10/24/10: Big Profits without Wall Street or Tenants – How Private Investors are Making Money from the Financial Crisis

When an economy burns down, the landscape is charred and the financial food chain is disrupted.  Viable businesses starve for funding, while investors hunger for return.  The normal eco-system has broken down and sources of capital and investment opportunities aren’t where they’re supposed to be.  Everything is in disarray and the ensuing uncertainty breeds fear.

But it also brings opportunity.

Sadly, after an economic forest fire, most people focus on what’s burned.  They hang around the old Wall Street and banking feeding grounds, waiting for things to grow back and settling for low returns or grubbing for hard to find funding.

But others are able to find new pastures simply by looking past the beaten path and seeing where the new opportunities are growing green in more fertile soil.

We found a guy who’s doing something so brilliant that we decided to dedicate this episode to cultivating our understanding of his model.

Plowing through the conversation in the studio for this adventure in broadcast excellence:

  • Your show host and real estate Yogi, Robert Helms
  • Co-host and Boo-Boo bear, Russell Gray
  • The man with the Smokey voice, the Godfather of Real Estate, Bob Helms
  • Special guest, investor and real estate entrepreneur, Ron Black

A few episodes back, Ron Black called in and seeded our minds with the awareness that in today’s charred economy, conventional banking is failing to feed the needs of both savers and borrowers.  Interest rates paid to savers are too low.  Access to loans for consumers and business is too tight.  Even well qualified borrowers are having a hard time finding the funding needed to grow the economy.

For investors in the past, long term appreciation has proven to provide plenty of financial timber for building a strong retirement.  Just buy stocks and real estate, water them faithfully, and in time they grow into mighty oaks of equity.  But today, the economic forest has burned down – and while those who plant now will likely have some big trees in 20 or 30 years, what if you don’t have that much time?

For baby boomers, the last 10 years of buy and hold stock investing has been disappointing at best. The Dow hasn’t grown.  It’s even worse for retired folks trying to live on interest income when yields are low single digits.  When you’re living on interest, if rates go from 4% to 2%, you just suffered a 50% pruning.  Ouch.

When it comes to personal finance, conventional financial planning models are struggling to adapt. The whole system is designed to sell stocks and bonds through the Wall Street machinery and to park money in the banking system.  Then these “experts” take your money and (as we’ve all now sadly discovered) they do all kinds of risky things, most of which the average person doesn’t understand, can’t control and probably wouldn’t approve of.

Conservative individual investors have been gravitating more towards dividend paying stocks. These stocks are typically issued by big companies with solid profits (or at least as solid as they can be in a fragile economy).  With yields of 6-8% and the opportunity for long term capital gains, we understand that this looks “good” compared to whatever green shoots are peeking out of the charred landscape of traditional Wall Street offerings.

Of course, if times get tough for the dividend paying company, they may choose to reduce or eliminate the dividends.  Or, perhaps they’ll incur debt or distribute vital reserves to continue to pay dividends when they really can’t afford it.  If this happens, you can bet the stock price will drop, which makes an exit in favor of a better offering potentially expensive.  Buy high and sell low is not a winning formula.

What about high yield bonds? Money for top quality corporate borrowers is pretty cheap right now.  The best companies are sitting on piles of cash waiting for the economy to stabilize.  They hardly need to borrow and wouldn’t pay much to do so.  So high yield bonds are likely to carry substantial risk.  Plus, are you ready to trust the Wall Street credit rating agencies again?  You know, the ones that gave sub-prime mortgage backed securities a trip A rating?  We’d rather go for things that we can see and understand.

Then there’s high interest savings accounts and high yield CD’s.  But remember, today’s definition of “high interest” is maybe 3-4%. Whoopee.  Plus, the better rates mean locking the money up for years.

So the conventional investing trees are pretty bare right now.

The problem with the Wall Street model is that investors are too far removed from the actual investment and have so little security if something goes bad (does that really happen?), that even in the good times, it’s still risky.  The only reason it doesn’t feel risky is because Wall Street insulates you.  Plus, all the slick marketing is intended to make you feel like giving your money Wall Street and the banks is not only normal, but your only choice.

With so much retirement planning marketing built on the Wall Street model, most people don’t have any idea where to find another option – or even what it would look like.  And when they do, those Wall Street paradigms pop up and prevent people from seeing that low risk, high yield, short term, cash flow investments are possible in today’s market – specifically because the Wall Street systems have broken down.

In this episode of The Real Estate Guys™ Radio Show, our special guest Ron Black describes how he identified a void left by the breakdown of the traditional mechanisms for matching investors with yields.  Best of all, his model cuts out Wall Street and the banks (after all, they’re really just high priced middlemen) and gets the investor very close to their actual investment.

The bottom line is that double-digit high yields are currently available on short term, secured investments which are easy to access and understand. It’s something anyone can do in today’s market to supercharge their portfolios, whether seeking current income or long term growth of principal.  Think of it as Miracle Gro for your portfolio.

You’re gonna like this show!

The Real Estate Guys™ Radio Show podcast provides education, information and training to help investors make money with their real estate investments.

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10/17/10: Avoiding PMS – The Single Most Important Element for Healthy Cash Flow

When your real estate investments are properly managed, money flows in each month like clock work.  But when the monthly flow is accompanied by pain, it could be a sign of Property Management Stupidity or PMS.

When PMS sets in, it can severely cramp cash flow and may be accompanied by heavy bleeding.  Investors suffering from PMS are often very irritable.  PMS is known to play a role in the break up of marriages and partnerships.  Left unattended, PMS causes balance sheet anemia and can lead to embarrassing stains on a previously lily white credit score.

To help you avoid getting your undies in a bunch when dealing with this sometimes messy and often unspoken topic, The Real Estate Guys™ sit down with a second generation property manager and past President of a local chapter of the National Association of Residential Property Managers.  We discuss the causes and cures of Property Management Stupidity and how to keep your monthly cash flow safe and sanitary.

In studio for today’s real estate radio show podcast for this absorbing conversation:

  • The best darn real estate radio talk show host in the world, period!  Robert Helms
  • Your sometimes bloated and sensitive co-host, Russell Gray
  • A man who has avoided PMS throughout seven decades of investing,  The Godfather of Real Estate, Bob Helms
  • Special expert guest and seasoned property manager,  Jay Hartley

A comfortable monthly flow of cash is the life-blood of financial success for households and businesses.  Cash flow is what a professional investor buys when purchasing either stocks or real estate.  Fundamental price appreciation (not that which is merely caused by inflation) is a reflection of cash flow and the market’s willingness to pay for it.

So when it comes to real estate investment, it seems investors would pay close attention to finding the best property management company available.  But sadly, most landlords don’t focus on property management until they’re in pain and are trying to stop the bleeding.   Then they impatiently hand their new property manager a big mess to clean up.

But there’s a better way!

Listen to this podcast and discover:

  • How to find the best property management company
  • Stop the bleeding on your rental house and other rental property
  • Avoid loss to your real estate investment and make money as a property owner and landlord

The Real Estate Guys™ Radio Show podcast provides education, information and training to help investors make money with their real estate investments.

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10/10/10: Deliverance for Distressed Borrowers – Loan Modification Legal Update with Attorney Reuben Nathan

With millions of property owners in financial distress, getting foreclosure help is a top priority.  But it’s a much bigger topic than simply how to stop foreclosure.  And with the controversy over alleged paperwork improprieties, the whole topic has gotten even more complicated.  What’s a distressed borrower to do?

As we’ve discussed on several previous episodes and in various free reports (see the Distressed Borrower Help Center), there are a variety of loan workout options available.  For those who want to keep their home and rental property, re-negotiating the loans can be the first and best choice.  But where can you find loan modification help you can trust?  After its first few years of explosive growth, new laws have wiped out many businesses that provided loan modification services.  That’s the bad news.  The good news is that those left standing are generally the best loan modification companies.

So we decided to get together with a loan modification attorney for a candid conversation on the legal state-of-the-art in loan modifications.

In the broadcast canoe paddling down the real estate rapids for an exciting adventure into radio excellence:
•    Your host and experienced outdoorsman, Robert Helms
•    Co-host and chief paddler, Russell Gray
•    Expert guest, attorney Reuben Nathan

In this radio show, The Real Estate Guys™ venture into the backwoods of the legal wilderness to talk about what programs are working now as property owners, lenders, attorneys, the courts and government are all busy sorting through the foreclosure crisis.

  • What is the best way to save your home and rental houses?
  • How much money does it cost to get a professional service to help?
  • Has the recent news about widespread mortgage fraud improved your odds of success?
  • Is it possible to negotiate a successful workout and avoid the loss of your credit, cash savings and retirement?

In a weak jobs market and declining or uncertain income for millions of homeowners, it takes a good survival plan to avoid bankruptcy.  The choices aren’t always clear, yet every decision is critical to getting a loan workout deal you can live with.

The first and best investment is in your own education, so tune in as The Real Estate Guys™ talk with attorney Reuben Nathan for help in navigating through the treacherous territory of mortgage modifications.

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10/3/10: Caveats and Considerations of Cross-Border Real Estate Investing with Attorney Mauricio Rauld

“Go West, Young Man!” has given way to “Go Global, People!”

Back in the fledgling days of the American experience, young opportunity seekers often left the comfort and competition of the mature eastern states to seek their fortune in the emerging markets of the wild, wild West.  Real estate was a big part of the opportunity then – and it’s a big part of the opportunity today.

In the covered wagon, trekking through radio no man’s land in search of real estate fortune:

  • Global real estate pioneer and show host, Robert Helms
  • Wagon maker, puller and repairman, Russell Gray
  • Attorney Mauricio Rauld

Today’s investors, both stock and real estate, have a growing attraction to foreign markets. And not just developing markets, but thanks to currency fluctuations and an ever more global economy, investors are seeking to take advantage of shifting tides of capital, business and jobs into mature foreign markets as well.

So while there are many opportunities available around the globe, being an investor today requires more sophistication and attention than ever before.  Some are happy to simply work hard, live below their means, save money and turn it over to Wall Street and the government to provide for their future.

Others have decided to take control of their financial future and invest the time, money and effort to find investments they can understand and manage themselves.  For people like this, God created real estate.

But before you get dollar signs in your eyes and charge off to buy cheap, beautiful property in warm, affordable, tax favorable markets (which is SOOOO tempting), it’s smart to get some guidance from people who’ve gone before.  Remember, pioneers are the guys who get arrows in their chests while they discover new opportunity.  Settlers are the folks who learn from the pioneers and come in and develop the opportunity.

So, with that verbose prelude, this episode of The Real Estate Guys™ Radio Show features an interview with an attorney who serves as general counsel to an international real estate investor and developer.  His job is to help his client avoid the arrows – and to extract them when one strikes.

Listen in and discover what things YOU should be thinking about as your take your real estate investing across the border.

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Note:  Attorney Mauricio Rauld will be one our esteemed faculty members for our 9th annual Investor Summit at Sea