Issue #2670

• WEALTHY: Should you steer clear of real estate? (Dean Graziosi)
• HEALTHY: Stop strokes… with yolks? (Kelley Herring)
• WISE: Hugh Allen on small opportunities

ALSO IN THIS ISSUE:

• 5 ways to survive the worst (Bob Bly)
• Are you using the right form of this word? (Don Hauptman)
• It’s Fun to Know… about zombie spiders
• Add “acumen” to your vocabulary

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“Jumping at several small opportunities may get us there more quickly than waiting for one big one to come along.”

Hugh Allen

Increase Your Income Now While the Economy Is Down!

By Dean Graziosi

The summer of 2009 will mark two years of the housing crisis being in full force. Nothing in recent times has wreaked as much havoc on the lives of homeowners. On the other hand, nothing else has created as much opportunity for you to make a fortune in real estate. Even if you have bad credit or no credit, even if you don’t have any money to invest.

Sound too good to be true? Give me a few minutes and I’ll make you a believer.

Today, I am going to give you two ways to bring in extra income (or build yourself a small fortune), starting this week, in spite of the economy.

Strategy 1. It’s a Numbers Game

One of my students, Matt, impressed me so much that I began partnering with him on investments. And we evolved a system that works like a Swiss watch.

You start by looking at lower-priced houses, $150K and under. You are going to buy them for about half of what the fair market value is, and you are NOT going to do anything nasty to achieve this. The catch is, you need to make about 25 offers in order to get one deal. You want to focus on houses that are already listed below fair market value – and the longer they have been on the market, the better.

Your formula for this: Fair Market Value x 60% = Your Offer

In other words, for a house that has a fair market value of $100K, you would plug in $100,000 x 60% = $60,000. That would be your maximum offer, give or take. If you have good credit, banks will very likely lend you the money because you’ll be getting the property for so much less than market value.

Matt does this and, in most cases, he rents the property out for cash flow. You could also flip it to another investor. Buy it for 40 percent off; sell it for a 20 percent profit. If you find a property that is already discounted 20 percent, you offer less – say, 30 percent less than the asking price. Matt offered 10 percent less on a bank-owned house that was already at 50 percent and it was accepted. He had a buyer lined up before he closed on it, and presold the house for a $20K profit.

By the way, only 10-20 percent of the properties we buy are foreclosures. The rest are owned by people who just want to get out immediately.

If you don’t have the money or credit to use this strategy, find private money. There are plenty of people out there who would love to earn more than their 401(k) or IRA is delivering now, and would be delighted to invest in properties where you’ve done all the legwork.

Remember, it’s a numbers game. You’ll need to make 25 offers (on average) to get one deal.

Strategy 2. Control With Contracts

This strategy allows you to put cash in your pocket in 5-20 days. Ideally, you’ll have a few people lined up to help you when you need them: a realtor to help you find deals, a broker to help you get your buyers approved for loans, and a lawyer to draft/okay your notes/contracts.

You also have to create a list of people who buy investment properties. To find them, simply run ads in your local Pennysaver, put out flyers advertising “Houses 50% off,” get phone numbers from “I Buy Houses” signs, check out REI (Real Estate Investing) Clubs, etc.

Then you build a list of potential tenant-buyers – 10-15 people who would be interested in a lease-option deal (renting with the option to buy). Again, use Pennysaver ads and flyers. In addition, advertise on CraigsList, tell your realtor that you will do some rent-to-owns, and post signs at apartment complexes, bookstores, convenience stores, etc.

And then it’s time to find the properties.

You’re looking for motivated sellers. People who are behind on their payments are perfect. Find them with the same advertising techniques mentioned above, using phrases like “stop foreclosure” and “debt takeover.” Get expired listings from your realtor, and look for “For Sale by Owner” signs.

You’re also looking for houses that don’t need much in the way of repairs. You’ll wrap the cost of necessary repairs into the down payment you ask for from your investor or tenant-buyer, so get an idea of what you might have to pay for painting, carpeting, roofing, door and window replacement, etc.

Now you put it all together.

You get the houses under contract as cheaply as you can. (Check comparable prices on homes in the neighborhood on sites like zillow.com and realtor.com and in local real estate listings.) You tell the sellers that it will take you anywhere from 5 days to 60 days to pay off their notes because you are going to wholesale or lease-option the property. And you write the contracts as “and or assigns” so you can turn them over to someone else.

As soon as you get a property under contract, call the people on your investor list. Tell them all about the house. Mark up the price a little (or as much as you can). But make sure they can still make plenty of money on resale or they will move on to another deal.

If you cannot flip the property to an investor, go to your tenant-buyer list. Pick the one with the most money for a down payment or the best credit. (Your mortgage broker will help you.) Offer to put that person in the house with a 12-month lease-option. Let as much money as you can stand go toward the down payment for three months or so. The mortgage company likes that – and you should have their mortgage done in 3-6 months.

Basically, none of it is your money. You use the tenant-buyer’s money to get the house.

Go and Invest!

I always look for positive solutions to problems. That is why, instead of giving in to the gloom and doom of this down economy, I look at the current real estate market as an opportunity to make money while helping others.

Let’s say property values in your area are down 20 percent. Put out 25 offers at around 60 percent of market value. (If a property is listed at $200,000, maybe you offer $120,000.) In my experience, you can expect one of those offers to be accepted. Now you have a house with a fair market value of $200,000 that you can purchase for $120,000 – and you can easily find someone who will want to purchase it for $145,000, because that is still $55,000 under value.

You have just made $25,000 without risking any of your own money… and you have helped someone else find a great deal.

[Ed. Note: Dean Graziosi has been an active real estate investor for over 20 years. His first two books, Totally Fulfilled and Be a Real Estate Millionaire, were New York Times bestsellers. And his newest book, Profit From Real Estate Right Now, is already out-selling his previous book - which was the fastest-selling real estate book in America.

Dean offers proven programs that teach people to succeed as investors, starting with little or no money, credit, or experience. His free online investors' website and free training calls reach thousands of people every week. For more information, please visit www.deangraziosi.com.]

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What’s Your Back-Up Plan?

By Bob Bly

Most of us think that bad things can never happen… or that they only happen to “the other guy.” But what happens when you become “the other guy”?

You – and I – need a “back-up plan.”

This could be:

1. Investing prudently and building your net worth to the point where you can live off your investments.

2. Learning a second skill or profession.

3. Creating and selling a line of products – anything from candles and perfume to exercise videos and how-to books.

4. Collecting a sizeable inheritance that will enable you to live the life of a gentleman or lady of leisure.

5. Marrying someone with a good income who will support you in the style to which you would like to become accustomed.

Of these options, my own back-up plan is #3 (mainly because #4 and #5 didn’t pan out).

A few years ago, I began to think, “What if something happens that makes me unable to continue making a living as a freelance writer?” So I started my own Internet marketing business, creating and selling information products – e-books, audio programs, and videos – online.

Today, my little Internet marketing business generates a six-figure income for me… yet I spend only an hour or two a day on it!

Do you have a back-up plan? If not, do you intend to put one into place soon?

[Ed. Note: Bob Bly is the author of more than 70 books and is an undisputed master of the art of selling. Subscribe to Bob's free e-zine, The Direct Response Letter, and claim your free gift worth $116.

If you don't have a back-up plan, here's an idea: Do what Bob did and set up your own Internet business selling information products. ETR can help you get started. Learn the details here.]

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Lower Your Blood Pressure With Fried Eggs

By Kelley Herring

Keeping your blood pressure in a healthy range is essential to prevent heart attack and stroke. And while you probably already know that maintaining a healthy weight and exercising regularly are two ways to keep blood pressure under control, a recent study indicates that eating eggs can help too – especially fried eggs.

When you eat an egg, enzymes in your stomach and small intestine produce blood pressure-lowering peptides. And those peptides act like ACE inhibitors, the widely prescribed blood pressure-lowering medications. But unlike pharmaceuticals, eggs don’t come with a long list of warnings and detrimental side effects.

[Ed. Note: Kelley Herring - founder of Healing Gourmet - has created a revolutionary health transformation program called Your Plate, Your Fate. In this 7-part program, you'll learn how to protect your health and optimize your weight by maximizing the nutrients in your food. Plus, you'll get 3 bonus books to help clear your kitchen of harmful ingredients, spot the nutritional deficiencies that could be setting you up for disease, and the 20 tests your doctor should perform (but probably hasn't) to guard your health. Learn more here.

For more advice about which foods you should - and shouldn't - be eating to stay in top health, sign up for ETR's free natural health newsletter.]

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The Language Perfectionist: The Proof of the Matter

By Don Hauptman

Consider the following sentences:

• “Whey protein has been proven through scientific research to be very beneficial….”

• “Yet few of them understood the investments they held, many of which had proven to be junk.”

• “It’s not as if this exact rumor hasn’t been proven false time and time again….”

In each of the above examples, proven should be proved.

According to Bryan Garner in Garner’s Modern American Usage“Proved has long been the preferred past participle of prove. But proven often ill-advisedly appears….” He goes on to explain that proven “properly exists only as an adjective,” as in “a proven success.” An exception is traditional legal terminology, e.g., “innocent until proven guilty.”

• • •

Follow-up: In a recent column, I pointed out that the word antisocial implies hostility and aggressiveness, so someone who simply wants to be alone should be described as unsociable. “What about the word asocial?” a reader asked. “How should that be used?”

Here’s my answer: The prefix a- means not, and asocial can mean both unsociable and antisocial. Because of that ambiguity, I recommend that you avoid it. Choose unsociable or antisocial, depending on which meaning you want to convey.

[Ed Note: For more than three decades, Don Hauptman was an award-winning independent direct-response copywriter and creative consultant. He is author of The Versatile Freelancer, an e-book recently published by AWAI that shows writers and other creative professionals how to diversify their careers into speaking, consulting, training, and critiquing.]  

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It’s Fun to Know: Drown-Resistant Zombie Spiders

A team of scientists at France’s University of Rennes accidentally discovered several species of spiders that can “return from the dead” after drowning.

The three species of wolf spider, two of which live in flood-prone salt marshes, were part of an experiment to see how long they could survive underwater. They were kept in water for more than a day, until they stopped moving, showed no signs of life, and had apparently died.

The researchers thought the experiment was over. But the spiders, left out to dry before a final weighing, regained consciousness after a few hours. Apparently, they are able to go into a self-induced coma that allows them to survive for extended periods of time without air.

The researchers are now investigating other spiders and insects that are found in watery habitats.

(Source: National Geographic)

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Word to the Wise: Acumen

“Acumen” (uh-KYOO-mun or AK-yuh- mun) – from the Latin for “to sharpen” – is quickness of perception or discernment; shrewdness shown by keen insight.

Example (as used by David Schiff in The Atlantic): “The family store gave him [Aaron Copland] a sharp business acumen – acquired, he would say, by manning the cash register – that few of his rivals possessed.”

[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]

Copyright ETR, LLC, 2009

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This entry was posted on Saturday, May 16th, 2009 at 5:10 am and is filed under Daily Issues .