Wednesday, September 24, 2008

Creative Real Estate Investing: How to Landlord In A Down Market?

Hello All:

I get this question on a regular basis so I thought I would post it for all to view!

Q: I want to be a landlord, but I'm afraid to do so in this market. What is your advice to me?

A : My advice is don't, but if I can't change your mind do the following:

1. Buy the income property 35% or more below fair market value.
2. Put only Section 8 tenants in those dwellings or other state/federal like programs. Why? In a market/economy we are currently experiencing and with more job losses to come, you must make sure you have an uninterrupted stream of rental income from your properties to prevent you from becoming a statistic. When and if our economy turns around then you can think about going back to renting to the general population.

I hope this helps with those of you who are thinking of landlording.

Be well,

James Gage

Tuesday, September 23, 2008

Creative Real Estate Investing: Is The Bailout Going To Help The Real Estate Market?

In the words of Larry Birkhead ( Anna Nicole's ex boyfriend) " I told you so!!!
I have been shouting from the roof tops to investors for the past 24 months on the financial tsunami which would hit our economy; not only did I call the sub prime market, but I also said that after the banks started bleeding, this crisis would expand the into the insurance industry- this has happened as we have seen in the past several weeks. But what now?

The government is proposing a 700 billion dollar bailout, which at the end of the day will be more like a couple of trillion dollars with all the pork trimmings that the politicians can think of putting in. Correct me if I'm wrong, but these are the same politicians and administrators that got us into this mess in the first place, and now are asking for unrestricted, unsupervised card blanch with our takes dollars to fix what they created in the first place - " I was born at night, but not last night!"

As many of you know I am a Conservative Independent, so I don't have a horse in this race or in the present administration, but I know something has to be done. That being said, I don't think this bail out is going to solve the problem; in my humble opinion it has a 25-30% chance of success!
In the short term we may see some temporary signs of possible improvement, but this will be erased when this tsunami spreads to the credit card and unsecured loan industry, followed by the home insurance industry, followed by the market sustaining a severe correction, which will finally result in the dollar being at par with the Peso!

But in all this bad news there is light at the end of the tunnel ! Keep investing short term with lease options, and in the stock market play puts and calls on the indices on the giant move swings we have seen in weeks gone buy. Pay down or pay off your mortgages if possible and start putting an emergency fund aside if you haven't already done so.
Finally, look at buying silver to hedge against any possible unforeseen disaster; gold is to high but silver is a great value at the time of this post.

Be well and stay leveraged.

James Gage

Saturday, September 6, 2008

Real Estate Investing : Question About Land Trusts

Good Morning:

I received a question this morning concerning my last post on land trusts, so I thought I would post it with my answer for the benefit of all my faithful blog readers.

Be well,

James Gage

Q: Do we have to have an attorney represent the trust in case of any legal disputes or can we represent properly the land trust in California?

A: It depends on what the legal action is about. For example, if it's an eviction then the trustee can defend or bring the litigation to the court on behalf of the trust. If on the other hand it is a civil or criminal action against the trust I would use an attorney to represent the interests of the trust; keep in mind the engaging of an attorney on behalf of the trust is a responsibility of the trustee.


Friday, September 5, 2008

Real Estate Investing: Reasons to Use a Land/Realty Trust

1. Avoids property being probated (out of court transfer upon death of beneficiary)

2. Ease of Transferability

3. Judgments do not attach to the beneficiary

4. No Partition (avoids spouse’s “forced share” sale buyout upon divorce)

5. Easier management with multiple owners (multiple owner do not have to sign docs)

6. No costs upon transferring beneficiary

7. No registered agent needed

8. Legal and Equitable property interest in trustee’s name (never be in the "chain of title")

9. Income and Expense conduit, not a business with tax consequences

10. Trustee has no personal liability

11. No annual fees like other entities, if trustee is an individual or friend

12. Estate planning benefits – automatic successor beneficiaries

13. Less expense with grantor creating the trust entity

14. Avoids the due on sale clause (lenders never know what happened)

15. Privacy of ownership (no recordation of the Trust Agreement) Helps avoid Identity Theft of your name

16. Keep sales price private

17. Able to fracture interests of multiple owners without being "partners"

18. Ease of linkage to other asset protection entities

19. Non-judicial repossessions of real estate sold on installment contract

20. 1099 not required for transfers (personal property not subject to real estate regulations)

21. Ease of operating across state lines

22. Lots of case law to support land trust administration

23. Many attorneys do not study this section of the law – not profitable for them (yields a competitive advantage)

24. No recordation of the Trust Agreement

25. No tax return to file (pass through entity)

26. To avoid “seasoning” problems (secondary market rules of ownership)

27. To save title insurance premiums (Trustee-insured-remains the same)

28. Good negotiating technique in the sale or purchase of property (Disney World used land trusts to acquire its property prior to avoid price escalation)

29. To provide non-recourse financing

30. Lowering of real estate taxes (prevents re-assessment)

31. Avoids state regulations that apply to corporations and LLC’s

As you can see, Land/Realty Trusts are a wonderful tool for you to use to hide your assets, avoid real estate tax increases, privatize your sales transactions, avoid probate and use for many other benefits. Now that you have a basic understanding of why people use Land/Realty Trusts, please consider acquiring our Land/Realty Trusts Made Easy Home Study Course. You will be amazed at the logic behind how to structure your Trust Agreement so no one but YOU understands what is going on.

At the end of the course we give you all of the forms needed to create and maintain your own Land/Realty Trusts on 1 CD, and we have even included 2 DVDs on how to file out the trusts page by page and line by line - this will save you thousands of dollars in legal fees. As a bonus you will receive on CD Oxford's Law Dictionary.

By the way, I want to let you in on a secret! When attorneys put together land /realty trusts for their clients they hand over your information to a paralegal who uses a computer program (that only attorneys have) and 20 minutes later you have your document. And sense I have a legal background as many of you know, I have this software which I use for creating my own trusts, and now I am making not only my knowledge and expertise to you, but also these very valuable trust documents. So please take time out of your busy day to visit my web site.

This is available by going to: clicking on “Investing Tools” then clicking on one of the “Package Deals” tabs.

Are you working hard to acquire your assets? You will spend a life time building your financial estate…spend a little time and

money learning how to protect your net worth from the deadbeats and their contingency fee lawyers!

Please visit our website at You can read even more about Land Trusts and how they benefit you.

Be well,

James Gage

Thursday, September 4, 2008

Real Estate:U.S. House Price Decline Could Be Worse than Great Depression, Economist Says

Hello All:

This head line just crossed the wire, and did my e-mail box get flooded with nervous investors! Hopefully they will read this blog post, because to answer all of them I would certainly get carpal tunnel syndrome.

I want to put every investors fears to rest and state here for the record : "every negative, brings with it a positive!"
I have said numerous times on this blog I think we are at least 24 month away from a bottom to this cycle. That being said, I would not be purchasing property now unless you can obtain it for 35% under fair market value, or in the case of rental property, you need a big positive cash flow of at least 40% debt to profit ratio.

Or, you can do what I do and use lease options to invest! If the deal and or the market goes against you, you can escape without financial harm to your investment portfolio!

To your success,

James Gage

Wednesday, September 3, 2008

Real Estate Investing: Abatement of Real Estate Taxes

Hello All:

James Gage here with a real estate tip that may save you hundreds of dollars on a yearly basis on your property tax bill ! Many of you may say I already know about this, but my question is how many of you are taking advantage of this strategy on a yearly basis?

You see all communities offer what is called an " Abatement Process", that is, usually in January of each calender year, the city or town of where the property is located allows owners to petition the city/town government through the abatement process to lower said properties real estate taxes. You will have to call your local town hall or city hall and request an abatement form along with the proper time frame to file. When you receive the form you make a case on why your taxes should be lowered, such as value of the property in your opinion has dropped, what you purchased the property for is not what you could sell it for, the neighborhood as a whole has lost value etc...

It has been my experience that the powers that be will always allow some sort of decrease in taxation just for the mere fact that you took the time to file for abatement.

Hope this helps.

Be well.

Tuesday, September 2, 2008

Real Estate Investing: Question of the Month

Hello All:

This months question comes from Karey of Cooper City, Florida.

Q: Should I use an attorney on every real estate transaction?

Well that's the million dollar question that has been debated since the time of investing in real estate! Some very successful people say yes, and just as many say no to legal counsel. I am of the former! Since I have a legal background I can tell you hundreds of train wreck transactions that I have either been witnessed to, or at least once removed from.
Many people think since they have experience they can represent themselves, and yes I have seen some sharp individuals in my day, however, there is an old saying in law school " he who represents himself, has a fool for a client" !

When we invest in real estate 9 out of 10 times we are emotional involved with the transaction, and are prone to overlook or at the very least make excuses to bring a speedy resolution to a problem that shouldn't be hastily tackled. That's where a good attorney comes in- you noticed I said good. When searching for an attorney that will represent your best interests, always search out an expert who only handles real estate investing transactions! Contrary to popular belief all attorneys are not equal ! Only engage an attorney that dedicates their practice 100% t0 real estate; stay away from attorneys that have general practices and do a little of this and a little of that. Also, make sure you interview your legal candidate and see what their stance is on creative real estate investing, you want to make sure that they are open to this time of investing and like wise versed in the law concerning such transactions.

Before I get a ton of e-mails asking me about states that use title companies instead of states the using closings with attorneys let me end with this caveat.
Investors in states such as Florida that use title companies for their real state transactions are not exempt from my advice on the use of attorneys! However, any and all title companies have attorneys on staff for the real estate transaction rendering, so therefore they are in a large sense representing not only the title companies interest, but also your interest as far as the legal transfer goes. It should be noted that more and more individuals are starting to engaging their own attorneys in states such as Florida in addition to the staff attorney at the title company!

Why is that? Plain and simple most people residing in Florida come from states that use attorneys for closings, and most attorneys are now capitalizing on that very thing with their marketing dollars through the use of bill boards and other advertising materials through out the state.

That's my two sense on the subject.

Be well,

James Gage