"A simple rule dictates my buying:
Be fearful when others are greedy and greedy when others are fearful. Fear is now widespread."
Warren Buffett

  What Kind of Economy Will You Have In 2009?

 

   The new year is here and all the media pundits and politicians tell us that 2009 will be a disaster. Government bailouts are being approved for many of America's industries. The National Debt is increasing at record speed.

 We all hear that the Economy is failing and there is nothing that you and I can do about it. Local as well as national papers tell us the economy is out of control, and we must go along with our Government and hope that their interventions will pull us through.
 Now think about this for a minute: Here is some columnist who lives in New York or Washington, or a politician telling you that you will not be able to control your own economy, you will suffer and your family will have to do without. I don't know about you but I find this totally unacceptable.

 What all these pundits don't understand is that your economy is local in nature and not some global juggernaut. The only economy that matters is between you and your customer.
 In tough economic times the constant drumbeat of negative press takes its toll on the American psyche. But with that said, your economy and success lies in you, not some pundit in Washington.  No matter what, people still need to eat, fix their cars, buy clothes. They may not spend money like they did before, but they will spend money.

   Look around at your local restaurants: most still have waiting lines! And the very good ones are still packed every night. People are spending money, but with the businesses that appreciate them. They are making their own economy and are choosing not to participate in this recession.
Your attitude is crucial to your success. You will have to decide for yourself whether you are going to succeed or fail, but ultimately you're responsible. You must own it!
 
 
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 E-MAIL PAUL



 

REAL-ESTATE

 

  Recently I was talking to my Real-Estate mastermind group about an LLC we just put together to buy bulk houses. We plan to buy 70 houses for $18,900.00 each (yes, that is the right price). All the homes have appraised for at least $49,000; some for over $60,000. The closing date is for mid January. Now, you have to be prepared to deal with a few problem houses but there is a return policy if they don't meet certain basic standards. In that case the REO firm will exchange them for another property. The properties are all over the country but this is not a major drawback when you consider the price. We have access to a property management company that we received from the REO seller and primarily talks have gone well.
We are being told from the property management companies that rentals in the areas in which these homes exist are between $ 500.00 and $ 650.00. So they all should produce positive cash flow. Our plan is to lease them with an option to purchase in one year, carry owner financing, and sell the notes. One of my mastermind members is a note broker and buyer. Most of the time with a seasoned note and good payment history he can get 89% to 92% of the note value. This makes for a great real-estate deal.
So here is my question for you: Are you going to let one of the best real-estate markets since the RTC pass you by or are you going to get involved?
I have been an advocate for some time now about buying properties in groups. The advantages outweigh any disadvantages. When you buy in groups you set up an LLC and set a cash price for each 1 percent of the deal. Here's an example: If you are raising $100,000 and plan on selling 100% of the LLC, each 1 Percent is worth $1,000.You can set the minimum purchase at 5% or $5000.00. This way each person can buy as much as they can afford. (You must check with a SEC attorney to make sure you don't run afoul of the SEC requirements for disclosure) Always check with an attorney before you invest in any real-estate deal.
I have been advised not to have more then 20 people in any one LLC by the attorney I have consulted. The other LLC I am involved in manages never to have more than 20 investors. The key to a quality investment is to have all members on the same page with each member having a clear understanding of the exit strategy for the properties purchased. Accounting transparency is critical; all members must know who the accountant is and how to contact them. If you do this your life and your investment will be much easier. Feel free to call me at 941-716-2597 if you have any questions. 

 

This is not intended to solicit either individual investors or investor funds, and is only offered for informational purposes. Before making any legal or accounting decision, always consult with the appropriate legal or accounting professionals.
 

 

  An appeaser is one who feeds a crocodile, hoping it will eat him last.

 

Sir Winston Churchill
 
   A fanatic is one who can't change his mind and won't change the subject.

 

Sir Winston Churchill
 
   Don't spread patriotism too thin.

 

 Theodore Roosevelt
 
 
   A leader who doesn't hesitate before he sends his nation into battle is not fit to be a leader.

Golda Meir