of exercise per day and eat fresh fruits and vegetables every day. And of course, a trip to the doctor today. 
May you also enjoy great health & wealth,
Kathy and the Real Wealth Team
Tags: Healthy and Wealthy Lifestyle
Posted in Investor Tips | No Comments »
February 15th, 2010
Happy President’s Day! I am just now adjusting after a fantastic trip Down Under – a beautiful place with the friendliest people I’ve ever met. I had the honor of speaking at a conference with over 1000 real estate investors. Next week I will share some of the differences between our country’s investing strategies and why Australian investors are lining up to buy U.S. property.
This week’s February event is information-packed. You will learn how the wealthy & wise structure a tax-free retirement with a self-directed Roth IRA or Solo 401K. Plus, we will also have a tax expert show you how to save thousands as a small business owner and real estate investor. Also, John Taylor will give an update on the highly successful Network Capital private lending fund.
Hope to see you there!
Kathy and The Real Wealth Team
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Financing
If you have been considering buying income property, you have until April to lock in artificially low interest rates. Low interest dramatically increases cash-flow.
We have been told that the lenders in Birmingham, Indianapolis and Dallas can finance up to 10 properties! Get a free quote from one of our preferred lenders
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The Market
The National Association of Realtors last Thursday reported existing home sales were up 27.2% for the last three months of 2009 versus a year earlier. This amounted to a seasonally adjusted annual rate of 6 million homes. — a 13.9% increase over the third quarter’s annual rate of 5.29 million homes. Clearly, buyers are taking advantage of the low mortgage interest rates and the tax credit that was extended and expanded by Congress. Both these government stimulus programs are slated to end in the Spring.
The existing home sales increase from Q3 to Q4 occurred in 48 states and D.C., with 32 of those states showing double-digit gains. Year-over-year, sales were higher in 49 states and D.C., up by double digits in all but 3 states. And distressed property made up just 32% of Q4 sales versus 37% of sales a year ago. The national median price of an existing single-family home, at $172,900, was down 4.1% year-over-year — but that was the smallest price decline in over two years. Even better, out of the 151 metropolitan statistical areas studied, 67 of them showed a RISE in the median home price.
Today’s majority of loan defaults are from prime borrowers, rather than sub-prime that dominated the market last year. Some say recent price increases may be a reflection of higher priced REO’s on the market.
Tags: Existing Home Sales, Financing, Interest Rates, Market Indicators, Tax Credit
Posted in Uncategorized, Weekly Wealth Report | No Comments »
February 2nd, 2010
There Are Four Key Demographics That Will Affect the Future Housing Market. Read more below.
We are expanding! Real Wealth Network now has it’s own meeting room. This space is also available for your presentations and events. (RWN members will receive a big discount.) Call 925-280-2830 or email info@realwealthnetwork.com for details on room rental. The space holds 25-35 people and has a kitchen, bathroom, wifi, lectern, and 47″ LCD screen.
Our February event is information-packed. You will learn how to build wealth tax free with a self-directed Roth IRA or Solo 401K. Plus, we will have a tax expert show you how to save thousands as a small business owner (includes real estate investing expenses). And John Taylor will give an update on the Network Capital private lending fund.
Hope to see you there!
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Financing
The Federal Reserve Board announced again that “rates will remain low for an extended period” in their Policy Statement. This was good news for Bonds and home loan rates. But then we received further confirmation that the Fed’s Mortgage Backed Security purchase program will indeed end March 31st, 2010. This is bad news for Bonds and home loan rates. So what does this all mean to you? Get out of bonds and lock in low rates while you can!
If you have been considering buying income property, you have until April to lock in artificially low interest rates . Low interest dramatically increases cash-flow.
We have been told that the lenders in Birmingham, Indianapolis and Dallas can finance up to 10 properties! Get a free quote from one of our preferred lenders.
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The Market
A new report from the Urban Land Institute entitled “Housing in America: The Next Decade” by John K. McIlwain, points out four groups to watch for their impact on the housing market in the next decade: older baby boomers (55-64), younger baby boomers (46-54 years old), Generation Y (late teens to early 30s0, and immigrants.
The older boomers will reach retirement age this decade, though many will continue to work, both because they are healthier than their parents and because they need to rebuild their retirement savings. They prefer to move to urban, mixed-use, mixed-age centers closer to their children and grandchildren. This will transform suburban town centers.
“The younger boomers are facing flat incomes, lost equity in their homes and a smaller group of move-up buyers. The market for large suburban homes will be weak over the coming decade,” the report said.
Generation Y, people currently in their late teens to early thirties, are 83 million strong, surpassing the boomers in population. These “credit card kids” will likely rent for longer periods than their parents by choice or necessity as their incomes fail to rise, jobs become hard to come by, and they have large student loans to pay off. When jobs do pick up, that will create new demand for large numbers of starter homes at low prices on small lots. This may boost housing in the outer-edge suburbs that are affordable, compact and walkable, the report said.
Immigrants, legal and illegal, will also greatly impact the housing market. At an estimated 40 million, they make up about 13 percent of the population. Between 2005-50, immigration will have added 117 million people to the population: 67 million immigrants and 50 million U.S.-born children and grandchildren of immigrants, according to the report. The Latino population, in particular, will triple in size by 2050 to make up 29 percent of the total population, from 14 percent in 2005. Immigrants are 50 percent more likely than the native-born population to live in poverty. Their education levels are also lower and their populations are younger, slowing rates of homeownership.
Tags: Baby Boomers, federal reserve, Financing, Generation Y, Immigrants, Interest Rates, Market Indicators
Posted in Weekly Wealth Report | 4 Comments »
January 20th, 2010
Real Estate Outperforms Stocks. Read more below.
We have a unique opportunity that won’t last long. Our Birmingham team has 4 homes that can be acquired with only $1K Down. Appraised value is 25% higher than purchase price, and cash flow is over $200 per month with virtually no money down. You must have great credit and less than 4 mortgages. Please contact me directly for more information on this great deal.
Our February event is information-packed. You will learn about the new 2010 Roth rules from our preferred self-directed IRA company. Our speaker will also share some new tax laws that can save you lots of money.
Enjoy,
Kathy and The Real Wealth Team
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Financing
Interest rates are still in the 5’s, even for INVESTORS! If you have been considering buying income property, you have until April to lock in artificially low interest rates. Remember, low interest dramatically increases cash-flow!
We have been told that the lenders in Birmingham, Indianapolis and Dallas can finance up to 10 properties! Get a free quote from one of our preferred lenders.
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The Market
Monday’s S&P 500 Index closing price of 1,147 was at about the same level as in the summer of 1998. So investors who bought stocks 11 years ago are actually down by 25 percent, if you factor inflation.
Think of it this way. If you had invested $100K into the stock market in 1998, you’d have $100K today.
If you had bought a $100,000 property in Texas, you would have earned over $8000 per year in rental income after all expenses. You would have made approximately $88,000 more than the stock market – based on the cash flow alone. And since Texas housing has seen a modest 4-6% gain every year since then, your property value might have even appreciated $44,000- $66,000 – just enough to keep ahead of inflation.
And if you used leverage, you could have bought 5 homes with 20% down that cashflowed $200 each – $1000 monthly cash flow. You could have used that cashflow to pay off one of the homes by now. So today you’d own one home free and clear, 4 others half-way paid off, and over $1600 in cash flow per month.
And, you would have been able to write off over $3000 per year per property along the way. Not a bad deal.
Tags: Financing, Interest Rates
Posted in Uncategorized, Weekly Wealth Report | 1 Comment »
January 8th, 2010
Happy New Year! As you probably know, our new website is finally live. Some of the new features include a search for the topic you want, an interactive blog, and more user friendy design. Let us know what you like and what you want added.
We hope to see you at our live event next week when our Dallas team shares the latest data and information on Texas- January 13/14.
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Financing
Interest rates are still in the 5’s. If you have been considering buying income property, you have until April to lock in artificially low interest rates. Remember, low interest dramatically increases cash-flow!
We have been told that the lenders in Birmingham, Indianapolis and Dallas can finance up to 10 properties! Get a free quote from one of our preferred lenders.
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The Market
I have been invited to speak to a group of over 1000 investors in Australia next month. I am thrilled at the chance to visit the land “down under,” and discuss my favorite topic: the unprecedented deals here in the U.S.!
I must say, reading the promotional material for the event was very revealing. Basically, the world sees the U.S. as an empire in meltdown, and now as a prime opportunity to swoop in and buy a piece of America.
The declining dollar makes the purchasing power of the Australian dollar twice as good as it was. And with property values down 50% in many areas, the cashflow is quadruple what it was.
Several of the Aussie investors had already bought in the U.S. during the peak, and even then said the deals were better than anything they could find in their homeland. But now, the cash-flow is so good, they are aggressively seeking credit lines and pooling money to pick up as much U.S. property as they can.
So… the moral of the story is that sometimes we don’t know how good something is when we see it everyday. It just becomes normal to us. But one thing the Aussie’s wish they could get is some of that cheap American financing. But alas, that’s only reserved for us.
To Your Wealth!
Kathy Fettke and The Real Wealth Team
Tags: Dallas, Financing, Interest Rates, Mortgages
Posted in Weekly Wealth Report | 1 Comment »
January 8th, 2010
If U.S. financing were not available to you, how could you get your hands on some funding anyway? Think like an Australian. They are willing to put 50% down while paying over 8% and 6 points to get a loan.
Who do you know who’d like that kind of return as a private lender, knowing their money is secured to income property? Private financing may be all around you.
One of RWN’s team members gathered a group of colleagues and they pooled their IRA funds to buy Dallas property. 2010 will be another year of unprecedented deals. Don’t let it pass you by.
Tags: Financing, IRA Funds, Private Money Investing
Posted in Investor Tips | No Comments »
December 28th, 2009
Is it time to buy in Phoenix, Vegas, Florida or California?
We get calls on a daily basis of members asking if we think it’s time to buy in Phoenix, Vegas, or in parts of Florida and California. My answer is that while there are some great deals, you’ve got to be very careful. Every available index is showing red hot risk in those areas.
The top guys at Realty Trac and Foreclosure Radar tell us that defaults are way up from last year, yet NOD’s (notice of defaults) and foreclosures are way down. How is this possible?
It’s quite simple. Banks are playing a popular Wall Street game called, “Pretend.” If they don’t report NOD’s, they don’t exist. This creative accounting shows profits are up! They can pay back the TARP money, give themselves fat year-end bonuses, and attract investors.
As a result, foreclosure inventory in the high foreclosure areas is oddly low. Buyers who mistakenly believe lack of inventory means the market has turned are making multiple offers over asking price. Nothing could be farther than the truth in the bubble markets.
Linear markets, on the other hand, are stabilizing. We can earn high cash flow in these areas while enjoying stability. After 2012, we may start to see a return to normalcy in the bubble markets and can possibly consider a 1031 exchange at that time.
Tags: California, Defaults, Florida, Foreclosures, Phoenix, Vegas
Posted in Investor Tips | 2 Comments »
December 24th, 2009
It’s Happy Holidays at Real Wealth Network! Our new website is finally live. Some of the new features include a search for the topic you want, an interactive blog, and more user friendy design. We will continue to improve this new site so that you can have access to more data at your fingertips. Meanwhile, please let us know if you have any suggestions.
It’s the season of giving. As our Holiday gift to you, we’d like to offer you a complimentary 2010 Planning Session, either live or via phone. Sign me up for more info!
May you enjoy real wealth this week, spending quality time together with your loved ones. What could be richer than that?
To Your Wealth!
Kathy and The Real Wealth Team
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Financing
Last week, the Fed reconfirmed once again that their Mortgage Backed Security (MBS) purchase program will end on March 31, 2010. This program helped keep home loan rates low for much of the last year. This means that interest rates will likely increase in Q2 of 2010.
If you have been considering buying income property, you have until April to lock in artificially low interest rates. Low interest increases cash-flow! We now have conventional finance back in TX. Get a free quote from one of our preferred lenders.
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The Market
November’s housing data is in and it speaks for itself. Here are the highlights:
12 Month Change in Payroll:
AZ: -6.9% T
NV: -6.0%
CA: -4.6%
FL: -4.4%
TX: -2.9%
OK: -2.7%
DC : -0.1% (plenty of govt job growth)
% of Subprime Loans in Foreclosure
FL: 32%
NV: 24%
CA: 19%
AZ: 18%
OK: 9%
TX: 6%
% of Prime Loans in Foreclosure
FL: 9.6%
NV: 7.5%
AZ: 4.7%
CA: 4.4%
OK: 1.6%
TX: 1.1%
Growth in Housing Prices
NV: -22%
FL: -18%
AZ: -12%
CA: -7.9%
OK: 1.3% (price gains!)
TX: 1.7% (price gains!)
PMI’s risk index for Q3 shows that CA, AZ, NV and FL are still the riskiest markets with the highest probability of price declines over the next 2 years.
TX and OK show low risk with little probability of price declines over the next 2 years.
Posted in Weekly Wealth Report | 3 Comments »
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