Sunday, March 30, 2008


Why become a better Negotiator? The answer is SIMPLE !!

When you improve your negotiation skills and techniques, you will gain the ability to increase your value in every aspect of your life simply by increasing the effectiveness of your communication skills. Contrary to popular belief negotiators are not born, they’re made through real world training! Here are just 10 reasons for you to improve your negotiating skills, especially in these uncertain financial times…

1. Improve personal and professional profitability.

2. Achieve desired outcomes.

3. Maximize financial returns, while creating the edge in negotiations.

4. Avoid being cheated or ending up on the short end of the stick.

5. Out smart and maneuver around difficult negotiators and their tactics.

6. Enter into every negotiation whether in person or on the phone with confidence.

7. Know when and how to walk away from a negotiation, while leaving the door open to future negotiations.

8. Learn to get to the No’s, before you get to the Yes’s.

9. Turn every cultural, economic differences into assets rather than liabilities.

10. Earn a six figure income on a part time basis by using your negotiating skills.

For the next 10 blog posts I will expand on each one of the above reasons, which will take your negotiating skills to the next level!

Be well,

James Gage

Saturday, March 22, 2008

Question of The Week: Lease Options and Repairs

I received a question from one of my mentoring students today, so I thought I would share my answer with you my faithful blog readers.

The question was this “can we, as lease purchase investors require our tenant/buyers to repair items that break or need maintenance during their option period?” The simple answer is Yes; if you structure it properly! The reason this question came up is that my student went to his local REIA club meeting, and heard an attorney say it was illegal to do so. It is only illegal if you include such language in the traditional residential lease, but since we are sandwiching the property, we always use 2 contracts – an option, and a residential lease. Within the confines of the option agreement we place language that states that repair/maintenance issues of x amount are the responsibility of the Optionee, and in order for them to be able to exercise their option down the road they must agree to the language of the contract. If they default they not only lose their option consideration, but they are on the hook for the repair and eviction procedures could follow.

I hope this was useful information.

James Gage

Thursday, March 13, 2008

Would You Like To Know Why Lease Options, AKA Rent to Own Are Excellent For Real Estate Investing?

By James Gage

As the real estate market evolves and changes, there are fewer mortgage loans available and fewer people who qualify as the factors for qualification become more stringent. Having less than perfect credit puts, a cramp on the ability to obtain the necessary financing for a traditional home purchase, but that does not mean that fewer people want to settle into a home and become a homeowner. Real estate investors are learning that they can benefit from this situation and make a profit by offering nontraditional means of obtaining a home to those with credit that is not well established or is less than satisfactory to a mortgage lender.

Lease options, aka rent to own homes, are a great source of income for the creative real estate investor who wishes to make money while helping those who cannot get into a home with their own credit to realize their dreams of owning a home. Lease options work much like a leasing a vehicle, only on larger terms. It benefits the tenant buyer who cannot obtain a mortgage to purchase the home by offering them the opportunity to build their credit and make the choice to purchase later while also assisting the investor by maintaining an additional source of income for the duration of the lease period.

When a car is leased, there is a nonrefundable deposit paid to the dealership that equals a percentage of the car's value. This is also done in a lease purchase or rent to own agreement and is referred to as the Nonrefundable Option Payment, securing the tenant buyer's ability to choose whether or not to purchase the home at the end of the lease contract agreement. As with a vehicle, there is a lease contract signed in which the tenant buyer agrees to make a payment of a certain amount each month for a predetermined length of time, usually 12 months. This can be done in a manner that includes payments to be credited toward the purchase of the house or not, depending on how you want to set up the lease.

Finally, at the end of a car lease, the driver has the option to finance the remainder of the "balloon payment" owed on the vehicle in order to purchase it or to turn it back over to the dealership. In real estate, when working with a rent to own or lease option contract, this is referred to as the Option to Purchase contract, in which the tenant is given exclusive rights to purchase the real estate property without you offering it to the highest bidder first without obligating them to purchase when the lease is up.

If the option contract was signed so that the payments made during the lease period were credited toward the purchase of the home, the tenant buyer will need to obtain a mortgage loan equivalent to the remainder of the purchase price originally agreed upon. If there were no rental credits, the tenant buyer will need to obtain the entire purchase amount.

Lease options and rent to own housing are excellent ways for a real estate investor to make a lot of money because there are three different sources of money coming in, all of which add up to a sum greater than the original investment by far. You put little money into the purchase, and in exchange, you receive an up-front payment, monthly installments, and finally a purchase payment equal to an amount greater than you paid. I structure all of my deals so I get paid at the beginning of the deal, the middle of the deal, and at the end of the deal – what more could an investor want !

Monday, March 3, 2008

Dave Ramsey Part 2 : Horrible Advice

Hello All:

I was hoping not to re-visit this subject again, however, I received a phone call from a fellow investor (Darlene M.) who received some real bad advice from Dave Ramsey’s radio program.

First, let me state I’m going by what she told me and I am basing my comments on the substance of the phone call to me, but I can tell you that I strongly disagree with what Mr. Ramsey teaches – more about that later.

Darlene explains that she called Dave’s radio program to refute what he has been saying on his radio program about now is a “great time to buy a house”. She did get on the radio to ask the pointed question, but as soon as she asked the question, Mr. Ramsey became angry and coarse, and stated anyone with a half of brain can see what great opportunities are out there for home ownership! What a great posture for a national radio personality to take when the general public calls in with a request for help and clarification, Darlene said she decided to take Dave’s advice and by a house (pre-foreclosure) 3 months ago, and since that time she has lost 5 % in value!

She read my back issues on my blog and noticed I was not a fan of Dave’s, and have clearly stated for the past 15 months that you should not be buying anything in this market, rather you should be using leveraged strategies such as lease options for investments and personal residences.

That being said, and being fair to Dave Ramsey, Darlene did not elaborate on the details of the deal that she did, so we can not bash Dave Ramsey if she got into a bad transaction on what she perceived to be his counsel. However, when it comes to the generic advice of “now is the time to buy real estate” – in the words of Dave Ramsey “have you been living under a rock”?

We have only seen 1/3 of the foreclosures that are going to happen according to financial pundits and Federal Reserve. In addition, these foreclosures have caused increased housing inventory forcing property values to sink 15-20% from all time highs. My question to Dave would be, what do you think is going to happen when the other 66% of people facing foreclosure comes into view? Can you say another 30% downward progression, and if you buy now as Dave suggests, you will be in a upside down property and be forced to stay in said property for the next 10- 15 years, while the market tries to gain value.

The other problem I have with Dave is on his investing advice! After becoming debt free, by the way this is the only thing I agree with him on, he encourages people to invest in mutual funds. Are you crazy Man!!! Have you seen how our dollar has been devalued? In 2002 the Euro was at .88 against the dollar, today the Euro is 1.51 against the dollar – you do the math!

Our country is being bought up by foreigners, who look at the US stock market as a flea market due to the strength of their currency; they are literally gobbling up everything in site. By the way many would say that a weak US dollar is good for our economy and will bring foreign investors in to buy our products, thus helping to stabilize our devastated economy. My question to those folks is – what products? Last time I checked the US didn’t make anything anymore; we have been referred to as a service based economy which subs everything out oversees.

OK, many would say that I’m jealous of Dave Ramsey because he has a successful radio program and I have a blog. Nothing could be farther from the truth. I just want people to stop drinking the cool aid and start listening to the voices of reason, whether that be me or someone else, who can document and substantiate what we preach!

So what’s my take? The only way you should be in the stock market is with stock options. If you’re stuck in the market due to company related 401 Ks, consider moving into a money market fund or precious metal fund – gold has tripled in the last 5 years and is almost $1,000 dollars an ounce. Look into become a leveraged investor in the Forex trading market – leverage at it’s best if you do not have those restrictions mentioned above. And of course, become a short term investor through lease options, and assignments with short sales and probates.

In the words of Forrest Gump;” that’s all I have to say about that”.

Be well,

James Gage

Saturday, March 1, 2008

Article of The Month : Probate Investing

Probate Investing Made Easy !

To make money in real estate you need an advantage over your competition, especially if you are looking for whole sale deals. So why not just eliminate them! Now I don’t mean you need to go out and create a bunch of probate by whacking all your competition. What I do mean is that you need to play real estate the same way I would like for my favorite team to play baseball—move to another stadium. What I mean is that you need to go looking in hiding places that nobody else is looking in to find those hidden treasures. That is where probate comes in. I’ll never forget when I was interviewed by a local television station in Florida on my course, Probate Investing Made Easy, at the probate courthouse. The reporter asked me how much competition there was at the courthouse. As the camera panned around the room, there was nobody else in the whole office except the two ladies who worked there.

First, let me explain some things about probate. A statistic that may shock you is this: 100% of Americans will die. That’s right, according to the Center for Disease Control, about 2.5 million people will die each year (are tax dollars hard at work).

Now here is the thing about that statistic. 70% of those folks will die without a will. Even more important is that regardless whether you have a will or not, your estate will go through probate. The only way to avoid probate is to have your estate in an entity. But ask yourself this question. If so few people even have a will, how many people do you think will put their assets in an entity? To give you an idea about how huge that is, of all the cases coming in to the court system, 24% will be probate cases. In Boston, MA in 2003, there were more than 6000 probate cases. In Worcester, MA in 2006 there were about 4500. Many of those cases had real estate involved. That is where you step in. Most people don’t want to work this market because they think it is morbid. It is not morbid. The estates that I have worked with have been some of the most appreciative people I have ever worked with. I will never forget the lady that thanked me for buying her mom’s house at fifty cents on the dollar; which by the way I immediately flipped for a nice profit.

So why do all of these estates go through probate? The government requires it for a few reasons. First, the state wants to make sure that the assets are divided according to the will. And if there wasn’t a will, then the state takes care of that too. Most states have heirship succession laws in place that says which relatives get what percentage of the estate. The other reason that the law requires estates to be probated is to let any creditors who may have an interest in the estate know that the person has passed away and the creditors will need to file in order to get paid from the assets of the estate. The final reason that the law requires the estate to be probated is that the tax man wants to be paid. It has been said that the only two certainties in life are death and taxes. With probate they both apply. Not too long ago the federal government made some changes to estate taxes that remove most people from getting taxed. But the local governments still want to get paid either estate taxes or property taxes. By forcing the real estate in to the probate courts, the government makes sure they get their fair share.

Your challenge is to find some deals in probate. You can see from the facts above that there can be a lot of motivation with people dealing with an estate in probate. By far, the easiest way to find the deals is to send some marketing to probate attorneys. There are better and faster ways, but I had to write a whole manual to explain those techniques. I simply can’t fit them all here in this limited space. In some states, you can even get pre-printed labels for probate attorneys from you state bar association. That way, half your work is already done. Now you just need to come up with a good letter to send them.

Now you know why you really need to be working the probate market, and you know a great shortcut to the market. All you need to do is go out and put it to work!!

Happy Investing!!

James Gage has been investing in Real Estate for more than 20 years. James is the author of Probate Investing Made Easy, in order to help investors- both new and seasoned-to get a leg up on their competition by finding deals in a niche area that nobody else is looking in. The website is It is our sincere desire that everyone who wants to get in to real estate investing will succeed beyond their wildest dream. It is our mission to help them get there. “Discover the Power of Two !”™