Top 10 Mistakes to Avoid in Real Estate Investing (Part 1 of 2)

Posted on May 23, 2013 by Ross Nelson

In real estate, like many facets of life, it can often times be more useful to know what NOT to do than to know what to do. Being in real estate for many years, I have seen a pattern of mistakes that most people tend to make as beginners.  Since 1979, we have helped over 50,000 people investment in real estate, and of all the mistakes we have seen, the following 10 make up over 95% of them.

If you are able to stay clear of even some of these mistakes before you invest in your first or next property, than you are way ahead of most investors out there.

The following are the Top 10 mistakes to avoid in no particular order of importance, because they are all important:

1. Thinking you have to invest in your own backyard: Buying a house to live in is an emotional decision. You want to live near friends, family, in safe neighborhoods, close to entertainment and your job location. Investing in real estate is a financial decision and must be treated as such. If you live in a tenant-friendly state like California, I highly encourage you to look elsewhere. Similarly, if you live in areas like Los Angeles, San Francisco, New York City, or Seattle, consider branching out because it’s still cheaper to rent there than it is to buy. Live where you want, but invest where the numbers make sense. One must choose a geographic location to invest based off of logic, research, and the numbers.

2. Not setting specific investment criteria: I can’t stress the importance of this one enough. Everyone needs a plan, because “Failing to plan is planning to fail”.  Real estate needs to be an unemotional event where you stick to your criteria and stay focused.  In real estate, being picky is good but being a perfectionist is unrealistic.  Allow your investment criteria to tell you when to say yes and when to say no. If you don’t have clearly defined criteria, it could result in major headache and costly mistakes. Real estate investing is not “one size fits all,” meaning what is a good investment for you might not be for the next person. Don’t fall in love with an investment property, fall in love with your criteria and you’ll quickly realize that there’s no such thing as a “Once in a lifetime opportunity.”

3. Investing in a particular market because you have family nearby. This is one I hear often and sadly it gives people a false sense of security.  Family and money, more often than not, complicate things rather than simplify things.  Does it make sense that your brother who is a math teacher goes and looks at a broken garbage disposal?  Better yet, if you plan on owning this property for 10 years, how many family favors do you have stored up? Work with a professional property manager to manage your property rather than a family member that has their own life and really doesn’t know a whole lot about real estate investing anyways.

4. Doing things simply because “That’s the way I have always done them.” Life moves very quickly these days, and technology is only increasing this rapid rate of change. Thankfully, these changes are for the better. Eight years ago, you never have been to type in the address of the property you are buying on a computer and check rental comps, recent sales comps, look at aerial photos, and virtually stand in the street facing your property. My point is this: Working with an outdated CPA, or not upgrading your computer or software, or not continuing to educating yourself on the changes in financing and the real estate market will hinder you from setting  yourself up for financial success.  Never stop learning!!!

5. Working with the wrong people: You absolutely need to surround yourself with a trusted network of experienced professionals that have an extensive track record of solid performance.  I understand people occasional make mistakes, however life is too short to have your retirement be the guinea pig for some “new kid on the block” company.  Real estate investing demands well-educated and ethical individuals that are not just “in the business” but are actually investors themselves and walk the walk.

In part 2 coming up next week, we will reveal 5 more mistakes to avoid. Stay tuned!

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The Solo 401k Plan – The Power to Invest in Real Estate

Posted on May 17, 2013 by Dmitriy Fomichenko

The Solo 401k Retirement Plan offers powerful advantages for real estate investors.  A Solo 401k Plan (also known as Individual k) is an IRS-approved Qualified Retirement Plan that has been simplified for the self-employed and those who own a small business.  The structure of the plan gives participants more options than a conventional 401k.  The Solo 401k’s unlimited investment capability, loan feature, and tax benefits make it the perfect vehicle for investing in real estate.

Unlimited Investing

While conventional retirement plans only allow investment into traditional assets such as stocks, bonds, and mutual funds, the Solo 401k Plan can be invested into both traditional and non-traditional assets, such as real estate.

Investing in real estate with the Solo 401k is fully allowable under the Employee Retirement Income Security Act (ERISA) of 1974.  The only exceptions are those outlined in the Internal Revenue Code Section 4975, which includes collectables and any transactions with disqualified persons.

The Solo 401k can be invested in the following types of real estate:

  • Residential property
  • Commercial property
  • Single family rental property
  • Multi-family apartment buildings
  • Townhomes and condominiums
  • Mobile & Manufactured Homes
  • Raw Land

As well as real estate related investments:

  • Mortgage notes
  • Tax deeds
  • Tax liens

The process of investing in real estate with the Solo 401k is very similar to purchasing a property personally.  After establishing and funding the Plan, the funds are ready to be invested into real estate.

Once a property is identified and due diligence is conducted, the property is purchased in the name of the Solo 401k plan.  The title to the property and all transaction documents are in the name of the plan.  As trustee of the plan, the participant signs all documents in the name of the Solo 401k.  All expenses must be paid from the Solo 401k plan, and all income and gains from the investment must be returned to the Solo 401k account.

If the Solo 401k account does not have sufficient funds to purchase the property, there are two possible options.  First, the Solo 401k can purchase an interest in the property in partnership with another non-disqualified person.  For example, the Solo 401k can be used to purchase 50% of the property with a non-disqualified partner purchasing the remaining 50%.  The investment from the Solo 401k account would go directly into the property.  All property expenses would be divided between partners, in relation to the percentage of ownership.  All income or gain from the property would also be divided between the partners in relation to the percentage of ownership in the property.

A second option to purchasing a property with the Solo 401k is obtaining a non-recourse loan.  A non-recourse loan is the only form of debt financing that can be used in conjunction with the Solo 401k.  A recourse loan is considered a prohibited transaction.

Direct Access and Speed

Investments using the Solo 401k do not require custodian consent.  The plan participant acts as the trustee of the plan and has checkbook control over the plan funds.  The investment can be made as simple as writing a check.  Decisions can be made and acted upon quickly.  This gives an advantage in real estate investments, in which time is of the essence.

Loan Provision

The Solo 401k also contains a provision which allows the participant to borrow from the account at any time and for any purpose.  The Solo 401k loan can be made for up to 50% of the account or $50,000, whichever is less.  These loans can be used for any purpose.

Tax Benefits

Using the Solo 401k to purchase real estate enables tax-free or tax-deferred gains and income generated by the investment property.  Profits from real estate investments return to the account to continue growing, sheltered from taxes.

The Solo 401k retirement plan offers many advantages, making it the perfect vehicle for real estate investments.  To learn more about its features and benefits please visit: http://www.sensefinancial.com/services/solo401k/

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What is YOUR Formula for Success?

Posted on May 8, 2013 by Scott Pastel

What do you feel has made you successful so far in life? If you feel you are still on the road to success but haven’t arrived yet, what traits do you feel are helping you succeed and which are hindering you?

We all have different strengths, and we all use different measures for success. All too often the measuring stick our society uses for success is money, but there’s a whole lot more to life than how much money you make, what kind of car you drive, or how much you have in the bank. I’ll be the first to admit that money sometimes makes life a little easier to live, but it does not make us happy in and of itself. However you define success, it is usually attainable with a focused effort. How we define and attain success in life is what makes each of us individuals.

There have been many great books written on the subject of success. In my experience, you are what you read and who you associate with. The concepts of mentoring and association are very powerful tools that allow you to combine the collective skill sets of many with your own.

There is a book on success titled: “The 7 Habits of Highly Effective People.”
It outlines characteristics that have helped many people become successful. The following is a list of author Stephen Covey’s empowering philosophies:

1.) Become proactive in life and take responsibility for your choices.
2.) Begin with the end in mind and allow yourself to envision a successful completion.
3.) Put 1st things 1st. Have a plan before you start and take the time to sit down and articulate your goals.
4.) Look for a win – win in all you do. In order to succeed you must possess the ability to work well with others.
5.) Seek 1st to understand, and then to be understood (Communication skills)
6.) Synergize: Combine strengths of many through teamwork for solutions.
7.) Work with a sharp saw and always work to improve your skill set.

It is often just a matter of channeling your collective skill set that helps you succeed. Incorporating these 7 habits into your daily life will help achieve a balance in 4 important areas: physical, emotional, mental and spiritual.

So what is YOUR formula for success? Click on the comments link below and share your thoughts!

Posted in Simple Financial Wisdom, Uncategorized | 1 Comment

Land Trusts Made Simple

Posted on May 2, 2013 by Randy Hughes

Recently I was asked to fly out to sunny California to speak at the Marshall Reddick Real Estate Network’s “Millionaire Club” meeting on land trusts.

What I explained to their investors that evening was that the cornerstone of asset protection is financial privacy. Financial privacy begins with not making public the extent of your holdings. Trusts provide privacy by taking ownership of assets out of your name (or preventing them from going into your name to begin with) and keeping you out of the “public eye.” If someone does get a judgment against you, they cannot levy against your trust.

Land and the improvements built upon land have been the most exposed evidence of wealth since man began accumulating assets. Imagine walking out to your mailbox one breezy Saturday morning and finding a letter from an attorney. The gist of the letter is that you are being sued for 1.2 million dollars because one of the tenants in your 10 unit apartment building was broken into, robbed and beaten by an assailant. The negligence claim against you includes pain, suffering, medical bills, legal fees, loss of income, personal property replacement, and perhaps long term disability payments. How can you protect yourself from unwarranted lawsuits?

Now, just because you have put your apartment building into a land trust doesn’t mean that you won’t get sued. But, let’s analyze what protection a land trust affords the landowner and how this type of ownership could slow down the legal eagles swarming around your assets.

First, in a land trust, you do not hold the title to the property (as is typically done by most property owners). Your Trustee is the “owner” and therefore, his/her/it’s name appears on the local county registry as the owner of said 10 unit building. This is your first line of defense. NEVER OWN PROPERTY IN YOUR OWN NAME! (Unless it’s property you don’t mind losing–which may be an intentional move on your part).

So what exactly IS a land trust? A trust is nothing more than a piece of paper. With this legal document (known as a TRUST AGREEMENT) you transfer the ownership of property to a TRUSTEE. A trustee can be a friend, business associate or institution (i.e. a bank, title company or law firm). The trustee technically “owns” the property and is shown as the owner of record at the county seat.

However, the trustee cannot do anything with the property unless directed to do so by the BENEFICIARY. The beneficiary of the trust agreement is usually the person who put the property into trust to begin with. The identity of the beneficial owner is held privately, protected from the public eye in the Trust Agreement which is not a public record. The beneficiary retains the right to full management and control of the property. The trustee executes deeds, mortgages or otherwise deals with the property at the written direction of the beneficiary. The beneficiary collects rents (if the trust holds title to rental property), improves and operates the property and exercises all rights of ownership other than holding or dealing with the legal title. When the beneficiary dies, the trust does not cease (or die with him/her). The trust continues on for the benefit of the SUCCESSOR BENEFICIARY.

As a result of this almost continuous life, a trust bypasses probate upon the beneficiary’s death, thus giving privacy to the transfer of assets after death. Trusts can hold real estate, notes, options, mortgages, or leases.

The trust agreement (signed by both the trustee and the beneficiary) spells out the rights and duties of the parties involved. All the benefits, rights, and powers of ownership are retained by the beneficiary. Different types of property can be placed into a land trust including but not limited to; land, improvements, leasehold interests, options and a variety of personal property. The distinctive feature of the land trust is the separation of ownership from the rights of ownership. It must be emphasized that a trustee for a land trust is NOT an agent of the beneficiary in any sense under the law.

Once you have placed each of your properties (or individual assets—it doesn’t have to be real property) into its own individual trust, you have at least removed yourself from the public eye. Now, don’t thwart this move by bragging to all of your friends about the 10 unit building you own over on Main Street, USA. Keeping the knowledge of your assets private is your second step to concealment and therefore, protection from unwarranted litigation.

When you first acquire property is the time to place it directly into a trust. Do not put the property into your own name first! This way no record of an individual’s ownership exists in the public record. However, if your property is already in your name now, it’s still better to transfer the ownership into a trustee’s name then to leave it in your own name.

When placing your property into a land trust you will need the services of a trustee. The best trustee is a private individual that lives in a state other than yours and certainly lives in a state other than where the property is located.

The reason why you want each property in its own individual trust is for the utmost protection of each asset. Should someone get a judgment against you it will be much harder (and a lot more expensive) to attach each and every trust. If all of your assets are located in one trust, it’s a slam dunk for your opponent, once he gets his judgment against you. Remember, the name of this “game” is: delay, delay, delay and make it as difficult and expensive as possible on your adversary. This process of looking for the real owner is one in which you want to put up as many obstacles as possible. You are trying to slow down the process and make it expensive to reach you and your assets.

Ultimately the property itself can be reached in a lawsuit (even with an out-of-state trustee), but your plan should be to stay as far away from the eye of the storm as possible so they don’t reach any of your other assets. A judgment lien levied against your individual 10 unit building is one problem. But, a judgment rendered against you–in your personal name, is a much worse situation.

Start creating your own trusts today and understand the process. You DO NOT need to be an attorney to form your own trusts. My name is Randy Hughes, a.k.a. “Mr. Land Trust” and I have been using Land Trusts for over 30 years. To hear more, you can watch a recorded online presentation I did recently with Marshall’s team by CLICKING HERE. If you have any questions please click on comment link below and I will get back to each question personally.

Posted in Real Estate, Simple Financial Wisdom | 1 Comment

What Does Real Estate and Baseball Have in Common?

Posted on April 22, 2013 by Ross Nelson

There’s nothing more American than baseball, real estate and apple pie. What do these three have in common? They all use a recipe for success.

When owners and coaches put together a successful baseball team, they look for strong fundamentals and consistency of performance in players. They don’t always look for home run hitters, but instead they look for players that are consistently able to get on base and occasionally hit home runs. They know that in the long run, that’s what it takes to build a winning team.

Building a real estate portfolio is a lot like putting together a baseball team.

You can buy already mature properties in established neighborhoods and pay a premium, or you can buy less expensive properties in up and coming neighborhoods where the rent is affordable and the vacancy factor is low. You can make the mistake of setting your criteria so rigid that you end up overlooking what’s really important, winning the game.

You don’t always have to swing for the fences. Sometimes doubles and triples are better than aiming for the fence and striking out. Often times in real estate, a lot is at stake much like a World Series playoff game. Hitting consistent doubles over and over again is the best strategy to winning the game.

So what exactly do we mean by doubles and triples? Playing it safe and aiming for realistic ROI’s is a good example. All too often have we seen someone aim so high that they unknowingly increase their risk and end up putting themselves in a position they did not want to be in. This can lead to excessive vacancy and maintenance, or in other words, striking out.

We like up and coming neighborhoods because more people can afford to live there, there is better cash flow, and greater profit potential. The property should be close to good schools, convenient to shopping and a reasonable commute to the job center. Properties offered by our brokers to network members are often in these up and coming areas and a lot of due diligence work has already been done. We always encourage you to check things out for yourself, and make our Real Estate Advisors part of your team.

When putting together your real estate portfolio, look for consistency of performance. Look for median priced homes in good neighborhoods where the majority of people can afford to rent. Look for areas of high rental demand and low vacancy factor. It does your portfolio little good to have the bragging rights to owning a house in the best neighborhood of the city if only 5% of the population can afford to rent there. Carefully selected homes, with properly structured 30-year fixed rate financing to assure cash flow, are the key to building a profitable real estate portfolio. Remember, you can’t win the game in the first inning. If you can bat consistent returns on safe but profitable investments, you will do better in the long-run. Real Estate investing is a marathon not a sprint.

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What Would YOU do with One Million Dollars?

Posted on April 15, 2013 by Eric Lorimore

Congratulations! You have just won One Million (tax free) dollars!

How would you spend it? A million dollars may sound like a lot of money, but it’s amazing how quickly it can disappear if you are irresponsible with your finances. There was a time when you could put one million in the bank and live comfortably off the interest income from CD’s and savings accounts.  Today, inflation is greater than the interest, so if you plan on retiring at 60 and living past 75 it’s going to take some planning to make your million last.

When news first gets around of your newfound wealth, you will probably find yourself suddenly surrounded by distant family members, long lost friends and a cousin you never knew you had all looking to be your best friend. Don’t be fooled by the real cause of your sudden popularity.

So what do we really want to do with the money? Most people will almost immediately make a trip to the local car dealership, go on that dream vacation, or remodel their kitchen to what they have always wanted.

Statistically, 50 percent of those who win the lottery and take lump sum payment spend all of their winnings within 5 years! The 50 percent who still have all or most of their winnings after that point have usually consulted a financial advisor and/or invested in real estate. When I asked my wife what she would do with a million dollars, she said she would first pay off the house where we live, then buy a second home in our favorite vacation spot on the lake and invest the rest in 2 or 3 managed mutual funds.

Here in Southern California it can be very easy to spend all your money on one house. However, unless you have a substantial amount of additional money set aside, that may not be the best investment strategy. You will quickly find out a million dollar house comes with $13,000 per year in property taxes, $3,000 per year in insurance, $8,000 per year in utilities, and another $5,000 per year in maintenance. Many people don’t realize a one million dollar home, even owned free and clear of any debt, can still cost at least $29,000 a year to own.

What I recommend to people that receive a large sum of money, an inheritance for example, is do nothing with the money for the first year. Put the entire sum in a 1 year CD and live your life as if nothing has changed. Happiness is not measured by material things, and if you let the thought of money trick you into thinking differently you will be sadly mistaken.

After the one year has passed, I would purchase seven $125,000 single family homes all in cash in appreciating areas. This would produce about $5,000 per month in rental income. I would then pay off all of my existing debt with the new $5,000 per month addition. Once I was debt free, I would retire from my job and travel the world; living a happy, modest, and worry-free life.

It sounds that simple because it is. Don’t be like most people and complicate things.

So what would YOU do with your One Million??? Click on the “add a comment” link below and share your thoughts!

Posted in Simple Financial Wisdom | 7 Comments

Property Management: The MAKE or BREAK Factor

Posted on March 28, 2013 by Scott Pastel

Not all property managers are created equal. Some take care of headaches, while others create headaches. They really can make all the difference between a profitable real estate investment and one you end up wanting to sell.

There are a few things you can do in advance of hiring a property manager to see if they are going to be a good choice. First you can do some internet research, and then you can do some phone interviews. Find out as much as you can about them. It is ideal for them to be close to your property, it will be easier for them to show and keep an eye on. Determine how long they have been in business, a good number is at least 5 years. Find out how many properties they manage and how many leasing agents they have. In order to make any money, they have to be managing about 100 properties unless they are part of a larger real estate company.

Ask for client references. Make sure you understand their fees and how long it takes to process your payment. If rent is due on the first and late on the 5th, you should have your money no later than the 10th.  Most PM companies now offer direct deposit to your account which speeds things up. The more electronic their systems, the sooner you get paid.

The strongest trait of a good property manager is their accessibility and how soon they return your calls. There is nothing more frustrating than the feeling of being left in the dark when you have a question or concern about your property at distance. If they are very slow or don’t return your call, it’s time to look for a new one. If your money arrives later and later each month, it’s time to look for a new one.

Property managers are human, have good and bad days, and may be overworked at times. If you treat them courteously, they will usually treat you likewise. Try not to take your frustrations out on them. Some respond better to concisely worded emails than to phone calls. Try not to micromanage your property manager either. Keep your communications to a minimum, just enough to get your concerns addressed.

During a vacancy is really when you can measure the effectiveness of your property manager. First, they have to determine the condition of the property and get the necessary painter, carpet cleaner and cleaning crew out. Then they have to advertise it and show it to prospective tenants. They must also run credit and eviction checks. If they are not well organized, it can seriously delay getting it re-rented. A weekly call to monitor progress is HIGHLY recommended during this time. Make sure it’s put on Craigslist for maximum exposure. Most properties will get re-rented in 60 days or less. If it goes more than 90 days there is a problem. (It is usually the property manager that’s the issue if it takes that long). November, December and January are the slowest months to rent a house.

I find it helpful to remember your property manager with a Christmas card at the holidays to let them know they are appreciated. Your property manager is your baby-sitter, looking after your child while you are away at work. If you maintain a good relationship with them, you are going to get better treatment, plain and simple. You may also choose to send your tenant a holiday greeting. If you prefer not having them know how to contact you, leave off your return address or send it through your property manager. Little things like that can make a big difference!

A tenant is much more likely to renew their lease if they feel their repair requests have been handled in a timely fashion. It is key for your property manager to respond quickly to their requests for service. If you find repair requests coming in too frequently, it could be a sign there are more people living there than are on the lease. If repairs seem to be consistently too high, you might consider buying a home warranty which limits your liability to $75.00 per call.

Ideally your property manager should be doing a monthly drive by to determine exterior condition and an interior walk-through about every 4 months. This is usually difficult to get them to do. The best program I’ve seen is where they had a service go out and change the air filter every 3 months. This was an extra cost service but the installer took a quick look around while he was there and reported back general interior condition. You don’t want to come to the end of your lease and find that the tenant trashed your property.

Your property manager must enforce the late fee and eviction clauses of the lease. If rent is due on the 1st and late on the 5th, they must collect the late fee after the 5th and start eviction on the 10th. This may sound heartless, but tenants will continue to pay later and later in the month if allowed. If you can manage your property manager by following these lessons, you are likely to do very well as a rental property owner.

Leave a comment if you have questions or want to share some insight! And for more tips and advice on how to effectively manage your property managers, email us at info@mrren.com or call (949)885-8180. We have relationships with reliable property managers all over the country and wrote the book on the “Fundamentals of Successful Property Management.”

Posted in Real Estate, Simple Financial Wisdom | 5 Comments

Choosing the Best Credit Cards for You

Posted on March 21, 2013 by Ross Nelson

For someone who is trying to build their credit, choosing which credit cards to have can be a very confusing process.  The three credit bureaus want you to have a mix of “revolving accounts” and “installment accounts.”

“Installment accounts” are payments you make that are always the same like home loan payments and car payments.  “Revolving accounts” are those that can have a different amount due each month depending on what has been spent and what the interest rate is. These types of accounts are credit cards and lines of credit.

Which credit card is right for you?  Credit cards can offer you some rewards as well as build your credit score.

Here are few of the different types of credit cards:

One choice is a reward card that will give you points in an area that will benefit you the most.  Depending on what card you choose, points can be spent on travel, eating out, shopping, or fuel.  Be careful not to spend just to earn points!  The object is to maximize the benefits on the money that you’ve spent.

One important feature is a low interest rate.  If you are going to carry a balance on a credit card, try to do so on your lowest interest rate card.

If you are just beginning to build your credit, you may need to start with a secure card. To get a secure card, you send a certain amount of money up front and that amount is your limit. You then pay back the amount you spent each month. After a few months of doing this properly and paying on time, you should qualify for an unsecured credit card.

Keep the card you’ve had the longest!  Part of your credit score comes from the age of your credit history.  Closing your oldest card will shorten this length of time and lower your credit score.  Also, closing a card can lower your credit utilization, which is also an important part of your credit score.

This card may have a higher interest rate than you would like since it was probably opened when you didn’t have a strong credit score.  That’s okay, as long as you don’t carry a large balance.  It is also important to remember to use it every now again.  Creditors will close accounts that aren’t being used after a long enough time.

To improve your credit score, there are a few basic but crucial guidelines to follow:

  • Don’t spend more than you can pay off
  • Only spend on things you would buy with cash, just use a card instead
  • Don’t leave a zero balance. Keep the balance at 10-15% of your limit and try and never have the balance go above 50%.

Finding the right cards for you may be tricky, but doing a little research will pay off. If you find yourself continually turned down for new credit or if you have additional questions about building credit, talk to our credit coach Jeremy Roberts. He has the best program in the industry that we have seen and he offers members of MRREN special pricing at a discounted rate.

To have Jeremy contact you directly, CLICK HERE and complete the short form. You can also leave us a comment below.

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Adrian Broca: A Story of Determination

Posted on March 14, 2013 by Scott Pastel

Close your eyes for a moment and count to 10. Now imagine spending one full day with your eyes closed the entire time. Many of us would not even last an hour before giving up. This is the life of Adrian Broca. But rather than give up and blame God for losing his vision at the age of 17, Adrian chose to go a very different route.

Ever since he was a child, Adrian Broca dreamed of being one of the fastest runners in the world. Sadly, at age 17 he began losing his vision as a result of a genetic disorder that eventually left him legally blind. But blindness did not stop Adrian from achieving his dreams.

After continuously crashing into obstacles along his memorized training route, he eventually showed the world that nothing can stop him. Adrian chose to not give up and ignored those who told him he shouldn’t be running. He shut the rest of the world out and focused on the one thing that mattered to him the most, being the best at what he loved.

Today, Adrian is on his way to becoming one of the world’s top blind marathoners. He is one of only two blind American runners in the U.S who broke the 3-hour marathon mark in 2011.

“Once I hear the gun go off, I forget about being visually impaired and feel like any other runner out there who has one goal in mind,” said Broca in a 2008 interview. “When I started running around my neighborhood after losing my sight, bumping into light posts and bus stop benches, I was fighting off my blindness, telling myself that this is not going to stop me.”

Adrian not only continued to run his heart out, but he also made school and grades a big priority in his life. Adrian was committed to getting good grades despite his disability, and ended up graduating from Cal State Los Angeles with a 3.6 GPA in Business and Finance.

Adrian has been blessed with the opportunity to compete in the Boston Marathon six times, winning the Visually Impaired Division title in 2010 in 2:57:59. In 2011, Adrian ran the Chicago Marathon in 2:53:26 which qualified him to compete for his native Mexico in the 2012 Paralympic games. That’s an average of under 7 minutes per mile, for 26.2 miles straight!

This year Adrian will be running in his 13th LA Marathon and plans to break his 2011 record. If you haven’t run a marathon before, there are many twists and turns along the way. Depending on how many other runners are crowded around him, Broca uses either an 18-inch modified dog leash as a tether, gripping one end with his right hand, or asks his guide to just run alongside. Finding guides fast enough to keep up with Adrian has proven to be quite a challenge!

Adrian’s miraculous story of sheer determination and unyielding persistence has touched the lives of many and has helped him pick up several sponsors. The Marshall Reddick Real Estate Network has been proudly sponsoring Adrian in his marathon races since 2007. We were so touched by Adrian that we have had him speak at several of our events in the past so he could share his story with others.

After knowing Adrian for 6 years now, we are continuously amazed by his positive attitude and unwavering drive to succeed. Adrian has shown us that no matter what obstacles stand in our way, we can accomplish anything if we focus on our goals and never give up.

To see Adrian’s story and watch his past marathon races, click here.

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When is the Right Time to Sell?

Posted on March 7, 2013 by Ross Nelson

Most people think that the right time to sell your real estate is dictated by the market. That is only 50% true!

The other 50% lies in the reason you bought to begin with. Did you buy strictly as an investment to make a certain dollar return, or did you buy with a specific goal in mind such as to fund a college education? Did you buy because your CPA told you that you needed more tax shelter? Did you buy to create a retirement income? Each of these are good reasons to buy and each has a different answer as to when is the right time to sell.

It is a given that when you buy investment property you will someday sell it. That’s part of the reason why it’s important to have an exit strategy in mind when you buy.

If it is strictly for dollar return on investment, then you follow the rules of the real estate cycle. Buying at or near the bottom of the cycle will yield the highest return, and the cycle length is 7 to 10 years historically before it doubles in value. Keep in mind that when you sell you must pay a 5% or 6% commission and 3% in closing costs plus a capital gains tax if you don’t do a 1031 Exchange. Perhaps you have a certain dollar goal in mind such as selling when it goes up $50,000 in value, or when you have doubled your down payment.

The length of time you hold will vary with your plan. If it is specifically earmarked to pay for a child’s or grandchild’s college education, then the timing of the sale will be determined by the time the child enters college.

If the investment was made to create tax shelter, then it will have value as long as you are producing income. In this case it would be a long-term hold until such time as you retire or no longer need the shelter.

Real estate investing is sometimes suggested as a retirement strategy by financial planners. Let’s say you are 45 years old and have 20 years before you plan to retire. One strategy might be to buy a rental income property and on a 30 year fixed loan and pay it off in 20 years. This would give you a free and clear property at age 65. You could then choose to supplement your retirement income monthly with the cash flow, or sell and pay commissions for a lump sum amount.

The real beauty of real estate investing is that it gives you OPTIONS in life.

It can be an emergency fund to safeguard against unforeseen events. It can be a savings plan for a dream purchase. It can be used as a tax shelter and extra income. It can be used to retire early or more comfortably. It can be used to will to you heirs. Properly structured, real estate can add enormous stability to your lifestyle.

I have been taught that the only good reason to ever sell real estate is if the neighborhood starts to decline or that you see by moving your equity to another area it would be more beneficial financially. The “Buy and Hold” philosophy is a proven path to building true wealth in real estate. I have also learned that life occasionally throws you a curve ball that requires a cash infusion to cover unexpected expenses. There have been more than a couple of times in my life that I was glad I had some real estate equity to fall back on.

When the farmer plants his crop, he makes his plans to harvest. So should you have a plan when you buy. If the farmer has time, he plants an orchard and gets a harvest each year before selling his land and moving on. Do you have an orchard to fall back on?

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