venomous viper speaks

I can't remember whether I blogged on this before or not, and I'm techie challenged so,,,

    There are a lot of developments out there right now that are  in trouble. Too many lots, homes selling for less than you can build for, by a lot. I think in some instances, this is an area being overlooked by investors, if you're able to do the following.

   I found a development in so tx that had 69 lots and only 3 homes. All lots had streets, lights and exterior was mostly fenced. Great city in demand and fantastic school district for elem-college. I decided to contact the developer and check his motivation. Lots were selling for 16-30K depending on size and location. I realized the developer was big time cash poor and needed to move something and reduce his debt service. I made him an offer on 5 lots and it was accepted. I built 5 homes and kept them as rentals. It added life to the area and a builder came in and built 2 more.

My 5 rented well and I bought 5 more. Same process and built on each and rented all of them.

Now, the development really looked good and had 15 homes. The developer had only received enuff to get the lots sold, released from his mortgage. I knew he was still hurting.

It was time to swoop in. I made an offer on the remaining 49 lots and received acceptance of 12K per lot. I had a couple conditions to use as back out. The development was u shaped and had 2 street entrances.

I had planned to go to the city to see if they'd allow a change to gated community and allow me to gate the 2 entrances. I received approval. Gaated is much in demand in s. texas. My lots were increased in value to 23-39K instantly.

The 2 entrances were gated, with electric, and phone was total of less than 20K. Prorated, it amounts to approx $300 per lot and increased values by double.

I've sold 2 lots, and sold 1 build job after the change. I have several good inquirires at present and hav not listed the lots. Minimal investment(after purchase) for maximum return.

You might want to scout around in your area for these projects. If you don't have the funds, find some retired person that is getting 1.5% annually on his money. there are lots of ways to make money in this real estate gold rush! Not for everyone, but definitely a viable method. Good luck. Rich in FL.

What a letdown on the foreclosure sale. I spent $700, and flew all day for a waste of time. It was a good learning experience.

Upon arrival at the courthouse, I was asked to register. Name , address and SHOW the cashiers checks! Then I was asked what my top price was I was willing to pay! I was allowed to write down my # and only show trustee. I felt uncomfortable doing this.

I was also asked which property I was bidding on. They started with the property that had the most people registered, the one I wanted.

Then the next wierd thing. The minimum price was bid on behalf onf lender. Then the trustee said, "Rich" opening bid. I bid it up. Then "Brandon" was asked for a bid. She went person by person through the 7 bidders. It took forever because on many rounds, the bidder would have his name called and say "pass", then come back in on following rounds. It took nearly 15 minutes on one property, that would be done in TX in about 60 seconds.

 I went out at my previous target price of $120,600. The bidding continued to $143,500. It was bid on behalf of the holder of the 2nd. They were prepared to go to $150,000 she said later. A nice house for the price, but not a super steal imo.

Have a great weekend. Rich

After a 12 hour travel day flying from Ft Myers to Cinci, to Seattle, to Spokane, I'm here! I inspected the house, 2 story with basement late last night.

The paperwork and investigation has all been done. The home is in saleable condition with only general cleaning needed. It has been listed at 225K but has not sold. It is located in a nice mid area of homes. The house next door has a real estate sign and also a sold rider on it. A home 5 doors down has a rent sign. Asking rent is $1400, a little high in my book.

I'll do a little more scouting on comps this morning. I expect to find this house easily saleable for 180-190 with just a fsbo sign in yard. I have a maximum target price of 120K. I expect this to sell quickly and will know whwther I have any chance when the second bid is made.

There is a first with US Bank. It is in the amount of 106K. There are additional fees owed of 6K, bringing the total to 112K. The problem or the good part(still tbd) is that Wells has a home equity loan in 2nd position for just under 90K. I know that Wells , like most banks, is so screwed up at present, that they may not be paying attention to this . That is my hope. If they bid to protect their second position, then this will be a short auction and wasted trip for me.

You never know how these deals are going to go. Even though I've been through a lot of these and have purchased, the day of the auction is exciting and nerve wracking. Will you get any deals? Any surprises? It always gives me an uneasiness in the pit of my stomach. I'm attempting to benefit from someone elses' misfortune and that is contrary to my inner core. Even though I had nothing to do with their failure, it is still rough when they are there watching.

I'll post results later in Part 3. I also expect to gain a perspective on values. activity etc in this area by attending this auction. Be back later. Rich in Spokane.

I've been made aware of a foreclosure sale taking place in Spokane,WA for a Liberty Lake house. I'm familiar with the area, sits between Spokane and Couerdalene. Beautiful spot.

  A friend of mine knows the property and the loan situation. I've checked the liens etc and am prepared to buy. This may amount to a wasted trip. This is why.

There is a first of approx $105,000 including costs. Home was listed for 210K and had several offers in the 180-190 range. Seller was unable to accept the offers due to a home equity line of credit of an additional $100,000. Lender was too stupid to do a short sale.Or, maybe they were too smart and plan on cureing the first and buying at foreclosure.

If the second lender fails to show up, I have a good chance to purchase. Home is nice and would sell in the entry level market for near 200K. WASH has a wierd law against flipping without a General Contractor signing off. This home would be sold by owner(no commission due) and sold as is, with no repairs.

Thursday will be travel day from FL to WA. I'll post part 2 thursday or friday before the sale. If I acquire it, I'll blog the progress, step by step. If you're in that area, you're invited to the sale. Rich in FL, and heading to WA.

I like to share personal experiences on BP, rather than all this concept stuff that is often posted. My info is first hand. Either I've done it on seen it done.

How would you like to play golf every day for about $5 per day, multiple rounds? If you don't want to walk, $2 per day for a RIDING cart. For about $7 per day, golf 18, 36 or 54 holes!! I did this for several summers.

The Course is gorgeous, lush and green. The temps are 70 Degrees, roughly EVERY DAY. Did I mention this was a Country Club ?

For several years, I belonged to Redwood Empire Golf and Country Club. It also has a Pool for the fam. (speaking of the family, the rate I quoted was a TOTAL rate and includes my wife!!) This is located on the Redwood Coast of Cal, in Fortuna, 25 miles south of Eureka. Now you think, there is the catch, country Club membership!!

The normal membership fee is $1500, one time. They give EVERYONE a 50% discount! $750 and your family is a member for life. The monthly fee was $140 last time I was there and the cart was $60 per month. There are less than 500 members. I NEVER had tee time problems and always was able to get on. Huge pine trees, lakes and good contour. A nice challenging course.

If you have an RV, there is a highly rated RV park with store, pool and spa for sore muscles after 3 rounds of golf. The park is on the side of a large river with great walking trails. The monthly fee is about $500 per month.

So, here is another beautiful way to spend a year or more for very little money. Once you have a rig, your monthly expenses are WELL under $2000 per month. The RV park was Riverwalk, and there is gorgeous scenery everywhere. Giant Redwood state parks, the CA  coastline, Oregon coast 100 miles away, and vintage National historic towns to stroll through.

A very relaxing way to go. I also played on 2 county softball teams, Over 50 and over 55 league. I was a stud on over 55 and got killed on the over 50! I still have dents on my shins to prove it.

This was a wonderful way to spend time. Chased the deer off the course every morning. Took a mulligan if I wanted. This was as much fun as you could have for next to free. The Club even allowed you to put your membership on "vacation" for a few months if you went away and didn't have to pay any dues.

Man, when I think about this, I wonder , what the heck am I doing in FL? If you desire more info, reply or e-mail. I just don't want you to feel retirement is not possible for you. It doesn't take much money, if youare willing to look around.

Other benefits of this lifestyle?

1. Kids can't come back home!

2. When you visit them, you can stay in your own rig and leave when you want

3. More flexibility in staying as long or short in one place as you want.

4. You may select any place you want as your home. I call this a "domicile"

   Part 3 will explain how to cut LOTS of your expenses  and TAXES with this lifestyle. It'll be short but very powerful. Possible to save THOUSANDS annually with just one little trick. Hope you'll come back for more. Post a comment if you read this. Thanks. Rich in Fl today, and Missolula thursday!

I have to disagree with some of the info posted here on Bigger Pockets about this topic. Here is my view. You really can take it all with you or rather leave it all for future generations. It really isn't the mystery that most people try to make it out to be. DISCLAIMER---I'm not a CPA, attorney, or EVEN a college grad. Just the smartest, most knowledgeable, well versed real estate guy you'll ever know.(I was actually called that by an acct friend of mine once!)tic. There are a lot of estate planning things you can do.

Of course, if you don't own real estate or a business, don't worry. You won't have any assets that the govt. will still want!! I say that jokingly, but truthfully. 1/3 of the people 2 years ago were worth less than zero! They had a negative net worth. If you added up their assets and deducted liabilities, they had a negative net worth.

If you took the HOME equity that people had out of the equation, the % of negative net worth people jumped to 2/3! Well, guess what has now happened? Most have lost their home equity and now the number of those with net worth below zero is 50%. SO, I stand by my previous comment that if you're in the majority, you don't need to worry. Do your own calculations and see if you need the rest of this blog.

If you do need or think you'll need some advice, here is what one couple did...

 My wife and I have a first to die trust. First spouse to die has assets divided into 3 trusts. One for surviving spouse in a survivors' trust, one for an exemption trust of the deceased up to exempt amount, and the balance to a survivor trust . These eventually work their way down to a generation skipping trust that is an IRREVOcable trust for asset protection.    It has to be irrevocable or it may be attached by creditors. You can be forced to change the terms and be subject to creditors in a REVOCABLE trust. Attorneys love those kind, because they make big bucks defending your butt.  We set this up for the benefit of grand kids and future generations.There are certain requirements for them to qualify for a portion of  the funds. The funds may only be used for certain items and they can't have any convictions for drug or alcohol related incidents. I don't want my hard earned money going up someones' nose. This is all in an irrevocable family trust for their benefit. My wife and I trade turns being the trustee. This trust, by way of the trustess is the actual owner of all interests of all LLCs we have, so those are not touchable either. There is even a Poison Pill provision, but if you want to know what that is, PAYan estate attorney to tell you. If he doesn't know what it is, he isn't a good estate attrny and you need to find a new one, imo.

This is a GST or generation skipping trust. I purposely skipped my 6 kids. I've tried to teach them about money, entrusted them with money and taught them what they need to do to provide for their families. Some of them have learned these things. Some haven't. Well, if they haven't learned them and put them into practice, what do you think the odds are they've taught my grand kids how to handle money? Nil!! So, this gives my grand kids a leg up that they may not have learned from their parents.It skips some of the estate costs and taxes.

There are other tricks of the trade as Will said to begin the process. There are nice 1031 deals that you may delay the tax consequences literally for ever. You can refi real estate to pull all the equity out to enjoy tax free. Lots of ways to NEVER pay income taxes, or estate taxes,imo.

My wife  DID make  me purchase a substantial life insurance policy (term) to pay any significant portion of the estate taxes that may be owed. That  was so the estate would not be reduced by the tax man before it did some good for the youngins.

I"M NOT AN ATTORNEY, but paid a ransom for this info. I avoid the taxes by just not selling, and continue the growth of the estate, pass much of it on with no taxes and leave a legacy for future generations. My wife and I direct it, but have no liabilities to lawsuits etc. We also live an enjoyable life, travel a lot, give some away and look in the mirror each day and feel good.

This has been a fun experience and we continue to have fun ones which we readily share  on a daily basis. Rich in FL.