Monday, October 28, 2013


I just returned from a grueling but fun four days of training with PRIVATE MONEY EXCHANGE/COGO CAPITAL. And to make it clear, I did sign up with the PME AFFILITATE program and over the weekend I signed up with their mortgage broker training program. It is important to me that I not present this as an unbiased review. I’m excited and I hope that I can help you see why I am excited. Over the next few messages, I hope to express some of my steps in reaching this goal and reasons for jumping into these arenas. A compelling TV program has helped to bring the crisis to the forefront (  
This program talks about the many and substantial fees that are charged to the 401K accounts for most retirees.

When first starting this endeavor into real estate investing my objective was to stretch my retirement money out so that my family and I could have a more comfortable living in our later years. As you know, money doesn’t grow on trees as much as I wish it did. And despite retiring from the United States Postal Service after 32 years, my retirement income was rather paltry. I could see that after a few years we would be lucky if we were not registered as falling below the poverty level. So I looked around to see what interested me and where you could make a profit in the shortest period of time. Now I was not nor am expecting overnight success; I knew any endeavor was going to take work. 

I had always heard (and observed) that rich people seem to invest in two major areas—real estate or stocks/bonds. I knew there were other niches such as tax liens and suspected there were many other areas that I was less familiar with. Since I had some money in my Thrift Savings Plan with the USPS, I knew I had some money that could be deployed to grow more rapidly if I was cautious and careful and still be in a tax deferred status. To me the stock market has always been awfully risky, fluctuating wildly sometimes and it is just paper. But land, property, real estate at least was something tangible. As they say, we aren’t producing any more land. What we have is what we have.  

Regular savings interest was going nowhere with rates of 0.90% Annual Rate (from today’s listing for GE Capital Bank). And 1.10% (6-Month Bonus Rate Up to $50K for 1-st time money market clients at EVERBANK). I noticed on the search page that EVERBANK emphasized 5% GUARANEE as if that was what you would get from putting money in their money market account: 

But when you read further on their home page, their “guarantee” actually states: 
EverBank Yield Pledge Promise 

Your Yield Pledge Money Market Account rate will be in the top 5% of Competitive Accounts at leading banks nationwide.1 

I would say that is not exactly the same thing as earning 5 % interest. 

In any case, I think we can all agree that the amount of interest that you can earn from the banks in your savings account does not even keep up with inflation. So I had to find somewhere else to put my money and start to grow my retirement funds faster. 

This led me to real estate.  I have always had an interest in real estate and a 6th sense for when the market was turning and when to buy and sell our personal residences(We are in home number 6.) We always made considerable capital gains from each home except our current one. We made about $100,000 on the sale of the last one and put down $70,000 on the current place. 

(Knowing that the real estate market was soon going down in 2007, we bought when we should have rented. But I will be frank with you, I didn’t think it would crash as badly as it did, or take as long to come back. So we bought instead of renting. We figured we would loss the $70,000 if we had to sell for some reason, but we would be in the house long enough to see the values come back up and recoup it. The values are coming up but we are still a ways from getting back what we put in or even covering our current mortgage. We would probably have to rent out the condo if we wanted to move. Additionally we had pets and I just could not stand the thought of having to move again in another two years. Besides when I looked at the cost of rentals we would pay just as much if not more than to buy. Two years is how long I thought it would take for the market to come back up. Boy was I wrong. It’s been five years and we are still about $84,000 below what we paid, and although we could possibly get what we owe, where would we move. There would be no cash for moving.) 

So with all these thoughts rumbling around in my mind, I figured real estate investing was the best way to go. 1) You get a tangible asset. 2) The market is coming back so you get appreciation. I have seen estimates that prices in San Diego County have gone up with 1 BEDROOMS up 38.3 % and 3 bedrooms (as our is) up 19.5% year to year according to TRULIA.COM. 3) If you buy and flip you can make upwards of several thousand dollars per transaction depending on several factors of course. 4) As your income increases you can become the bank and make 12% or more in interest in making loans that are secured by real estate (in worst case scenario you have to foreclose and you get the property). 5) And on top of everything else you can help people get out of difficult situations when you find the home seller or company that has to sell, or the buyer who has a bad credit rating because they lost their house in foreclosure. It can be a win, win, win situation for everyone (seller, buyer, and investor). 

As I approached my retirement date of January 31, 2013 from the Postal Service, I decided at the last minute to sign up for the realtor licensing class at Cuyamaca College and a Microsoft Excel and Access class. The real estate class just wet my appetite for more real estate subjects. 

To start I went to seminar for 2 hours meeting in early February which provided some real estate investing information, but also explained the three day intensive seminar on real estate investing through THE FLIPPING FORMULA. I signed up to go to the three day training which met on February 22, 23, and 24, and at that meeting I signed up for their complete program with mentoring. The mentoring sessions for FLIPPING FORMULA began with another three day intensive training program in early March which included classroom instruction and bus tour to view and evaluate several homes in San Diego.  

Now we had some difficulty finding homes in San Diego that had not already sold. The market was heating up fast and all the homes that the trainer had planned to take us to were already gone by the date of the bus tour so he scrambled to find new homes to see. It was productive but frustrating because the trainer really wanted to have an opportunity for us to make bids on the homes. I don’t think anyone was able to put in any bids on the homes we saw because they were gone so quickly. 

Because of the obvious overheated market in San Diego, I began to investigate the prospect of investing outside of San Diego. I was also intensely studying my real estate license class and the Excel and Access class. These classes did not end until May 29 (last final). 

There were sporadic telephone calls in early April and weekly mentoring webinars began April 23 for 6 weeks through May 28June 13 to 15 my sister and I attended The Flipping Formula three day training and buying summit in Las Vegas where I bought the two houses that I wrote about. 

As I wrote in some of my other blogs, I became less enamored with the idea of trying to work outside San Diego because of the challenges I was having with my two properties purchased at the seminar. I was drawn to Marko Rubel another real estate promoter, but one who is centered in San Diego. I really liked his presentations and seminars and over time ordered his PROFIT GRABBER program.  

I began following John Cochran and his BuyersOnFire program and his Wholesaling Mastery program ($995) on HUD homes. (Two programs that I would recommend to anyone.) John Cochran is an amazing young man, very organized and provides excellent concise and easy to follow online training sessions as well as webinars. His training videos are dissected to provide small bits of information for easier watching and easier refreshing if you forget how to do a particular step. I bought both of these programs although I would recommend that use of the HUD program is probably better suited to areas outside of red-hot markets. It is hard to get a good deal when even HUD is pricing their homes above current MLS listings as they do in the San Diego market.  

So I took a long roundabout way to get to mortgage loan brokering. I guess that is going to have to wait until the next blog. 

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