Too Much Debt

Do you know anyone who is struggling with too much debt?  If you do, I know something you should tell them TODAY.  Unsecured debt can be significantly reduced and the balance can be paid off at ZERO percent interest.  For example, if your friend were to owe $100,000.00 in credit card debt…and many people do, they could have that debt reduced to $40,000.00 and make arrangements to pay that balance off at ZERO percent interest.

Is it better to pay $100,000.00 at 30% interest, or $40,000.00 at 0%?  I suppose it depends on the ability to pay.  If your friend can carry the debt load at normal bank rates and pay the 30% off quickly enough, they’ll be fine.  Most people discover that $100,000.00 (or perhaps even more) at 30% interest rates will take a very long time to pay off. I know.  They signed on the dotted line.  They promised to pay back the borrowed money.  Things just didn’t work out that way so far.  The credit line has dwindled.  The resources to just cover the interest grew and grew.  Maybe they missed a payment.  When someone misses a payment the friendly bank commonly jacks up the interest rate on the entire credit balance.  They also reduce the remaining credit line to “reduce their losses” it seems.  When the credit line is reduced and the interest rate jumps up to 30% or even more in some cases, your friend will be buried by the bank.  Not exactly a friendly banker picture, right?

Fortunately, the United States does not treat debt as a crime.  We really do have options.  The credit card company might offer a reduced interest rate and lower payments while you get back on your feet.  Keep in mind that this is after you’ve been run through the ringer.  They’ve already made several annoying phone calls and told you to pay (the call frequency can reach several calls in a five minute period).  It’s amazing sometimes how much the bank is willing to work with someone to keep them buried in credit card debt for a very long time….after they’ve jacked up the rates and cut off the credit line.

The best options for credit card debt ARE NOT the ones the credit card companies are offering to people with too much debt (SURPRISE!).  The best opportunity is NOT credit counseling.  It’s NOT bankruptcy in most cases.  Credit card debt can be handled much better using debt resolution.

Bankruptcy NO – Debt Resolution YES

Debt resolution is the process of negotiating with the bank to reduce the credit card debt.  It also removes many of the blemishes from the credit report.  You and your friend can take advantage of a clean slate much more quickly when the balance remaining is paid off at 0% interest.  Every nickel that is paid toward the debt is actually going toward the debt, not the banks interest…at 30%.

BAILOUT FOR WHOM?

The banks got their bailout.  Most of them are swimming in money provided by government bailouts.  Debt resolution is one way that YOU and your friend can be bailed out.

Imagine having NO credit card debt.  The freedom of being debt free can be yours much sooner than you thought possible.

Sign Up Today

There are several things I’m asking you to do.  Sign up for debt resolution by clicking here.  If you need it, you can sign up for credit repair by clicking here.  Our legal team will assist you or your friend to have much less debt and a significant improvement in the credit score.

CLICK.

It’s very easy to get started.  It does have a cost, but the cost is significantly less than paying off that credit card debt at 30%.

Real Estate Tip:

Be debt free as soon as possible.  Sign up for debt resolution.  You might not need debt resolution, but you can sign up for credit repair to make serious improvements to your credit score.  Tell your friends to sign up TODAY.  Those heavy debt burdens can be significantly reduced more quickly than you thought possible.

          

Lenses

[It’s been a little while since I’ve made an entry in my blog.  My commitment to spend a specific amount of time each day has been challenged a bit.  Time to get back to the project then.  It’s always a pleasure to hear from you. – Byron]

One of the themes I’ve spent quite a bit of thought on is how our expectations affect our results.  You get out of life to a great degree what you expect.  But expecting someone else to act in a particular way can cause trouble.  You might have noticed this too.

Expectations color life

Sometimes we speak about a person who sees life through rose colored glasses.  Spending some time thinking about this, I agree.  Some people do see life through rose colored glasses.  Others choose to see life through much darker colored lenses.  Reality is a combination of our view of life and of what happens to us.  Our expectations determine to a great degree what our results will be. 

I expect to succeed.  I make plans to do successful projects.  Not every project goes as planned.

Two Choices

With every experience in our life we have two choices.  We can grow through the experience and become better, or, we can resent the experience and become bitter.  Most events that happen to us are neutral.  Our response to each event is what brings us joy or sorrow.  We choose whether to be thankful about every event that happens in our life.  Will I be thankful that I had food to eat today, whether it’s the food I prefer, or perhaps not?  Will I grumble when my amazing blessings don’t quite measure up to the mythical Jones’ blessings?  The choice is mine.

Real Estate Tip:

Complaints Go Here

All the complaints must fit in that tiny little box up there.  If they don’t, they’re too big.  Stop complaining.

Thanksgiving Goes Here:

The space below is where all of the thanksgiving goes.  There is more than enough room for a thankful heart.

          

The Best

Who is the best in the world at what you do?  It is a very important question.  If you’re not the best at what you do, why not?  What will it take to become the best?  Is mediocre good enough?  Who wants mediocre?

Nobody starts out being the best in the world at anything.  It is important to continually hone your craft and skills to the point that you can be the best.  When you invest more in yourself than you do in your job, the return on investment (ROI) grows and grows until you have significant achievements.  If all you do is the bare minimum to get by, you won’t.

Grow Up

It is essential that you and I take responsibility for exactly where we are right now.  We are who we are EXACTLY because of the DECISIONS we made OURSELVES.  Nobody else on the planet is responsible for our results.  If we don’t have enough to get by, it is because of decisions we ourselves have made.  If we have more than enough, it is because of decisions we ourselves have made.  It is increasingly annoying to listen to people who believe with all their heart that somebody else is responsible for their problems.  Victim Talk will get you nothing but more of the same.

Since nearly everything that we believe is essentially a made up story, why not tell a positive story?  I am making progress.  I am learning and growing every day.  My time is well spent because I invest in myself.  I know more today than I knew yesterday.  I haven’t quit on myself.  I believe that even when I encounter a setback, I will grow through the experience and become a stronger better person through the experience.  I am confident that God has a purpose for my existence that I don’t yet fully understand.  Today I just might discover the purpose for which I was made.

Purpose

Without purpose, nothing is accomplished.  Vision and goals follow the purpose we set for our lives.  Learning and focusing on our purpose hones the purpose.  We either choose to live on purpose, or chaos will rule.

Real Estate Tip:

Define your purpose.  Spend as much time as you need to clarify the purpose you set for your life.  Avoid wasting time and money that distract you from your purpose.  If Real Estate is part of your purpose, then include that as part of your purpose and goals.

Remember that GOALS come AFTER.  Purpose comes FIRST.

          

Elephant in the Corner

Don’t think about the elephant in the corner…

Have you ever had a problem focusing your attention on a solution to the big problem over in the corner?  An example might be the mortgage payment that is getting later and later.  Maybe you have missed payments.  The goal really isn’t to avoid being late on your payments.  The real goal is to have and make money to keep the payments current.  But the elephant in the corner keeps dragging you back over.  “You have late payments,” might be the message you keep saying and hearing inside.  The opportunities around you to make a big paycheck are being drowned out by that nasty elephant that just won’t go away.

What You Focus on Expands

If you focus on the elephant, the elephant grows to be the biggest thing in your world.  Solving the problem becomes nearly impossible because the elephant is getting all of your attention.  When you try your hardest to not think about the elephant, the elephant is all you think about.  Each person creates the inner peace or discord that flows out into the world.  We cannot create peace if our inner world is full of conflict, hatred, doubt or anger.  We radiate the feelings and thoughts that we hold inside, whether we speak them or not.  Whatever is going on inside of us spills out into the world, creating beauty or discord.

Unfocusing the Elephant

So what about the elephant?  Every effort to NOT think about the elephant results in more elephant thoughts.  The only way to unfocus the elephant is to focus on something else.  Progress can only be made by focusing on the things that bring progress.  If we focus on NOT failing, we’re focusing on failure.  If we focus on SUCCESS, we can move away from the failure we wish to avoid.  The mortgage can be paid when the funds required to do so are generated by successful ACTION.

Real Estate Tip:

Don’t focus on what you don’t want.  In other words, you MUST focus on the things you want to accomplish in your life.  Failure is not an option, though sometimes it seems a pretty big elephant.  SUCCESS.  To your SUCCESS!

          

Better Investing

I mentioned yesterday that it’s possible to invest your money and get better than bank rates of return on your money.  Most people are not aware of the options available so I thought I’d go through it a little bit more today.

If you’ve got money in a savings account right now, check the rate of return you’re receiving for that money you have “invested” there.  Is it higher than 1% ?  I’m betting it’s even lower than 1%.  Recall the rule of 72. 

The Rule of 72

The Rule of 72 states that if you divide your interest rate into 72, the result will be the number of years it will take your money to double at that rate of return.

72 / 1% (let’s be generous) in the current savings account  = 72 years.

Many people don’t have 72 years to wait for their investment money to double in value.  Let’s check out the CD (Certificate of Deposit) rate of return that is currently being offered.  2.99% (there might be a few places you can beat 3%, but right now 3% is pretty competitive.

72 / 3% = 24 years for this rate of return to double in value.

Bank Rates of Return

The rate that banks offer is nearly always lower than the current rate available.  There are only two exceptions.  If you lock your money into a long term investment and the prime rate changes significantly during that period of time, you might beat current rates.  Back in the late 1970’s you could lock your money into a 3 year CD at 15% or a little more.  If you put your money in right before the rates dropped significantly, you would benefit from the lock and make more than you could in some other investments.  The other exception is a long term mortgage that is locked low before an inflationary period.  The bank is getting less interest because they locked the rate low.  Most of the time you won’t get a great return from the bank because the bank understands the time value of money better than you do.

Banks Don’t Make Loans

Tried to borrow money from the bank recently?  Even if you have perfect credit and solid employment history, banks just aren’t doing it like they used to.  You might be able to borrow money, but the bank will scrutinize you far more carefully and require that you jump through significantly more hoops today than they did a few years ago.  Naturally, they’re smarting from the decisions they made a few years ago and should be more careful.

Carefulness affects Rate of Return

Since the bank isn’t making loans and collecting interest on their money like they were several years ago, they can’t offer good rates on the money you have in savings and Certificates of Deposit.

Alternate Banking

During times when banks are not doing their job the way we prefer, an alternate bank becomes more prominent.  Private investing bypasses the traditional bank.  If I need to borrow funds to do a project and my banker won’t loan me money right now, I can borrow the funds from you, my private investor.  You have money sitting in an account that is earning 1-3%.  I have a project that will generate a healthy 6-10% return.  If I borrow funds from you for a Real Estate project, your investment will be protected by the equity in that Real Estate.  When the LTV (loan to value) ratio is favorable, your investment backed by a first position Mortgage or Deed of Trust keeps your investment dollars safe. 

Let’s take another look at the property I mentioned yesterday:

If you buy a property for $3,500 and repair it for $5,000 you have invested $8,500.  Next you rent the property for $500 per month.  What is your cash on cash return for this investment?

Cash flow (annualized) / Cash invested

($500 * 12) / $8,500

$6,000 / $8,500 = 70.58%

Is that better than your CD investment at the bank?

You might prefer to spend a little bit more on the property than $5,000 to get it rented.  If you do, you can still easily see that a rate of return higher than 1-3% is more than possible.  Let’s say you spent $10,000 to repair the property because $5,000 just wasn’t enough:

Cash flow (annualized) / Cash invested

($500 * 12) / $13,500

$6,000 / $13,500 = 44.44%

Is that better than your CD investment at the bank?

How many years does it take to recoup your cash investment?

72 / 44.44 = 1.62 years

Maybe you’re not too keen on owning property in Cleveland, Ohio?  Why not partner with an Investor who manages the risk and just write you a check?  Not all of the great returns are in bad areas.  Your local Real Estate Investor can provide you with opportunities that far exceed the rates your bank and retirement fund are currently offering.  If you don’t have a local investor to work with contact me.  I can help you put your investment dollars to work in either long term or short term projects that will benefit both of us.  Some projects are as short as 24 hours.  Others can be several months to several years.

Real Estate Tip:

1. Get yourself lined up with private investors who need you to help them get better returns on their investments.  If you have money sitting in a poor quality investment, consider moving it into a self directed IRA or 401K as soon as possible.  Make your money work for you.
2. After you have done a few short term transactions with your funds, consider the kinds of cash flow opportunities that are available to you through Real Estate.
3. Contact me if you have any questions.  I can help you.
4. There are many kinds of Real Estate investments.  Very short term investing can have ZERO risk if you work with an Investor who understands them.  The equity that protects your investment is a cushion that keeps your money safe.

          

No One Lives Here anymore

What happens when too many homeowners default on their mortgage?  After the bank kicks out hundreds of families in a neighborhood, there end up being more vacant homes than those that are occupied.  This causes a number of serious problems.  First, while the bank has “protected” their investment by taking back the collateral, by emptying hundreds of homes, the value of each home diminishes significantly.  Vacant boarded up homes in any neighborhood cause blight and reduce the value of every home nearby.

Decimated Neighborhoods

Have you ever driven through a neighborhood that is decimated because of high vacancies?  It’s a scary place because empty homes draw crime.  Houses that don’t have occupants often have copper stripped out.  The water pipes are probably gone.  The air conditioner coil is probably missing.  The A frame in the furnace is also missing.  The furnace itself might be gone.  Drug houses are easy to establish when…no one lives here anymore.

Home Package

I was called today with information about a package of 100 homes for sale in the Cleveland Ohio market.  Each home is vacant and has been vacant for some time.  The houses have all been through foreclosure.  They are available for sale in the package of 100.  The price for the entire package is just slightly over $300,000.  If you do the math, each home is just over $3,000.  If you want to buy a new home for $3,000 please contact me.  I guarantee that you can’t build a house for the price of purchase and rehab.  Making each home inhabitable for rental will cost between $5,000 and $25,000.  Imagine buying a new home for less than $30,000 that originally sold for almost $100,000.

Cash Flow Properties   vs.   BANK rates of return

If you buy a property for $3,500 and repair it for $5,000 you have invested $8,500.  Next you rent the property for $500 per month.  What is your cash on cash return for this investment?

Cash flow (annualized) / Cash invested

($500 * 12) / $8,500

$6,000 / $8,500 = 70.58%

Is that better than your CD investment at the bank?

Even if the house were vacant for a couple months or had a few added expenses, your return on investment is astronomical compared to the bank.  Naturally the rate of return for each investment property depends on the numbers for that specific property.  Some properties need more than $5,000 of repairs to be rented.  The coolest thing about this kind of investment is that you don’t have to be the person responsible for renting out the properties.  Management can be hired to seriously simplify the process of collecting rents, improving the property and keeping the property occupied.  If you are interested in this kind of investment, please contact me.  I can help you manage this kind of investment.  Managing the managers and making the system work for you.

If are an investor and you partner with several other investors or even several dozen investors, you can radically change the blight of a neighborhood and make the property worth significantly more money in a fairly short period of time.  Perhaps you would prefer to own an entire neighborhood and have it managed for you.

Real Estate Tip:

Did you realize that you can radically change the quality of your 401K or IRA.  You can use your retirement money to invest in the improvement of a neighborhood.  Collecting rents inside your self-directed IRA is a great way to massively improve the returns going into your retirement.  If you don’t have a self directed IRA and want more information, I have a fantastic Self Direction recommendation for you to check out.

          

Let’s Do It

I had a serious ah hah today.  At least I think I had one.

One of the biggest things that holds many Investors back is, oddness.  Your family and friends look at you like you’re an alien.  They tell you what you’re trying to do won’t work.  You don’t have very many people to talk to that really get what you’re trying to do.

And, that is the ah hah.  If you don’t find someone that can understand what you are doing, your likelihood of success is seriously reduced.

REIA

How can an Investor stay connected with like minded people?  Your local REIA can provide opportunity to meet other like minded Investors.  These opportunities to interact are extremely helpful in keeping track of what is going on in your local market.

Seminars

Many Investors spend a great deal of time and money going to seminars.  One benefit is that many like minded people gather to learn about some aspect of Investing.  It is possible to go to many seminars and never do any Real Estate deals.  This tendency is because the Investors don’t stay connected and working together to get deals done.  Certainty and confidence come from experience.   When we join together to get things done, we become much more able to do the business.  Doing leads to success.  Action is the only thing that will make success possible.

Joint Ventures

One of the best ways to gain confidence is to work with someone who’s been there before you.  We start off with the belief that “giving away” half of the profit of a deal is a bad deal.  It isn’t.  Giving away half of any completed deal is keeping the half you probably couldn’t have done alone.  There are thousands of Investors out there who have more experience than you do.  These Investors can help you make intelligent decisions so you can move forward.  Having more than one inexperienced brain working through the details of a project, provides a much better chance of success.  If you, with no experience, attempted the same deal, there might not be a profit.

Mentorship

Every Investor who specializes in education will tell you that nobody succeeds in this business without a mentor.  When they say this, they generally are selling a mentorship program.  These programs can be very helpful.  However, without one-on-one personal interest and contact, I have experienced several “mentorships” that are less helpful.  The personal involvement of a Joint Venture and an in-person team greatly increases the likelihood of success.

Real Estate Tip

Find a partner or close friend who understands what you are doing.  Learn things from them that you don’t understand.  Teach them things that you do understand.  Share knowledge and experience.  Make your team wealthy in knowledge, experience and cash.

          

Press Release: 5-Day Sale

Contact: Byron Watts

507-319-5788

FOR IMMEDIATE RELEASE

 Local Investor Causes a Stir

–Selling His House in Only 5 Days.

ROCHESTER, MN—Sep. 17, 2009—Byron Watts, a local Real Estate Investor is causing a stir in Rochester.  Tired of waiting for his house to sell the normal way, he took matters into his own hands.

“With so many houses for sale in the area, it was hard to get my house noticed.  I had to find another way to let people know about it.” 

Watts spent the past few days posting notes on over 300 homes near the 3815 5^th St NW Country Club Manor home.

“You might have seen a note on your door.  I want to make sure everyone in the neighborhood knows about this opportunity!  Everyone should come out to take a look at this great house.”

Two convenient open houses are scheduled.  Check out the house at 3815 5^th St NW Saturday afternoon from one to four and Sunday from one to four pm.  Learn more about the house and make an offer in the 5-Day Sale.

More information is available at:  www.byron.com/3815.

###

          

Dear Realtor

I am working with a team of Investors and funding sources focused specifically on more expensive homes.  When owners are getting behind on payments and face the threat of imminent foreclosure, there is ONLY one option.  Sell the house.  Avoiding foreclosure is very important for all sellers.  The embarrassment of losing a house to the bank can be avoided in most cases.  Banks strongly prefer a short sale over foreclosure.

I understand there are some concerns about representation with your clients.  Under normal circumstances, representing the seller and getting the highest and best price is the goal.  In an imminent foreclosure situation, the primary goal is to get the house SOLD and avoid foreclosure.  Anything less is a failure of fiduciary representation.  My team is very good at negotiating away all deficiency issues.  We cannot guarantee this, because we can’t control what the bank does, but very often we are completely successful in negotiating a full satisfaction of mortgage on behalf of our sellers.  With this in mind, the actual purchase price with the bank is not a significant issue with a short sale.  The amount that the bank accepts is still disclosed to the seller and they sign off on the final HUD.

Normally I would ask you to introduce me to the seller in person.  Since I’m currently not able to travel to every market that I work in, it is more difficult for this step to take place.  As you know, the information required to submit a short sale is very private.  I will probably never meet the seller[s].  The information they provide to me is private, but since I don’t know them, they don’t have to be embarrassed that someone on their street has all their private information.  I honestly don’t personally need to see a short sale package.  However, the bank is notorious for losing documents and requiring submitting the short sale package numerous times.  It is essential that this information is available for resubmission so that the bank negotiations are not delayed.

My team requires that we do our own negotiation.  We put the house under contract directly with the seller.  We always relist the property with you, unless there is a reason that you choose not to be or are unable to be the listing agent.  In this way, we can give you a full commission.  Since the agreement you have on the property is with us, you aren’t dependent on what the bank will provide as the commission.  They try to negotiate away the commission.  We always offer a full commission and that commission does not depend on the amount authorized by the bank.  We have done thousands of short sales on luxury homes in all 50 states and are looking for excellent agents to work with in your market.

I’m building a relationship with you that will include multiple transactions.  The incentive for me to do a good job and get the house sold is very high.  If things go poorly, it is very unlikely that we will be able to do multiple deals.

Looking forward to doing multiple transactions with you!

Byron

507-319-5788

          

Obstacles

“If there are no obstacles between you and your goal, it probably is not a goal at all, merely an activity.” – Brian Tracy

Interestingly enough, this very entry in my blog ran into Obstacles.  I got busy and distracted.  One of my biggest projects today was doing some carpet cleaning in my home.  The carpet is much nicer looking now, but this blog entry had to wait for me to get back to it.

Now, where was I…

Obstacles are the things that interrupt us and seem to stop us from moving toward our goal.  The baby starts crying in the middle of our much needed sleep and we get up to feed and care for her.  The food our family eats doesn’t prepare itself…someone needs to cook it.  Laundry unwashed and stacked in piles is far less useful seems like an obstacle getting in the way of other “more important” things.  If our lives are less organized than we need them to be, obstacles appear more frequently.  Our disorganization increases the number of obstacles in our way.  The tool you didn’t put away last time you used it is now very hard to find.  This makes the next project more difficult to accomplish because half of the time available is used up looking for tools.

There are other more significant obstacles also.  The nagging thought in my head that says I’m not good enough to get the job I want is a significant obstacle in my job search.   What I believe about myself stands as a testimony about what I can and will achieve.  When I think I am insignificant or useless, my presentation suffers.  People around you and I will believe the messages they receive from us.  Valuable, or not.

Change Your Mind – but how?

I believe that I am a significant valuable person created in the image of God.  My only judge is the God who made me for a purpose.  My job is to pursue my God and find the purpose, the very reason He created me.  I also believe that when I was born, I was fatally flawed.  My ancestors made a very poor decision when they chose to disobey God who told them the only thing they really needed is a relationship with Him.  Adam and Eve chose to believe a lie:  “God is not good.  He is hiding the truth from you.  You can be like God knowing good and evil.”  Evil we have come to know far too well.  The key problem is that by learning evil, we’ve lost the ability to know good.  The only way we can get back to knowing good is by knowing God.  God provided the only way that we can know good by offering to us a gift that removes the fatal flaw.  Redemption.  Only God can forgive us for our rejection of Himself.  The only redemption available is for God Himself to take upon Himself the consequences for our rejection of Himself.  He did that.  John 3:16 Do you believe?  Once the fatal flaw is removed, we can move forward with confidence that God our Heavenly Father has completely and totally forgiven us through the blood of Jesus Christ, God Himself.  Being totally forgiven makes us totally free to pursue God and His plan for our life.  Is that plan to be wealthy?  Maybe.  Perhaps not.  The freedom to grow and to change and to love gives us the strength to overcome the obstacles we face every day.

Quit or Win?

If you set a goal for yourself to swim across the English Channel and only swim half way, did you win?  Better hope for a life boat to pull you out of the water if you choose to quit.  If you set a goal, make sure you are also making the commitment to complete the goal.  Don’t quit.

DON’T QUIT

When things go wrong, as they sometimes will,

When the road you’re trudging seems all uphill,

When the funds are low and the debts are high,

And you want to smile but you have to sigh,

When care is pressing you down a bit

Rest if you must, but don’t you quit.

For life is queer with its twists and turns,

As every one of us sometimes learns,

And many a failure turns about,

When he might have won if he’d stuck it out.

Success is just failure turned inside out,

The silver tint of the clouds of doubt.

And you never can tell how close you are,

It may be near when it seems so far.

So stick to the fight when you’re hardest hit,

It’s when things seem worst that you must not quit!

-          Anonymous

Success is closer that you think … if you just don’t quit.

Real Estate Tip:

Adjust.  When things don’t go quite the way you expected them to go, make sure that you adjust early if changes are required.  Waiting till later almost never works very well when the market shifts and we go from a hot market to a cold one.  Your strategy needs to change.  Your funding sources need to change also.  Buying and holding Real Estate works very well in a cold market, if you have a funding source available. 

Did you know that investing in Real Estate in a cold market can be far more lucrative than in a hot market?  If you have money in a bank account collecting 1% interest, team up with a local investor who can get much better returns on your investment.  Owning a mortgage on cash flowing properties can provide significant returns in a slow economy.  Providing funds for the investor to do business solves the investor problem of a funding source.  Providing homes for recently displaced home owners who have been through foreclosure solves the housing problem for that family.  Buying the property at newly reduced prices solves the problem for both the Investor and the Bank who really can’t hold on to a property.  Win – Win – Win – Win – Win.  Contact me if you need more information on buying a mortgage and getting your money to work for you.