JORDAN & JENNY’S NEWSLETTER - JULY 2008 -

Open Mind

I used to think foreclosed homes are bad. Now I specialize in buying foreclosed properties. Thanks to my mentor Jeff. The first time I heard him speak, he says something like if your glass is full, how can you learn new stuff? Empty your glass, have an open mind, and see what else are out there. I decided right there I was going to listen what he had to say and it changed my outlook on foreclosures. I didn’t know why I think foreclosures are bad, I just thought they were bad. It must be my past conditioning. I heard people talking negatively about foreclosures. It’s bad if they lose their homes, it’s bad if they trash the house, but it’s good if I can buy them cheap, it’s good if I fix them up and put a nice family in the house, it’s good that I am getting positive cash flow out of the house every month. So who to say foreclosures are bad, it just depends on how you see it and which side you are looking at.

Freedom vs Security

I quit my job and went out on my own to invest in real estate. Some people tell me it’s risky to invest in real estate. It is if you don’t know what you are doing. I spend a lot of time and money learning how to invest. Some people don’t so they think it’s risky. Some people think having a steady job is security. The banks like it if you have a steady job. But according to Robert Kiyosaki, having a job as your only source of income is risky. What if you get sick, get laid off? If you don’t show up at work, there’s no money coming in. Buying rental properties are different. Regardless of whether I work or not, the tenant has to pay rent every month. Now if I build up my rental cash flow to be equal or greater my monthly expenses, I am financially free, meaning I can choose not to work and the money still comes in passively. What’s more, the tenant eventually pays down my mortgage and I’ll have a debt free house plus increased cash flow. Awesome! I love passive income. I now have the time and money to do whatever I want. This is freedom and true security.

How Exactly Do We Invest?

Our friend usually ask us, how do you actually do the investment? Let me briefly describe it without going into too much details. We work with realtors to send us information on foreclosed properties. We then negotiate with the bank to get the best deal possible (usually we get 1 property for every 60 offers we send out). After having it under contract, we send out an inspector to inspect the house, take picture of the property and the neighborhood. We ask 3 contractors to give us bid on the rehab and choose one to work with. We have our property manager to go to the property to estimate how much it can be rented for after rehab. Then we close on the property, start the rehab, at the same time start looking for tenant. When rehab’s done, we have a project manager to inspect the rehab work to make sure it’s done right. Then put a tenant in there and start collecting rent. We have put together pictures of the latest project that we did. Hope you like it. By the way, we are selling this property too.

Better Investment

Are you tired of losing money in the stock market? Getting low returns from mutual fund? Or is your money just sitting in the bank making you less than 3% interest and have the bank come around and charge you 20% on interest for using their credit card? Are you looking for an investment that’s guaranteed to give you income by the government, and is secured by real estate? Most importantly, are you interested in making at least 8~12% interest constantly? Here is your chance. We are selling one investment just like it. I have been talking about how to invest in real estate for several months, teaching people how to find the power team member. But what if you don’t have time to do that and is looking for a turn key solution? We have negotiated with the bank, qualified the area, rehabbed the house inside out, and found a qualified tenant in there. All you have to do is: nothing!!

So here are the numbers:
- 3Bed/1bath
- 1140 sqft
- Rent: $800/month
- Tax: $671
- Totally renovated
- insurance: $700
- Net operating income: $7,269
- Market value: $85,000
- Asking price: $64,900

Return on Investment: 11%

Here are some concerns people might have:

Q: I don't want to get phone calls from the tenant in the middle of the night to fix the toilet.
A: When we transfer the property to you, it’s already being managed by professional property manager. They will take care of the problem for you. Plus, the house has just been renovated, you will have a problem-free property when you buy it.

Q: What if tenant trash the house, or doesn’t pay the rent?
A: The tenant is sponsored by a government program called Section-8 Housing. The people who are in the program are typically low income or handicapped people. And because it’s not easy to be on the program, they want to stay in the program as long as possible. If they trash your property, you have the right to evict them, and they will be removed from the program. So it’s not their best intention to trash your house. Every month, the government sends a check to your property manager, and the property manager will send you the fund after deducting their fees.

Q: How do I know I am getting a good deal?
A: We provide you the sold comparison houses in the area. So you know how much the houses are sold for. We then deduct 20% off from the market value so we know you are clearly getting a great deal.

Q: What if I apply for a mortgage?
A: Even better! Believe it or not, you will be getting higher return by using other people’s money. Let’s say you borrow the money with a 30 year fixed, 7% interest, and 20% down payment. Your net operating income will decrease to $3177/year. But because you only invest 20% of $65000 in cash, which is $13000, your cash on cash return will then become 25%. Yes, that’s right. I actually have a term for this: Cha-Ching.

If you are interested in getting more information on this property, call me or email me. I will be happy to answer any questions for you. Don’t worry if you are not buying, we know it’s not for everyone. Besides, you will know better on what exactly we do.

For more information on this property and other great opportunities, check out our website at www.vantagerei.com