Friday, August 31, 2012

Real Estate Expert Robert Irwin Says "Buy Real Estate NOW!"

My friend, Dan Auito just published what he calls the Real Estate Encyclopedia of 2011.  The actual title of the book is "Be a Real Estate Heavyweight: 95 Experts Show You How".  Amazingly, he published it all as a pdf and has given it away FREE.  Really.  You don't even have to give up your email address to get this from him.

I got it late yesterday.  Dan cautioned me that it is not the kind of book you sit down and read through.  Rather, he told me, it is a reference volume where you look in the the table of contents to find the topic you need to read up on and then you go to that section.

After perusing the table of contents, I came back to the Introduction, written by Robert Irwin.  I have five books written by Robert Irwin about real estate finance on my bookshelf!  The guy is a legend and one of my business heroes.  I have learned more about how to approach creative financing from him than almost all my others sources combined.

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When I read his introduction, I thought that he must have written it for this blog.  He even references lemons.When I read Robert's intro, I thought, this is exactly what I have been telling people for a while now.  Perhaps they will actually listen if they hear it from someone else as well.

So, I have excerpted a portion of the introduction and share it here with you (my emphasis added in places).  So, without further ado, listen to the wisdom of a true real estate heavyweight, Mr. Robert Irwin.

As Dickens wrote, it is also the “best of times,” so, too, are there great opportunities. I’m speaking, of course, of real estate investments. For those with the gumption to make lemonade out of lemons, there’s never been a better time to invest in property.
The U.S. population is growing by about 3 million a year. That’s an enormous rate of increase and all those people need some place to live. That means that hidden beneath the falling prices is a huge pent-up demand just waiting for a stable market to unleash itself.
Further, and something every investor should pay special attention to, is the ratio between housing prices and rental rates. (After all, the lifeblood of real estate investing comes from rental income.) The traditional relationship between rental income and housing prices is about 20 to 1.
During the housing bubble that lasted roughly between 2000 and 2006, that ratio went as high as 33 or 34 to 1. Rentals are once again approaching the “magic”20-to-1 ratio.
Perhaps most important of all, the price of housing has reached its long-term trend line. If you were to chart housing prices from the end of World War II through today you would see a saw-tooth generally upward trend (at about 5 percent a year), then a huge spike up that was the housing bubble, and a dramatic pitch downward, that is today’s slump. But at the end of that slump, you would see the trend line just where it’s supposed to be as if the bubble hadn’t even come along….now, they are roughly where they should be, given 70 years of history.

[educated stock investors call this the “support” line. TS]

For the investor who has the foresight and the gumption to see clearly when others are lost in the fog, this can be the best of times. Once again it’s possible to buy property at a reasonable price. Finally sellers are willing to negotiate reasonable terms. Once more, you can step in and make money—potentially big money—by buying low, holding, and eventually selling high.
I cant tell you when, but I firmly believe that in the future real estate prices will not only return to their former highs, but will exceed them! I believe that those who have the courage and foresight to act when the market is down will reap enormous benefits when it eventually turns up.
Its all well and good to get enthused about making your move into the real estate market when its down. But how do you learn the mechanics of doing it? Where are you going to find out how to get the financing you need, learn to determine true values, uncover the location of suitable properties?
You cant just look at the rules of the past. Time has moved on and the rules have evolved. Whats needed is a strong resource to give you the information you need to make an informed investment. What you need is a guide to todays opportunistic real estate market.
Robert Irwin
So, now you have heard from more than one person. I have been saying for some time that NOW is the time to invest in real estate.  If you wait until the newspapers say it is the right time, ALL the smart money will be moving out of it by then.  NOW, you are hearing it from an expert who has been doing this for most of my adult life.

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I have 5 immediate investment opportunities available here in North Carolina, right now! They are solid investments producing steady cash flow.  If you aren't ready or willing to become a landlord, no problem.  You can make your money work for you as a private lender.  You get a first lien position secured by a deed of trust on the property and you get a steady check each month while someone else deals with the headaches of tenants, toilets and termites.

However, if you are ready to get the greater rewards that come with the greater risks of being a landlord, you can buy any of these 5 properties and, based on current cash flows, anticipate a 10% return on your money right now.  When the market turns up and everyone else thinks it is a great time to buy, you can sell these properties to those wannabe investors and make a very nice profit while they take on the risks of being a landlord.

If it is so great, why would someone sell these units?  The answer is simple, the seller doesn't WANT to sell. He WANTS to hold on to the units and work with a private lender to create a win-win solution.  But, since he has some personal debts that MUST be settled NOW, he is willing to SELL, take on a partner, or guarantee a private loan.

If you would like to know more about these opportunities, contact me directly (, but you better do it FAST, because these deals will not be available very long.  The good ones never are.

I have been successfully investing in real estate in the Charlotte area since 2001.  I have weathered this financial chaos because of the common sense rules I use for investing.  If you are looking for a guide to help you take advantage of today's real estate market, look here.  Be warned, my experience and knowledge is not FREE.  I paid dearly for both my knowledge and experience and I cannot afford to give them away to anyone.  Besides, if I gave them to you for FREE, you wouldn't value what you received.

If you would like your own copy of Dan Auito's amazing, FREE encyclopedia for real estate, just follow this link.

Robert Irwin is one of Americas most respected experts in all areas of real estate and the author of more than 60 books in the field. His Tips and Traps series for McGraw-Hill have sold millions of copies. He is a real estate broker, contributing editor to numerous magazines, and reliable leader for investors, home buyers, and sellers.

Tom Sheppard is the author of "Fire Yourself: Get the Job You Want" available from XLibris Press. Tom has been successfully investing in real estate since 2001 while working part time. In 2008 he left a six-figure job as an enterprise project manager with a major national bank to manage his real estate business full-time. His goal is to help 100,000 people find peace of mind by finding quality, affordable homes. He is currently looking to expand his network of funding partners who are helping him achieve this goal. If you would like to know more about how you can Do Well By Doing Good (TM), go to

Thursday, August 23, 2012

Why is Seller Financing NOW Such a Great Deal?

"No brag.  Just fact."

"No brag.  Just fact."  Those are the words Will Sonnett used after telling folks that he was better with a gun than his notorious fast-gun grandson in the old ABC series "The Guns of Will Sonnett."

It is no secret.  My specialty is using seller-financing to buy and sell homes.  I do it better than most people and know more about it than most of the real estate "gurus" (aka notorious fast-guns) who are touring the country today. No brag.  Just fact.  More on that later.

Whether you are buying or selling, using seller financing is probably the best possible way today to buy or sell a home.

Today, we are facing a perfect storm in the housing market - one that makes seller financing ideal.

#1 - There is a lot of inventory.  There are vacant houses in almost every neighborhood in the country.  In addition to the houses that are currently on the market, there are many more where the owners are in default and the banks are holding off on foreclosure because they don't want the houses on their books.  This "shadow inventory" ensures that there will be a steady supply of cheap houses for some time to come.  Because as the current inventory is bought up, then the banks will move forward with their foreclosures against those who have not been paying and who are currently getting a free ride.

#2 - The banks are in financial distress and uncertainty.  They have lots of non-performing loans, foreclosures and REOs (Real Estate Owned by the bank where the foreclosure process has been completed) on their hands. Every one of these non-performing loans (where people aren't paying) and REOs are forcing the bank to maintain much higher reserves than normal.  With the drop in home values, those reserves are often close to 100% of the value of the home.  And the bank cannot use reserves to fund operations, make loans, or even to pay depositors. 

Adding to this financial strain is the uncertainty caused by regulators and changes at Freddie Mac and Fannie Mae.

At any moment, regulators may reinstate "Mark to Market" rules which would have the effect of making nearly any bank today become instantly insolvent.  The result would be bank closure and being taken into receivership by regulators.

Freddie Mac and Fannie Mae, currently in receivership by the government, are being managed out of the housing market by degrees.  They have been forced to raise their standards for loans they will buy from banks and if they buy a loan and it goes bad, they immediately force the bank to buy it back from them at full value.  This means that banks can no longer shift risk to taxpayers via Fannie and Freddie.

#3 - The banks are not lending very much at all.  Oh sure, they advertise that they have low rates and some even advertise programs for people with 650 FICO (credit scores).  But the reality is that they are only making loans either to prime customers (700+ FICO) or to those low income customers who can get a third-party loan guaranty from places like NACA (Neighborhood Assistance Corporation of America, famous for their byline "Sue My Lender."

So, you have lots of houses available, but no money to buy them.  

For the seller that means that there aren't many buyers out there, because most people don't have $10,000 in cash on hand, much less the $60,000 to $200,000 it takes to buy a home without getting a bank loan and there are lots of sellers trying to get the attention of those few buyers.

For the buyer this situation means that although you can see lots of available homes for sale, you cannot buy any of them because the bank won't lend you the money.

Seller Finance is the Solution to this double-bind.

When you sell your home using Seller Finance you are basically relieving the buyer of the need to get a loan from the bank.  You are letting them use your loan and pay you for some of your equity over time.  When all goes well this has three great advantages for you as a seller;
  1. YOU SELL YOUR HOUSE NOW! - The buyer takes over the payments on your current loan so that you don't have to keep making those payments.  That will free up your cash to pay for your new home.  You can now move on with your life instead of living in deadly suspense waiting to either default on your current loan, being unable to move to your new home and job, or leaving behind a vacant house for vandals to destroy.
  2. As the buyer makes the payments on your home loan, they are actually strengthening your credit record.  They loan is still in your name, so every payment they make, your credit rating is being bolstered.
  3. You may be able to collect payments above and beyond your loan payments, recapturing some or all of the equity in your home that you had to give up in the pricing to compete with all the other homes for sale in your area.

When you buy your home using Seller Finance you will probably pay a premium.  The interest rate you pay will likely be significantly higher than the rates the banks advertise for the mortgages they aren't really going to give you.  The contract price for the house will likely be higher than for similar houses in the area.  That is because the prices on the other houses represent what the sellers are hoping to get from an all-cash buyer or what they must have to pay off the loans on their home.  Regardless of the premium and increased price this can be a GREAT deal for the buyer.
  1. YOU GET THE HOME YOU WANT NOW! - Buying your home using seller finance avoids all the expense, hassle and delays that come from the banks' lending and underwriting processes.  You don't have to wait 60 days for someone to appraise the home while a loan officer is looking at your personal financials through a microscope, making you explain every financial transaction for the past six months (or more) while making you hope that your car doesn't need a sudden $300 repair that could make the bank decide to restart their financial due diligence on you.
  2. Buying now gets the lowest price you will see in the foreseeable future. The market price of homes today is the lowest it has been for more than a decade.  Currently, the housing market is bouncing along its bottom.  It will continue to bounce along like this for another couple of years and then values will begin to rise.  In some places they will rise rapidly, in other markets more slowly, but they will rise.  When they do, the value of your home will go up.
  3. Your house payments may go down when you refinance in a few years.  For the sake of argument, let's say that you buy today with seller finance and are paying 10% interest.  When the banks start lending again the rates will they charge will probably be higher than they are right now.  Let's say they go from the 3% range they advertise today to 7% (a 130% increase over today).  Because you already own you home, you will be asking them to refinance.  A refinance loan is less risky and less costly to the bank, so they are more likely to offer one of their best rates and a loan with the lowest administrative costs (origination fees, appraisals, etc.).  And, since you have been paying down the loans on the house, the amount of money you need is less than when you did the seller financed purchase.  This, coupled with the increased value of the home should make your loan even less risky for the bank.   Regardless, when you refinance at 7% you will save $3,000 per year in interest for every $100,000 of home value.  And, if when you bought using seller finance at a payment point you could actually afford, then the new payments will be even easier on your budget and your quality of life will increase a lot simply because of the eased finances.

"No brag.  Just Fact."

I told you near the start of this article that I know more about seller financing than most of the real estate gurus touring the country right now.  Here is why I say that is a fact, not a brag.

Not long ago I spent four days in a seminar with one of these leading gurus as he was teaching "advanced topics" for real estate investors.  I found that it was a good review of what I already knew, but didn't cover some of the emerging issues in seller finance.

Did you know that the government is trying to make it illegal for you to use seller financing to sell your own home?  Under the guise of financial and mortgage reform the so-called SAFE Act and other laws they are trying to regulate this option out of existence.  They tried to make it illegal, but they got too much push-back from too many people like you and me.  So instead, they said you couldn't do more than so many seller-finance deals in one year and you had to comply with their mortgage regulations.

If it is so great, why is the government trying to kill seller financing?

The answer to that question is simple.  Banks don't like seller financing.  They don't get a piece of the action. When you buy or sell a home using seller financing, you are legally robbing the bank and you are not doing anything unethical or immoral.  The bank wants to have a stranglehold on buying and selling homes because home loans are one of their most lucrative products.

When you get a bank loan to buy a home you typically pay thousands more in closing costs than you would with a similar seller-finance deal. In addition to the interest you pay the bank for using their depositors' money (it isn't really the bank's money at all), they layer in all kinds of fees to fatten their bottom line.
  • Origination fees are typically about 1% of the amount being financed.
  • Points used to buy down your interest rate can go as high as 3% of the amount financed.
  • Document preparation fees are "gimmes" the banks use to cover the costs of printing and signing documents (costs that are already being paid for under their ordinary operating expenses)
  • Overnight fees are charges for next-day delivery of documents.  Although they occasionally use an overnight service, often they use their own internal couriers (again already paid for in their ordinary operating expenses) and when they do use an external service the actual cost is usually significantly lower than the "Overnight Fee" you pay them.
  • Appraisal Fees usually have little or no relationship to the actual cost the bank pays for an appraisal.  If they can get by with it, they will have a bank employee do a "drive by" appraisal (sometimes done without ever leaving the office).  If they have to get an outside appraisal, chances are high that they have negotiated a low, volume price from the appraiser or they own the appraisal company.  Either way, the figure you see on the closing documents is usually significantly more than what the bank actually paid.
  • Real estate agent commissions - okay, the bank doesn't get these, the real estate agents do and they usually amount to from 3% to 6% of the purchase price of the home.  With seller-finance deals real estate agents are usually unnecessary.  In fact, at times they are a huge threat to the deal.  The threat can arise because their commission may eat up the down payment a buyer has, or it may be because the agent doesn't like or understand seller-finance because it doesn't fit with the bank-financing model that agents were taught in school.  If you are trying to do a seller-finance deal (buying or selling) and a real estate agent is involved, then don't try to weasel out of the contract - pay them what you owe.  But, if you don't need to get them involved, then don't go using an agent to buy or sell a seller-finance deal. The exception is when you have agents like those I deal with.  They understand seller-finance and know how to facilitate these kind of deals.  But they are exceptional agents.
These fees, taken together can easily amount to nearly 10% of the purchase price of a home.  These fees suck up the money a buyer has for a down payment and take profit out of the seller's pocket.  A seller finance deal, done right, will save both the buyer and the seller a lot of money.

What About Those Regulations You Mentioned?

Banks spend hundreds of millions every year to comply with all the regulations our government imposes on them.  In fact regulations often keep many financial companies from becoming banks, making the costs of doing business too high.  Recently, our regulations have even begun to cause some foreign banks to quit doing business with US banks - they can't afford the costs of showing that they are complying with all our regulations.

The government, in collaboration with banks, has been steadily escalating the regulations on mortgage brokers and seller financing for the past several years.  They have successfully destroyed most mortgage brokers in this country, driving them out of business by the costs of showing their compliance with complex and confusing regulations which change frequently.

Today, most seller finance deals that are done are illegal and if the seller wanted to foreclose on the buyer, they would be unable because their contract would be unenforceable in court.  

Fortunately, my attorney is a very experienced real estate investor.  Because of that, he has a vested interest to stay on top of the seller-finance regulations and the expertise to understand them.  So, he does all my seller-finance contracts and closings for me.  That way, I can be sure to keep inside the law whether I am buying or selling using seller-finance.  In addition, we use a process that has successfully gotten nearly every bank to accept the take-over-payments approach without invoking the "due on sale" clause in the mortgage.

Seller Financing is GREAT and You Need to Know What You Are Doing

If you want to save money buying the home you want with seller financing or sell your home fast using seller financing, it is entirely do-able.  You need an attorney like mine as well as the kind of knowledge that I bring to the table.  You can either do what I did, spend years learning how to do this right and struggling to find an attorney who actually knows real estate law, or you bring your business to me and we will work together to create a win-win solution.  You can reach me at Although my focus is on properties in the Charlotte area of North Carolina, through my network I can help buyers and sellers almost anywhere in the US.

If you would like to know more about Seller Finance, A+ Results has just published "Seller Finance for Sellers: The Ultimate Guide" as a downloadable e-book.  Seller Finance For Sellers Link

Tom Sheppard is the author of "Fire Yourself: Get the Job You Want" available from XLibris Press. Tom has been successfully investing in real estate since 2001 while working part time. In 2008 he left a six-figure job as an enterprise project manager with a major national bank to manage his real estate business full-time. His goal is to help 100,000 people find peace of mind by finding quality, affordable homes.  If you would like to know more about how you can Do Well By Doing Good (TM), go to

Wednesday, August 15, 2012

My Dad Didn't Die and You Benefit

A few weeks ago I got a phone call.  They told me my Dad was dying.

I dropped everything and rushed across the country to see him and be with my family.

The good news is that they were wrong.  Dad didn’t die.  In fact, this Sunday he will celebrate his 87th birthday!

In celebration I have decided to offer everyone I know a gift.  In fact, it is a gift you can re-gift to others and still use it yourself.   All you have to do to get the gift is go to and buy one or more of the ebooks there and enter the coupon code DADS87.  You will then get 30% off your entire order.

Why 30%?  Well, I always thought Dad might live to be 100 and there are 13 years from 87 to 100.  So I thought I couldn’t afford to give and 87% discount so how about 13%? 

I looked at it and said to myself, “Really?!! Who cares about 13%?  Besides, some might think 13 is unlucky.  So, I doubled 13 and got 26%.  I looked at that and said to myself, “Who gives 26% off?  They either give 10%, 20%, 25%, but I didn’t want to round down.  After all, this is celebrating my Dad’s 87th birthday, so I rounded up and came up with 30%.

30% off is a pretty big discount, especially considering that it applies to the entire order, not just one item.  Although I couldn’t add any of the coaching packages, I did add my “Tired Landlord” self study guide to the list.

I hope you’ll take a few minutes out of your day and celebrate my Dad’s birthday with me by going to and checking out the titles I have offered up in this sale.

Birthday’s don’t last forever and neither does this coupon.   It is good for one time, but you can pass this email or the coupon code on to someone else and they can use it one time as well.  And, it expires at the end of this month.  If you try to use it on September 1, it won’t work.

So, go now to and place your order.  We recently enabled the site to accept both PayPal and all major credit cards.  As soon as you pay, you will get an email that will enable you to download your purchase.  If you have any problems with the coupon code or the site, call me (704-699-6080) or send me an email (

Celebrate my Dad’s Birthday and take 30% off your order today!  Don't forget to use the code DADS87.

Tom Sheppard is the author of "Fire Yourself: Get the Job You Want" available from XLibris Press. Tom has been successfully investing in real estate since 2001 while working part time. In 2008 he left a six-figure job as an enterprise project manager with a major national bank to manage his real estate business full-time. His goal is to help 100,000 people find peace of mind by finding quality, affordable homes. He is currently looking to expand his network of funding partners who are helping him achieve this goal. If you would like to know more about how you can Do Well By Doing Good (TM), go to