The Blog of Trent Dyrsmid

My Blog has Moved

2009-07-02T13:28:00.000-07:00

My blog is now hosted at www.trentdyrsmid.com

Your comments are always welcome,
TRD

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Do you have a Roth-IRA earning less than 8%? Want to learn how to earn more than 8%, secured by local real estate? Visit www.InvestWithTrent.com to learn how.

Yes, you can purchase a home, no money down

2009-05-30T07:49:00.000-07:00

$8,000 First-Time Homebuyer Tax Credit Can Now Be Applied Toward
Purchase of FHA-Insured Home

Washington, D.C.--The U.S. Department of Housing and Urban Development
announced today that the Federal Housing Administration (FHA) will
allow homebuyers to apply the Obama Administration's new $8,000 first-
time homebuyer tax credit toward the purchase costs of an FHA-insured
home. According to Secretary Shaun Donovan, today's action will help
stabilize the nation's housing market by stimulating home sales across
the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a
tax credit of up to $8,000 for purchasing a first home. Families can
only access this credit after filing their tax returns with the IRS.
Homebuyers using FHA-approved lenders can apply the tax credit to
their down payments in excess of 3.5 percent of appraised value or
their closing costs, which can help achieve a lower interest rate.

"We believe this is a real win for everyone," says Donovan. "Families
will now be able to apply their anticipated tax credit toward their
home purchase right away. At the same time we are putting safeguards
in place to ensure that consumers will be protected from unscrupulous
lenders.”

Currently, borrowers applying for an FHA-insured mortgage are required
to make a minimum 3.5 percent downpayment on the purchase of their
homes. Current law does not permit approved lenders to monetize the
tax credit to meet the required 3.5 percent minimum down payment; but,
under the terms of today's announcement, lenders can now monetize the
tax credit for use as additional down payment, or for other closing
costs, which can help achieve a lower interest rate.

Buyers financing through state Housing Finance Agencies and certain
non-profits will be able to use the tax credit for their downpayments
via secondary financing provided by the HFA or non-profit. In addition
to the borrower's own cash investment, FHA allows parents, employers
and other governmental entities to contribute towards the
downpayment.

According to estimates by the National Association of Home Builders,
the Administration's homebuyer tax credit will stimulate 160,000 home
sales across the nation—101,000 of which will be first-time buyers who
will receive the credit. Another 59,000 existing homeowners will be
able to buy another home because their homes were purchased by first-
time buyers.

Read the press release...

Your comments are always welcome,
TRD

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Did you like this post?

Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Do you have a Roth-IRA earning less than 8%? Want to learn how to earn more than 8%, secured by local real estate? Visit www.InvestWithTrent.com to learn how.

Real Estate Buying Systems #1: More of the Basics

2009-05-24T10:08:00.000-07:00

In my last post, I talked about how door knocking can yield a great deal of information about a neighborhood. Having this knowledge is key to being the most informed buyer for that neighborhood.

In addition to collecting information, you need to create an identity as THE buyer of choice for that neighborhood. In marketing circles, this is called being Top Of Mind, or TOM, for short.

Being TOM isn't that hard to do, it takes consistency more than anything, combined with a little creativity.

For example; as you are door knocking, not everyone will be home, and, of those you do talk to, very few will actually be thinking of selling their house. For the ones that you've talked to, you've (hopefully) made a good first impression. For those that weren't home, obviously, you've made no impression at all.

In both cases, keeping in mind the goal of being TOM and being unique, here's what I do: I hand out fridge magnets that have a clear USP (unique selling proposition) and a call to action (something they need to do).

My USP is that I buy houses fast, and they don't have to pay a commission to work with me, I will buy the house as-is, and close within 10 days.

My call to action is a website link that is short (reduce chance of typos for them) and takes them to a page where there is a video of me giving the relevant message. Why video? Two reasons: one, it allows them to get a feel for my personality, and two; most people hate to read.

The reason that I use a fridge magnet is that is most people use their fridge as a family billboard, and therefore, giving them a magnet pretty much assures they'll be seeing my message several times a day, every day, for years.

In my next post, I'll talk about the way I target a certain type of seller and what I do to get them to call me.

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

Your comments are always welcome,
TRD

Do you have a Roth-IRA earning less than 8%? Want to learn how to earn more than 8%, secured by local real estate? Visit www.InvestWithTrent.com to learn how.

Real Estate Buying System #1: Start with the Basics

2009-05-18T16:58:00.000-07:00

There are a number of ways to find opportunities in Real Estate. Some of them are used by everyone, some of them cost money, so of them just take time.

If you are just starting out, you probably don't have much money, but I'll bet that you do have some time. The question then becomes, how are you going to invest this most precious asset?

If you want to be successful at something that others are attempting to do was well, you need to do things that others aren't willing to do. In other words, Successful buyers (or real estate) are willing to do what unsuccessful buyers aren't. For me, that means knocking on doors.

Knocking on doors doesn't cost a cent, other than your time; although, its definitely a good idea to leave something behind with both the people you talk to, and the people who weren't home (we'll call this breadcrumbs - as in your leaving a trail of breadcrumbs) when you came calling.

If you want to be a successful buyer, you need to be an expert in your market. You need to know what properties are selling, how much they are selling for, who's selling, what percentage of the street is renting, how much rent they are paying, what the neighborhood is like, etc... There is no other way to get all this information than to talk to the people that live there.

In the last two days, I've knocked on a total of 52 doors and that took me about 3 hours in total. Out of that, I've left 52 breadcrumbs and have uncovered 5 leads. For one of the leads, I've spoken to the seller at length, and, depending on the balance of their first mortgage, there could be a real deal there. The other leads were from neighbors telling me that this owner, or that owner was thinking of selling. Needless to say, those folks will be getting a letter from me.

In my next post, I will talk about my second buying system, so stay tuned.

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

Your comments are always welcome,
TRD

Do you have a Roth-IRA earning less than 8%? Want to learn how to earn more than 8%, secured by local real estate? Visit www.InvestWithTrent.com to learn how.

For those who think Entrepreneurs are just in it for the Money...

2009-05-15T08:37:00.000-07:00

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

Your comments are always welcome,
TRD

Do you have a Roth-IRA earning less than 8%? Want to learn how to earn more than 8%, secured by local real estate? Visit www.InvestWithTrent.com to learn how.

Financial Freedom - Check Your Brain

2009-05-05T08:48:00.000-07:00

In my conversations with others, every once in a while (ok, regularly), I come across people who have a clear disdain for money. The thing that is surprising is that most don't even know it.

You know these people. You may even be one of them.

They identify themselves to the careful listener by saying things like, "I don't care about money" or "I'm not motivated by money", or "money is the root of all evil".

Statements like this are a strong indicator that the person who's making them is poor as a church mouse. That doesn't make them a bad person, it just makes them a nice poor person. Why not be a nice wealthy person instead?

Did you know that the widely used "money is the root of all evil" is incorrect? The correct version, as found in the bible is, "the LOVE of money is the root of all evil" (1 Timothy 6:10). If you read the proverbs, you will see that they are pretty much all about money. Go figure.

Here's a few more red flags to watch out for:

"money doesn't grow on trees"
"what do you think we are, made of money?"
"Filthy rich"
"We can't afford that"
"Rich people are ________"
and and the best one of all, "Money can't buy happiness"

I am an entrepreneur not because I love money. I am an entrepreneur because I love LIFE and FREEDOM. Unless you live in the jungle, a lack of money will deprive you of freedom. I am so focused on creating passive income from assets, not because I love money, but because I love FREE TIME to spend with people who's company I enjoy.

Take away the passive income, and you've taken away my free time. Take away my free time and you're taking away from the quality of the relationships that I enjoy with my family and friends.

So the next time you hear yourself or someone you care about saying that they aren't motivated by money, maybe its time to dig a little deeper and explore what they (you) are really saying? Could it be that their (your) negative feelings about money are the #1 thing standing between them (you) and increased wealth?

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

Your comments are always welcome,
TRD

Do you have a Roth-IRA earning less than 8%? Want to learn how to earn more than 8%, secured by local real estate? Visit www.InvestWithTrent.com to learn how.

Believing is Seeing

2009-05-05T08:25:00.000-07:00

Last night I was talking at length with a very good friend of mine and his girlfriend. The conversation was about how important I thought it was for her to support him in his quest to get out of the rat race. As he is a very close friend of mine, I'm trying to assist him in whatever way that I can to achieve this goal, and having her support (they live together), I suggested to them, would be imperative.

During our discussion, we talked about "non-job" ways of earning money. In other words, ways that don't require you to go to work at a place you don't want to be, just for a paycheck. I went on to suggest to them that the journey from point A (job) to Point B (passive income from assets) was not going to be a straight line and that it would not be easy; however, if he stuck with it, I assured him that result would come.

She responded by saying, "seeing is believing".

Seeing is believing is a very normal response for 99% of the people on this planet. They want/need proof to know that something is real. Or do they? I asked her if she could "see" love, or oxygen, or a thought? She said that was different. I disagreed as politely as I could, but it stuck with me through the night that "seeing is believing" is exactly the opposite of the truth.

The other 1% of the world operating from a "Believing is Seeing" perspective. We first believe that we can accomplish something, and then we develop and plan and take actions toward that goal. How successful do you think Donald Trump, Mark Barnett, or Mother Teresa would have been if they did not first believe with all their soul that they could achieve what they set out to do?

How successful would Ghandi have been if he would a "wait and see" approach?

I suspect you know the answer.

In a recent weekend course on Financial Freedom, during day one, we were exposed to a number of ideas about achievable rates of return that were hard to believe. Our instructor encouraged us to not worry so much about that "how" and just put that aside for now. By day three, the how had been fully explained and the rates of return of 15-20% per year that many of us had thought unachievable on day one, were, we realized, quite achievable. Many of the veterans in the room were regularly making that, and more.

Do you think that you could ever have a hope of earning 15-20% (or more) per year on your money if you didn't believe it? How successful do you think you would be if you said, "I'll believe that is possible once I see it!" Let me just say that your odds of success would be slightly less than a snowball's chance in hell.

If you are to get out of the rat race, you must stop thinking like a rat. "Seeing is believing" is rat thinking. Enjoy your maze, you'll never get out.

"Believing is Seeing" is the key to success. Now go unlock the door!

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

Your comments are always welcome,
TRD

Do you have a Roth-IRA earning less than 8%? Want to learn how to earn more than 8%, secured by local real estate? Visit www.InvestWithTrent.com to learn how.

2009-05-05T06:34:00.000-07:00

I found the following data very interesting and worth of sharing. Notice how the Notice of Default (NOD) has increased, yet the foreclosures have decreased. What does that tell you? It tells me that banks "shadow inventory" (the inventory of foreclosed properties that they hold on their books but have yet to release for sale) is climbing like mad. With increasing supply, comes increasing opportunity for the savvy investor and qualified buyer.

The next few months will be interesting, to say the least.

Uploaded with plasq's Skitch!

A Life-Changing Weekend: Learning the True Meaning of Wealth

2009-04-19T18:24:00.000-07:00

If you'd asked me a few days ago to tell you what I thought was the definition of "being rich" was, I would have likely told you that it was a large net worth or a big monthly income.

I was wrong.

After having spent the last three days in a room with some very wealthy investors while taking a course on how to better understand money, I have now realized that the definition of wealth is quite different. Consider the following basic formula:

Cash flow from Assets (CFA) > Monthly expenses.

In other words, when income from your investments exceeds your chosen level of living expenses, you are wealthy. Pretty simple, huh?

In my first career as a stockbroker, I made lots of money every year. I also spent lots of money every year. I thought I was wealthy at the time.

In my second career, I founded a technology company that made me a millionaire on paper. Once again, I thought I was wealthy.

The sad truth is that I was not wealthy in either scenario because I had no passive income from my assets. If I stopped going to work, the money would stop coming in. This is not wealth.

My realization this weekend is that wealth comes from two primary sources: rent and interest. If you own real estate, you can rent it out. If you have money, you can rent it out, too. In either case, you don't have to do much in the way of "work".

So, how does one CREATE wealth? Simple. You begin by creating a GAP between your income from your job and your monthly expenses.

Sounds easy, right? I used to think so, and my method of solving this problem was to focus on increasing my income while not putting a whole lot of thought into my expenses. In my mind, I could "afford" all the toys I was buying because I made a lot of money.

Oops.

The mistake that I made was that I didn't PRIORITIZE how I treated my money. Most people have income, then they spend, and then they save. The problem is that when the spending is done, there is nothing left to save. Wealthy people, on the other hand, have income, they save, and then they spend.

The difference between the two approaches is HUGE.

Here's why: every dollar that you save is like a soldier and as an investor, your job is to send that soldier back out to fight (earn a return). Spending your money is akin to killing your own soldiers. You aren't likely to win too many wars with this approach.

Think of the Golden goose. If you eat the goose, no more eggs. If you let it lay eggs and you don't eat them all, you'll end up with more geese and they will lay more eggs, and you can then eat some of those, and then you'll have more geese, etc, etc...

Killing your soldiers is the equivalent of eating the Golden goose, and let me tell you, I was an EXPERT goose killer!

So, which do you think is easier to do; increase your income, or reduce your expenses? You guessed it; reducing your expenses is far easier. Not only is it easier, it also has another very important difference.

For every dollar you save, you get to keep the entire dollar. Whereas, for ever dollar you earn, you get taxed and you get to keep only a fraction of the dollar.

In other words, taxes can make you wealthy, if you understand the system.

Consider this; if you earn $50K per year in earned income in California, your top marginal tax bracket will be about 40%, and your effective tax bracket (the total amount of tax you paid as a percentage of your income) will be about 20%. If you are self employed, the story is much the same.

If, however, you earned $50K from rental income, you will hardly pay any tax at all. Why? Its this little thing called depreciation. For every piece of real estate that you own, you are able to depreciate its value over 27.5 years. In this example, when you take depreciation into account, your taxes due on a $50K income will amount to about 3%, or $1600, for the entire year. In other words, you are going to have the after tax income of someone who earned well north of $75k.

In my next few posts, I'll cover some of the ways that you can invest the money from the Gap you've created.

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

Your comments are always welcome,
TRD
www.linkedin.com/in/trentdyrsmid

Acres of Diamonds

2009-04-01T09:20:00.001-07:00

This is not new; however, most things that are worth reading, are worth reading again. I hope you enjoy it and find it applicable in your own life.

I am reminded of this story I first heard from Nightingale-Conant. The story - a true one - is told of an African farmer who heard tales about other farmers who had made millions by discovering diamond mines. These tales so excited the farmer that he could hardly wait to sell his farm and go prospecting for diamonds himself. He sold the farm and spent the rest of his life wandering the African continent searching unsuccessfully for the gleaming gems that brought such high prices on the markets of the world. Finally, worn out and in a fit of despondency, he threw himself into a river and drowned.

Meanwhile, the man who had bought his farm happened to be crossing the small stream on the property one day, when suddenly there was a bright flash of blue and red light from the stream bottom. He bent down and picked up a stone. It was a good-sized stone, and admiring it, he brought it home and put it on his fireplace mantel as an interesting curiosity.

Several weeks later a visitor picked up the stone, looked closely at it, hefted it in his hand, and nearly fainted. He asked the farmer if he knew what he'd found. When the farmer said, no, that he thought it was a piece of crystal, the visitor told him he had found one of the largest diamonds ever discovered. The farmer had trouble believing that. He told the man that his creek was full of such stones, not all as large as the one on the mantel, but sprinkled generously throughout the creek bottom.

The farm the first farmer had sold, so that he might find a diamond mine, turned out to be one of the most productive diamond mines on the entire African continent.The first farmer had owned, free and clear ... acres of diamonds. But he had sold them for practically nothing, in order to look for them elsewhere. The moral is clear: If the first farmer had only taken the time to study and prepare himself to learn what diamonds looked like in their rough state, and to thoroughly explore the property he had before looking elsewhere, all of his wildest dreams would have come true.

The thing about this story that has so profoundly affected millions of people is the idea that each of us is, at this very moment, standing in the middle of our own acres of diamonds. If we had only had the wisdom and patience to intelligently and effectively explore the work in which we're now engaged, to explore ourselves, we would most likely find the riches we seek, whether they be financial or intangible or both.

Before you go running off to what you think are greener pastures, make sure that your own is not just as green or perhaps even greener. It has been said that if the other guy's pasture appears to be greener than ours, it's quite possible that it's getting better care. Besides, while you're looking at other pastures, other people are looking at yours.

The Diamonds are all around us at this time. You must learn to see them, they are everywhere. Now just like the Diamond cutter we all need to become more proficient determining the needs of the owner of the real estate so we can assist them to get where they are going so we can cut the Diamonds and control the real estate.

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

Your comments are always welcome,
TRD
www.linkedin.com/in/trentdyrsmid

Success in the Shadows

2009-03-30T11:56:00.000-07:00

The following post came to me in an email from Jim Randel; one of my mentors. I liked it so much, I thought I would pass it on to my readers.

My office is on the perimeter of a golf course. I enjoy watching the golfers.

There is a member of this club who is a world-class, amateur golfer. He has won several international tournaments. And here is what I have learned from him: success is earned in the shadows. Let me explain.

This man is out on the golf course practicing every day, usually at dawn or at dusk. In fact sometimes there is hardly enough light to see. But, he is always there - before or after his work day (he is a stockbroker).

This man's example is a metaphor to me and how I feel about success.

If you want something really badly, if you want to excel and be the best you can be, then ready yourself to earn your success in the shadows. Understand that you will need to get up early to practice, study, prepare or review when others are sleeping. Understand that you will need to work at your endeavor when you are tired and others are relaxing. Understand that you may be very lonely at times when you struggle alone with a personal challenge while others enjoy friends and family. Understand that you will experience frustration, disillusionment and self-doubt as you seek to improve your standing, for success will never come as quickly or as easily as you hope.

Those who are prepared to struggle in the shadows, when it is hard to see the light, are those most likely to find success in their chosen endeavor.

One of my favorite writers is a doctor named William James who many consider the father of American psychology. In 1890 he completed a 2,900 page study titled The Principles of Psychology. Here is an excerpt:

"(Some identify their goal) and know that the facing of its difficulties shall remain a permanent portion of their task ... They find a zest in this difficult clinging to the truth or a lonely sort of joy in pressing on the thorn ... which no passively warranted possession of it can ever confer. And thereby they become the masters and the lords of life. They must be counted with henceforth; they form a part of human destiny."

If you have a dream, understand that at times your quest will be painful and fatiguing, that at times no one will see the reality of your dream but you, that at times you will feel isolated and unsure, and that at times you will struggle in the shadows searching for the strength and the light to press on.

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

Your comments are always welcome,
TRD
www.linkedin.com/in/trentdyrsmid

Scarcity or Abundance?

2009-03-20T13:52:00.001-07:00

In the last week, I met with a number of people in the real estate business; all of whom, with the exception of one, were extremely generous and shared a great deal of information with me. I was not paying them for their time and they had nothing to sell me.

The one who wasn't generous, not surprisingly, was the least likable, and, I'd venture to guess, is the most unhappy. He only took the meeting with me because he thought I would invest $500K in one of his deals after hearing his 10 minute pitch. His is a mentality of scarcity, and, as such, he thought that any information that he shared with me would come at a cost to him.

This is most definitely NOT the way I live my life, nor is it the way most successful people live, IMHO.

Contrasting the information hoarder, the other folks showered me with ideas, strategies, books, and courses I should take. Several of them also went on to make introductions to people in their circle who they felt would also help me along in my journey.

To whom do you think I now feel indebted?

Successful people tend to be successful in whatever they do and I'm guessing that my venture into the world of real estate investing will be as successful as my last venture. Should that prove true, I will no doubt have opportunity to repay those in my network that helped me to achieve this success. In may be in the form of a successful deal, or referral, or what have you, but rest assured, I will find some way to repay this folks.

I feel sorry for the other guy. Not because I'm going to be a big wheel and he's going to lose out by not helping me. Far from it!

Instead, I feel sorry for him because his life and those he attracts into it are likely to mirror his mentality of hoarding. I don't know about you, but that doesn't sound very appealing to me.

If you aren't receiving the amount of success that you are looking for, instead of wondering how to get more, perhaps it might be time to ask yourself how you can give more? It is my hope that my way of giving to all my readers will be the sharing of what I'm learning right here on this blog. I'm going to be spending countless hours and thousands of dollars on education, and I'm going to share it all right here. And you know what? I'm willing to bet that is going to ultimately benefit me in some way that I cannot possibly predict. That is why I subscribe to the mentality of abundance!

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

Your comments are always welcome,
TRD
www.linkedin.com/in/trentdyrsmid

To the Creative, Go the Spoils

2009-03-18T10:51:00.000-07:00

Last night I had the good fortune to listen to a presentation put on by a full-time real estate investor by the name of Aaron Mazzrillo. He was a guest speaker for a group that I attend and he offered no courses for sale, so I have no reason to believe that anything he said was puffery.

The thing that I was most impressed by was the creativity he used in the types of deals that he was doing, as well as the way he was structuring these deals.

For example; investing in notes was something I hadn't really considered, because, from my rookie point of view, there wasn't enough upside to make it worth while. Wrong!!

This is what he does: financing for mobile homes is now non-existent, yet there are still people that need to buy them and still people that need to sell them. There as also brokers who are trying to put these transactions together. The challenge of course, is the the complete non-existence of financing. Enter this investor. He told a broker that he will lend up to a maximum of $10K per deal (this will cover the commission to the broker and the closing costs) for buyers who have say $30K of a $40K purchase. He then charges 50 points and an interest rate of 12% on the note, and he's now got a first trust deed on the home. In other words, he lends $10K, the note is written for $15k and he's getting interest on $15K of 12% per year! That equates to a payment of $333.66/month on a 5 year term. That works out to be 31.64% per year. Good luck getting that in the stock market.

Now for those of you wondering if this is legal, it is. In California Usury Law applies only to real property. As a mobile home is not attached to the ground, it is considered to be personal property, and is therefor excluded. The cost of his money is high, to be sure; however, he's the ONLY one providing this type of financing, so you can either decided to take the financing and begin enjoying home ownership and the equity building that goes with it, or you can continue to rent and piss your money down a hole; the choice is yours.

Taking the mobile home approach one step further, there are also foreclosed homes available for $2-3K that can be purchased for cash and then resold for $5K down and seller financing. Talk about starting small with a minimal capital outlay.

The point of his presentation was this; you are only limited by your own creativity and imagination. According to him, investing your own cash is the "dumb" way of being a real estate investor, and structuring your deals to make maximum use of other peoples money is the "smart" way, and he had several stories of his own deals to back this up. I don't know about you, but participating in a business that rewards my creativity is just the type of business that I like.

Needless to say, I was thrilled to hear his talk and it has opened my mind to a few ideas that I'd previously not been aware of. I can hardly wait to put to use all the things I'm learning!

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TRD
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Housing Starts Surge in February

2009-03-17T13:30:00.000-07:00

This story just came to my attention, and as it looks like some good news, I wanted to be sure to share it.

WASHINGTON (Reuters) - New U.S. housing starts and permits unexpectedly rebounded in February, according to data on Tuesday that provided a rare dose of good news for the recession-hit economy and fractured housing market.

The Commerce Department said housing starts jumped 22.2 percent to a seasonally adjusted annual rate of 583,000 units from 477,000 units in January. That was the biggest percentage rise since January 1990 and also marked the first increase since last April.

full story...

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TRD
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Real Estate Investor Training: You Can't Do it Alone

2009-03-09T22:10:00.000-07:00

No one is successful all by themselves. No one.

A few posts ago, my readers will have noticed a photo of a book on my desk titled, "Millionaire Real Estate Investor" by Gary Keller. In this terrific book, Gary talks extensively about using models for everything, and building your network is no different.

The image below is a picture of the network needed by a successful investor and I'm now begun to work on creating such a network.

To do that, Keller suggests following the Network Development Model shown below.

If you are someone, or know someone who'd fit into my network of professionals, I'd like to hear from you.

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

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TRD
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Too Funny or Too Sad...You Be the Judge!

2009-03-06T09:00:00.000-08:00

This video was just too good not to pass along. The really good stuff is about 1/2 way through.

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Republican Party, What Are You Thinking?

2009-03-04T14:24:00.000-08:00

Being only a resident of the US and not a citizen, I tread pretty lightly on the topic of US politics. With that said, this post by Mark Anderson of the Strategic News Service was too good not to post a link to.

The first inkling that, having literally destroyed America’s domestic and international well-being, the remaining GOP crowd were going to get even worse, came with the stimulus vote. It seems to have started with Rush Limbaugh, an embarrassing dinosaur on AM radio who seems now to be running the party, in lieu of anyone else raising their hand. “I hope he fails!” he shouted to his listeners the day of Obama’s inaguration.

Read the rest....

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Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

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TRD
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My Thoughts on the Treasury's New Housing Plan

2009-03-04T11:26:00.000-08:00

Today the Treasury Dept unveiled their new housing plan. You can read the guidelines here. There is another worthwhile link here.

In reviewing the plan myself and pondering the impact on the homeowners of Southern California, several questions and comments come to mind.

Let's first begin with the borrower who is on an interest only mortgage with a 2% teaser rate with an upcoming interest rate reset. We'll assume that he owes $450K (thanks to a few refinances to buy toys) on a house that is now worth $350K. Prior to the reset, his monthly payment (ignoring taxes, insurance, etc..) is probably about $750/month. When the rate adjustment comes, he'll be forced to switch to a 30 year amortized conventional mortgage at about 5.75%. To make the math simple, we'll assume that the principle balance has remained at $450K. His new payment will be $2626/month (pus PITI) without the benefits of this plan. I'm guessing that this means the homeowner would go into default in most cases.

Under the new plan, if I'm understanding it correctly, the loan payment will have to be reduced to 31% of the borrowers income. Lets assume that our borrower had a pre-tax monthly income of $6,000, so 31% of that would be $1860 (including about $200 allocated to taxes, insurance, flood insurance, homeowner’s association and/or condominium fees and I seriously doubt that $200 is anywhere near enough for all that so the term would likely need to go to 40 years from 30). Coincidentally, the rate needed to achieve this would be 2%; the lowest rate possible under the loan. Under this scenario, it would appear that the homeowner would have a chance to keep the home, however, knowing that most people live at or beyond their current income, where does the extra $1000/month come from?

What if someone owed $650k, how would that look? Old payment: $1083. New payment without the new plan: $3793. New payment with the help of the new plan: $1968 (assumes 40 year amortization) - Oops, this is more than 31% of the income. Does that mean this borrower is ineligible?

What is someone owed the original $450K, but earned only $4500 per month? The new "modified" payment would need to be no more than $1395, including principal, interest, taxes, insurance, flood insurance, homeowner’s association and/or condominium fees. The loan payment at 2% over 40 years is $1363 alone, so this borrower, who by the way is pretty typical in SoCal, would be SOL.

Then there is the NPV test. Participating loan servicers will be required to use a net present value (NPV) test on each loan that is at risk of imminent default or at least 60 days delinquent. The NPV test will compare the net present value of cash flows with modification and without modification. If the test is positive – meaning that the net present value of expected cash flow is greater in the modification scenario – the servicer must modify absent fraud or a contract prohibition.

What isn't clear to me at this point is this:

1. What is the discount rate for the NPV test?
2. How can the NPV of a stream of cash flows from a 2% (modified) mortgage EVER be greater than from a 5.5% (unmodified) mortgage? I must really be missing something here.
3. What happens to a borrower who's mortgage, once modified with the 2% floor rate, still has payments higher than 31% of income? It would appear that borrow is ineligible and it looks to me like many borrowers will fall into this boat.
4. If the borrower is married, are incomes combined? One would assume so.
5. What if the borrower is unemployed and the income is zero?
6. What is the borrower gets a raise a year or two from now, will the payments go up or do they get a free ride?
7. How is this program going to help the real problem plaguing housing prices; namely excess unsold inventory? Until unemployment drops, consumer confidence rises, and banks begin to lend again, the first time home buyer isn't likely to buy.

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Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

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TRD
www.linkedin.com/in/trentdyrsmid

Some Quotes from Berkshire's Annual Report

2009-02-28T08:09:00.000-08:00

Good old Warren Buffet is never at a loss for words. Here are what I thought were a few choice quotes from the most recent annual report:

- By yearend, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.
- In God we trust; all others pay cash.
- Whatever the downsides may be, strong and immediate action by government was essential last year if the financial system was to avoid a total breakdown.
- Amid this bad news, however, never forget that our country has faced far worse travails in the past. In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 21 1⁄ 2% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. America has had no shortage of challenges.
- America’s best days lie ahead.
- we were paid $2.8 billion to hold our float during 2008. Charlie and I find this enjoyable.
- Charlie and I are equally enthusiastic about our utility business.
- When investing, pessimism is your friend, euphoria the enemy.
- During 2008 I did some dumb things in investments.
- Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.
- The private-equity firms, it should be noted, are not rushing in to inject the equity their wards now desperately need. Instead, they’re keeping their remaining funds very private.
- As we view GEICO’s current opportunities, Tony and I feel like two hungry mosquitoes in a nudist camp.
- The present housing debacle should teach home buyers, lenders, brokers and government some simple
lessons that will ensure stability in the future. Home purchases should involve an honest-to-God down payment of at least 10% and monthly payments that can be comfortably handled by the borrower’s income. That income should be carefully verified.
- Though Berkshire’s credit is pristine – we are one of only seven AAA corporations in the country – our cost of borrowing is now far higher than competitors with shaky balance sheets but government backing. At the moment, it is much better to be a financial cripple with a government guarantee than a Gibraltar without one.

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TRD
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How to Buy Domains Like a Pro

2009-02-28T07:42:00.001-08:00

Tim Ferris has a great post on this important topic here.

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TRD
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Real estate investor essentials

2009-02-27T13:46:00.000-08:00

Just in case you thought starting a new company was somehow sexy, I
thought I'd share the glamor!

Trent

My Evolution as a Real Estate Investor

2009-02-27T12:05:00.000-08:00

Having built and sold a technology company over a period of 8 years, I now find myself embarking on a new career of investing in real estate.

Much like when I started my technology company, I'm very much a rookie and have much to learn. For those who are fellow investors in the making, I thought that this time round I would chronicle my journey from rookie to expert with the hopes that my ideas, lessons, and strategies will also benefit my readers. I would also encourage you to share your thoughts with me as we go so that we may all benefit from the discussion that ensues.

So, without further ado, here we go...

As with anything I've ever done in the past, my career as a real estate investor is not going to involve re-inventing the wheel. Many a pro has preceded me and have been more than willing to share their techniques and strategies. In the words of Tony Robbins, "success leaves clues".

My first mentor is the founder of Keller Williams Realty, a massively successful broker, investor, and author (I hope than one day years from now somebody writes that about me!). I first learned of Gary by chance on a recent visit to my good buddy, Mike Cooch, CEO of Everon Technology Services. I was sitting in Mike's offices looking at his collection of books wondering what he'd read that I hadn't. Mike, by the way, is one super-smart cookie, so poaching his reading list is among my favorite things to do. Among the many books on Mike's shelf was one titled, "The Millionaire Real Estate Agent" by Gary Keller. As I knew that real estate sales would also play a part in my new life as an investor, I immediately pulled out the iPhone and snapped a pic of the book for a later purchase from Amazon.

When I got to Amazon, I was pleased to learn that Gary had also written another book; The Millionaire Real Estate Investor. Needless to say, I was quick to add it to my cart.

Both books have been excellent and each one preaches the same methodology; to be successful at any endeavor one must have a BIG reason why they are doing it, have BIG goals, or as I like to call them, promises, and follow BIG models in the execution. Aha, I thought, this is a formula I know well!

So there you have it. Step one is to find a mentor, buy their books and study your ass off.

While I'm not yet finished the investor book, I can tell you the one thing that has been drilled home so far. Start by looking a real estate. Look at lots and lots of real estate and crunch the numbers. Only then, will you know and opportunity when you see it. And when you do, finding the money will be the easy part.

Up next...what to look for when analyzing a property.

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

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TRD
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Creating Opportunities from Failure

2009-02-26T17:15:00.000-08:00

Many times, regardless of how well we plan, some things just fail. Maybe it’s a webinar or meeting presentation that was well prepared, but suffered technical difficulty. Or a disciplined savings plan lost nearly half of its value in today’s recession. These challenging situations define our days, but our response to them determines our future success.

While some curse and yell, others see failures as opportunities. Poet Maya Angelou writes, “I've learned that you can tell a lot about a person by the way he or she handles these three things: a rainy day, lost luggage, and tangled Christmas tree lights.” Failures can either destroy or advance our goals; but it’s our response to them that really determines the outcome.

Thomas Edison experienced repeated failures. His true success was not his invention of the light bulb, but rather his tenacity to use failures as a means to gain new information and new perspectives. Our most successful employees are the ones who have the persistence and optimism to learn from difficulty and use what they learn to re-imagine, recreate and re-experiment. They are the ones who have learned to be positive and to constantly hunt for opportunities. As the economy struggles to recover, successful organizations will reinvent their futures by focusing on these opportunities.

Here are some tips on getting things right, when things start off wrong:

1. Create and support a workplace culture that encourages employees to look for the opportunity in every event.While organizations value effort, innovation and intent, they should also celebrate non-conventional and non-conformist perspectives. Occasional failures show that employees are pushing performance to the edge. As management consultant Tom Peters states, “A day without a screw up is a day without enough reach.” After failures, managers should encourage employees to focus on the positive; this creates a culture that is open, free thinking, and believes that “Yes, we can.”

2. Focus on exponential, not incremental, opportunities. Direct your discussions of opportunities toward significant, not average, results. Performance “lite” is unacceptable. Consider opportunities that have the potential to be “game changers.” Successful organizations know nothing lasts forever, and they must continually reinvent themselves.

3. Commit time and effort to help employees learn their strengths and use them to develop opportunity-thinking.Each of your employees has the potential to be great at certain things. Encourage them to use their intrinsic talents and strengths to deliberatively hunt for opportunities in areas in which they have the greatest insight.

4. Actively solicit input from employees. Leaders who ask “big” questions and take the time to listen to responses can discover new perspectives, facts, ideas and dreams from customers, employees and vendors. Try asking questions that begin with: “How about …?” “What if …?” or “Tell me about …” Assess what you hear and then share it with your team to expand the hunt for opportunities.

5. Share success with everyone. While it’s easy to openly share and celebrate successes, companies should also communicate failures in a way that inspires employees to rethink, redefine and reinvent. The more successes are shared with everyone, and failures are seen as a way to improve, the more idea-risks employees will take.

In an intellectual workplace, innovation, inventing and opportunity hunting must be core expectations of all employees.
Some people are discouraged or angered by failure and change. Others see it as an opportunity for greater success. Not only can the hunt for opportunities increase your success, but it may help you invent the next product that makes people’s lives better.

The preceding article was written by Jay Forte, President of Humanetrics

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TRD
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Enough with the Bad News Already

2009-02-25T08:57:00.001-08:00

Ok, I get it, we are in a bad economy...no, make that a really bad economy. Wait, maybe the worst economy, ever..??

I think you get my point. Its bad, we all know its bad, and we all believe is going to get worse. We also know that one's perception most often equates to one's reality.

What's my point? Simple. Stop reading all the doom and gloom, and instead spend your time either working, or looking for something with a positive spin. Want a few ideas, just head over to Amazon and you'll find and endless list of books.

In times of duress, people forget that the media is in business to turn a profit; not to objectively report the news (I can hear the reporters hissing at me now), and because bad news sells so much better than good news, the media, by its very nature, MUST report the bad news to sell newspapers, magazines, etc... Does that mean the news is wrong? No, or course not. But it does mean that there is also good things happening in the world. You just aren't reading about them.

Companies are still getting founded. Companies are still getting funded. Contracts are still being won. Employees are still being hired. Remember, 10% unemployment means 90% of the people are still working. Thanks to the media, the aren't doing a whole lot of spending, however.

Obama, while no miracle worker, is on the right track. He's out spreading the good word. Is he too optimistic? Maybe. Will things take longer than he hopes to turn around? Probably. Regardless, what he is doing right is giving people hope...or at least he's trying to. For that, I applaud him.

So, back to you and what you can do to help right the ship. First, stop, or at least decrease, the amount of time that you spend reading doom & gloom news and instead look for bright spots. Second, tell your employees, associates, and family about the bright spots you find. Can't find any? Look harder and stop whining. Still can't find any? Make one!

The thing about recessions is that for a period of time to be labeled as such, it must have already passed. In other words, we don't know we are in a recession until we are 1/2 way through it; assuming you believe that they last on average for 24 months. With the data now in hand, one can see that we've been in recession since March of 2008, or thereabouts. Remember back then? You were still doing business, the sky wasn't falling, and the world wasn't coming to an end; yet, in hindsight, we were in a recession. What's the difference? The media hadn't yet fully gotten ahold of it and turned our collective attitudes south!

The world is not coming to an end. The largest asset bubble in history has popped, yes, but we will rebound from this downturn, just as we have done with every other downturn. Want to know what else? Those with the courage (and capital) to invest now, will probably amass more wealth in the next 5 years than at any other time in history.

The world is still FULL of opportunity. Go get yours.

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Do you have an opinion or thought about this topic? Please write a comment on this blog post by entering your thoughts in the form below. Let me know what you think and if my thoughts resonate with yours. My readers enjoy reading what others think.

Also, send a link to this blog to one or more of your friends and get them to become one of my subscribers. This will help me to expand my circle of influence and allow me to share this and other great material with your friends.

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TRD
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How to Get $250K Worth of Advertising for $10K

2009-02-20T09:12:00.000-08:00

Tim Ferris has a great post on this and its worth reading if you are even remotely thinking of doing some advertising.

Your comments are always welcome,
TRD