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WEBINAR: Invest in Apartment Buildings – RSVP Here.
{ Sponsored webinar with Hector Padilla, President of HP Capital Investments, Inc. }
I’ve been hustling, day in and day out for almost 20 years in the Real Estate game.
Most of the time I was quiet about my success. You can say, that I’ve ‘made it’ because I have FINANCIAL and TIME Freedom.
I have a happy family life and I could choose to retire today if I wanted to. It’s not about that.
The hustle gives me a high.. Plus, I like surrounding myself with like-minded people.
I will be holding a FREE webinar on May 24 at 6:30 pm PST about systems I’ve used to create wealth, and I want you to join me.
TO SIGN UP FOR OUR FREE WEBINAR, click link above or CLICK HERE.
BREAKING BLOG: Dealing With “Balloon” Payments
Article by Bruce Kellogg
The allure of low entry payments can often lead risk-prone investors to take on financial burdens that they may be unable to sustain later.
It is crucial that investors of all levels fully understand the terms, conditions, and rates before signing financial obligations.
The following are some key points to keep in mind when considering a non-traditional mortgage.
“Amortizing” Versus “Balloon” Notes
An “amortizing” note is one where the principal amount is paid off over the term of the loan. A “balloon” note is one where the payments are not sufficient to retire the debt, and an outstanding balance is due at maturity.
What Is The Problem?
The problem arises when the borrower does not have the funds necessary to pay the “balloon” amount when it comes due. Oh, oh! So, here are some ways to deal with that!
Refinance the Property
The first recourse for an owner who wants to keep the property is to refinance either the property itself, or another property in the portfolio.
This is a good approach as long as financing conditions are favorable. If conditions are not favorable, other approaches will need to be considered.
Sell the Property
If the owner does not care to own the property any longer, they can sell it and have the sale pay off the loan. Or, they can sell another property to pay off the loan. If conditions are not favorable for selling, again, other approaches will need to be considered.
Renegotiate With the Lender
This is not an ideal approach because the borrower is negotiating from an inferior position. The lender “has the upper hand” because they can always foreclose.
So, the borrower should offer the lender a monetary “inducement” for an extension, either a fee, an increase in interest, or payment amount, or both. But, it gets the job done! (Unless the lender says, “No”!)
Protective Note Terms
The best way for a borrower to protect themselves from becoming in an uncomfortable position is to negotiate protective terms in the note in the first place. One might be called a “rollover clause” or an “extension”. Here, for example, the borrower gets a time extension, say two years, for a 2% interest rate increase. This must be written in the note as one of its terms.
Another approach is to convert the note into an amortizing one when the balloon payment is due. Again, these terms need to be negotiated when the note is written and included with the other terms. In some cases, lenders do not need a cash payoff and enjoy receiving reliable note payments from a proven borrower.
Bring In A Cash Partner
If the above approaches aren’t working, the borrower can bring in a cash partner. This basically involves selling a partial interest in the property for cash to pay off the “balloon”.
An escrow is recommended with title insurance, and an attorney should draw up an agreement between the parties, who might not be familiar with each-other.
Return the Property to the Lender
This is the least-desirable alternative in most cases. It involves giving up. If it’s going to be done, it needs to be done right, with an escrow, deed with a “Deed-in-Lieu-of-Foreclosure” recitation, title insurance, and transfer of any rents and deposits back to the lender.
The lender should cancel the note, and return the original to the borrower. The lender should also record a “Full Reconveyance” in the escrow to clear the title.
File Bankruptcy
This is an alternative, but a risky one. The day a bankruptcy is filed, a 30-day “Automatic Stay” of all collection actions is established.
After 30 days, the lender can file a “Relief from Stay” request to foreclose on the property.
There is a hearing, and in the case of homeowners the bankruptcy judge will urge the parties to work something out.
In the case of investors, the “sympathy factor” is usually low because investors are considered to have resources and several years to handle the “balloon”. The lender is due the money, the judge is likely to rule. (i.e., no relief!)
Conclusion
A “balloon” payment is one of those things that isn’t a problem, until it becomes a problem. It is best to deal with it up-front, in initial negotiations, when the note is originated.
During the term of the note, keep working to pay it off. If the due date comes and the payoff funds are not in-hand, find expert help. You’re going to need it!
Good luck…
Bruce Kellogg has been a Realtor® and investor for 36 years. He has transacted about 500 properties for clients, and about 300 properties for himself in 12 California counties. These include 1-4 units, 5+ apartments, offices, mixed-use buildings, land, lots, mobile homes, cabins, and churches. He is available for listing, selling, consulting, mentoring, and partnering. Reach him at [email protected], or (408) 489-0131.
REAL, RAW & RIVETING – Hector Padilla Shares Insight from His $86M in Deals at the ROCKSTAR Realty411 Expo in Los Angeles
To RSVP and secure complimentary tickets, while they last, CLICK HERE.
“I Don’t Know Where I’m Going from Here, But I Promise It Won’t be Boring.”
~ David Bowie
The RockStar Real Estate Investor Expo & Property Tour in Los Angeles Gives Investors A Chance to Learn from Respected Local Leaders Who Are Living the Rockstar Lifestyle Thanks to a Golden Real Estate Market
LEARN THE 411 YOU CANNOT GET ELSEWHERE – TIPS THAT ONLY ACTIVE ACCREDITED INVESTORS CAN SHARE
This Event is Our Gift To You – Enjoy Complimentary Admission, Breakfast, Appetizers, Magazines, Networking, Exclusive Access to Top Deal Makers, & More!
Event Preview Written by Realty411
Investing in California is not easy. Prices are steep, competition is stiff, but the reward historically has been strong and steady appreciation.
The California market is currently causing major economic shifts. The state recently moved up to number five in global economic power — It stood at number nine, twenty years ago.
Then it shifted to number six in 2000. The state’s strong sectors helped bolster its prominence: technology, entertainment, media, tourism, real estate, alternative energy. California enjoys a diversified economy in the state’s five major economic and geographic regions.
Recently, California became first state in nation to require solar panels for all new homes starting in 2020. Super fast-forward thinking residents, such as Elon Musk, are now drafting plans to allow us to zoom to Paris in a rocket in one hour and drive underground in tunnel at record speeds, while its bumper-to-bumper above ground in Los Angeles.
Every year millions of people from around the United States, and indeed internationally, choose to make California home, resulting in a housing shortage in many areas.
Landlords are enjoying premium rents. Developers are building again. Prices have been skyrocketing for years. Some coastal regions of California housing market have appreciated up to 40% in value, the past three years alone — normal appreciation has typically been 10% annually.
This equates to choice properties in prime areas doubling in price every ten years or so.
In other words, California real estate owners are swimming in equity, which can be tapped and wisely reinvested back into more real estate.
What does this all mean to California investors?
Although entry into the market may be more difficult and expensive than other regions, the path to prosperity is shortened by strong ROIs, which can produce life-changing windfalls.
Hector Padilla, a real estate broker, accredited investor and entrepreneur, is one Californian who has greatly benefited from the Golden State’s last 20-year-market cycles.
Beginning with his first purchase, a completely burned-down duplex in Los Angeles, which he purchased with credit cards and by breaking his childhood piggy bank… to his $75K Hollywood parking lot that he flipped one year later for $1.375M. Hector Padilla is the American Dream personified; he become a self-made millionaire by age 29, multi-millionaire by 30 and was able to retire at age 38. He created his wealth via real estate investing right here in Los Angeles!
The Los Angeles-based investor mentored the Publisher of Realty411‘s on numerous real estate investments over the course of their 18-year friendship. The pair met when Linda Pliagas, magazine publisher, was hired as his first assistant.
On Saturday, July 14th, 2018, at The Westin Hotel near LAX, (5400 W Century Blvd, Los Angeles, CA 90045), Hector Padilla will freely share his wisdom on the most valuable lessons he has learned from his $86M in local and national real estate acquisitions.
“You Can’t Change the Past So Don’t Let it Haunt You. You CAN Change the Future, But First You’ve Got to Want To.”
~ Pat Benatar
How did Hector transition from being a REALTOR® to Flipper to now owning multimillion-dollar properties like a $6M building in upscale Brentwood, plus a $9M building in LA?
What are some of the strategies that this native Angeleno used to create exponential growth, all while being a family man and now living The Ultimate Lifestyle?
Discover Golden Nuggets from one of the Golden State’s most successful real estate investors.
In addition to sharing proven techniques that he has learned from his Mentors, closed deals, and from his investment of over $250K in RE education. Hector will also reveal shortcuts that he has taken to expedite financial success so investors can savor “the good life” while they are still young enough to enjoy it.
To RSVP and secure complimentary tickets, while they last, CLICK HERE.
Highlights for this spectacular day designed for guests to learn how to SPEED UP WEALTH and Live the Ultimate Investor LIFESTYLE NOW, include: Complimentary coffee and breakfast, afternoon appetizers for VIP guests, a charity drive highlighting an important and timely issue, plus numerous raffles, networking sessions, and words of wisdom from some of the most well-known figures of the REI world.
The Rockstar Real Estate Investor Expo & Summit will unite both national and local leaders, and include multiple breakout sessions for guests to choose the topic they wish to learn most about. Some of the niches to be discussed are:
- Local and national real estate trends
- Fixing and flipping locally/nationally
- Land banking in CA and Out
- Tax liens in multiple states
- Multifamily investing alone or w/others
- Out of state investing – Best markets now
- Property management – Insider tips
- Leveraging with private funds
- Credit options for REI and Business
- Investing in notes / 1st and 2nd
- The latest in real estate technology
- Wholesale techniques
- Diversification – How to Have it
- Long-distance landlording
- PLUS… FOREX, ETFs, Options, and REITS!
- BROKERS: Get the Funds You Need for Business
- Private Funds are Here for New/Seasoned Investors
- And so much more.
“You’ve Got to Roll with The Punches to Get To What’s Real.”
~ Van Halen
Saturday, July 14th will begin promptly at 9 am at the Westin by LAX (5400 W Century Blvd, Los Angeles, CA), with registration starting at 8:30 am. Coffee and pastries will be served to all early-bird guests. Networking starts immediately and the welcoming message will begin at 9:30 am.
The theater at the Westin Hotel has been reserved for maximum viewing, engagement and learning. A lunch break will take place and appetizers will be served to VIP guests, speakers and sponsors.
Guests will also watch highlights of Property Pitch, a 30-minuute TV pilot, which was developed with assistance from the publisher and team of Realty411 and filmed in January in Santa Monica, California.
Some of the other powerful educators include: Charles Sells with The Pip Group, Reed Blake with Business Capital Experts, Jasmine Willois with Note Assistance Program, Raul Avila with the AV Fund Group, Chris Meza from Real Titan Acquisitions, Inc. Real Titan Acquisitions, Inc, fund manager Bruce E. Dinger, Justin Ford from Encore Real Estate, Michael Lally (Passive Income REI Expert), Master flipper Jason Kennedy, investors and REI club leaders, such as Scott Mednick and David Church, and so many more!
For complimentary tickets to this amazing day, plus VIP tickets, Please Click Here.
Rounding out an amazing weekend will be more amazing content on Sunday, July 15th, including a VIP Insider Bus Tour presented by Hector Padilla. The tour will end with a VIP Exclusive Networking Party at Hector’s Multimillion-Dollar Residence in the Celebrity Streets of the Hollywood Hills. His backyard neighbor paid $75M for his home, and the home in front of property will soon be listed on the market in the range of $50M.
Hector who is also a GRI and Broker has been investing in the local area since the start of his real estate investing career, at age 25. Now, Hector and his wife and business partner, Patty, have invested globally and currently own a vacation rental in Cabo San Lucas, Mexico. He will give incredible golden nuggets, techniques that are only acquired from decades of hand-on and direct experience.
Tickets for this all-day educational tour are $1,397 and will go on sale soon. Realty411 guarantees the level of content and insight will far exceed this price of admission.
This wonderful tour will unite both investors from out of state, as well as locals, ranging from beginners to sophisticated landlords. Many potential and long-term Southern California investors have already per-registered to attend both events.
Fantastic networking will take place all weekend in Los Angeles on July 14th so be sure to RSVP for this awesome event, plus bring all your friends, colleagues and family members along. Plus don’t forget about the property tour the next day, on Sunday, July 15th.
“Life sucks, but in a beautiful kind of way.”
~ Axl Rose of Guns ‘N’ Roses
Realty411 magazine was originally developed in Los Angeles in 2007 as a way to give back knowledge, resources and spotlight national renowned real estate investors. The publisher, Linda Pliagas, modeled the issue after one of her favorite magazines, A.D. Kessler’s Creative Real Estate Investor, which was also based in California and published in the 1980s and 1990s.
A homeowner since the age of 25, Pliagas first studied real estate in Santa Monica College, where she also took journalism courses and continued on to California State University, Long Beach. Pliagas has a bachelor’s degree in journalism; she’s enjoyed a media career spanning more than 20 years. Her first magazine was published in 1993 and sold at bookstores in 13 states.
She has been actively investing in California and out of state since 2005, in multifamily and single-family properties. Linda’s motivation is to increase knowledge of real estate investing to as many people as possible.
One of the biggest impacts to Linda’s life was her parents losing the family home as a teenager. Witnessing the agony on her father’s face as a youngster is a memory that continues to fuel her passion for publishing — to reach mass audiences with inspirational and proven wealth-building strategies.
Realty411 has been hosting events since the start of the publication, starting at public libraries and inside civic buildings, and has reached thousands of personal investors around the country. Pliagas, who seldom traveled prior to Realty411, has seen the national landscape and has met investors from every major region of America.
Realty411 frequently also highlights and raises donations for numerous charities, and has worked with renowned organizations, such as: the Los Angeles Mission, The Salvation Army, PTSD USA Camp Hope – The PTSD Foundaton of America, Orange County Transitional Women’s Center, San Diego Mission, Santa Barbara Mission, and many more.
To RSVP and secure complimentary tickets, while they last, CLICK HERE.
WATCH HECTOR NOW – REAL, RAW AND RIVETING….
Ryan Stewman, a.k.a – The Hardcore Closer to Lead the Lone Star Expo on Sept. 15th in Arlington, TX
For complimentary tickets to this amazing day, plus VIP tickets, Please Click Here.
“Everything is a negotiation. Everything is a little bit of give and take.”
~Lamman Rucker
Successful people learn to negotiate early on. They realize young that the art of negotiation influences outcomes and results. Whether it’s dealing a multimillion dollar acquisition or influencing a partner to invest in a certain market, real estate entrepreneurs can never go wrong brushing up on time-tested sales systems, and strategies designed to sway.
Realty411, the longest-running complimentary magazine for investors of real estate, has a large social media following on numerous platforms. In the age where individuals are influencers through social media, communication skills can make a valuable impact in lives of their readers and followers.
For this reason, Realty411‘s Lone Star Real Estate Investors’ Summit will feature the “Hardcore Closer” himself, Ryan Stewman. The popular four-time best-selling author, sales authority, and proud Texan, will lead the day in Arlington, Texas on Saturday, September 15th, 2018.
Besides his popular writings, Stewman, a Plano, TX resident, is known for his captivating podcasts, engaging Facebook live videos, life-changing bootcamps, and his real-and-raw Prison-to-Penthouse testimony.
His message for the third annual Lone Star Real Estate Investors’ Summit will be one of motivation and education. Ryan will lead the momentum of the day and share some of his top Secret $trategies for skyrocketing in sales quickly. This day is designed to help increase one’s income, influence and insight.
Some of the other highlights for this spectacular day that will help guests not only Level Up, but also Give Back, include: Complimentary coffee and breakfast, afternoon appetizers for VIP guests, a charity drive highlighting an important and timely issue, plus numerous raffles, networking sessions, and words of wisdom from some of the most well-known figures of the REI world.
The Lone Star Real Estate Investors‘ Summit will unite both national and local leaders, and include multiple breakout sessions for guests to choose the topic they wish to learn most about. Some of the niches to be discussed are:
- Local and national real estate trends
- Fixing and flipping
- Land banking
- Tax liens
- Multifamily investing
- Building tax-free investments with an IRA
- Property management
- Investing in assisted residential living facilities
- The latest in real estate technology
- Wholesale techniques
- Private Money
- Business Lines of Credit
- Diversification
- Long-distance landlording,
- And so much more!
Continuing with its tradition of spotlighting local leaders, the Texas’ Lone Star REI Summit will distribute a special edition of Private Money411, a Realty411 financial supplement featuring local leader Rob Barney, President of DHLC Investments, Inc. and owner of DHLC Mortgage, LLC. In addition, the latest copy of Realty411 magazine will also be passed out and celebrated.
The Hardcore Clorser (Ryan Stewman) will be accompanied by other amazing educators and REI influencers, including: Jimmy Reed (1REclub.or), Arnie Abramson (Texas Tax Sales), Pam Blanco (Professional Asset Management and Sales), Juan Carlos Cruz (Real Estate IQ), Gene Guarino (RAL – Residential Assisted Living Aademy), Steve Rozenberg (Empire Industries), Kaaren Hall (uDirect IRA Services), Tim Herriage (2020 REI), Reed Blake (“Mr. Money” from Business Capital Experts), Justin Ford (Team Take Profits/IML), and many more.
The day will begin promptly at 9 am, with registration starting at 8:30 am. Coffee and pastries will be served to all early-bird guests. Networking will take place and the welcoming message will begin at 9:30 am. Multiple breakout sessions will be in full effect with networking breaks in between. A lunch break will take place, and appetizers will be served to VIP guests, speakers and sponsors. For complimentary tickets to this amazing day, plus VIP tickets, Please Click Here.
Rounding out an amazing weekend will be an Insider Investor Bus Tour presented by 25-year REI leader Jimmy Reed. Reed, who resides in Fort Worth and is founder and CEO of 1REClub.com, has been investing in the local area since his start in the real estate realm. Reed and his wife and business partner, Rachell, have invested globally and at one point even owned their own private island in Central America!
Jimmy will give incredible golden nuggets, techniques that are only acquired from decades of hand-on and direct experience. Tickets for this all-day educational tour will go on sale soon. Tickets to the tour will be surprisingly affordable and without a doubt, the level of content and insight will far exceed this price of admission.
This wonderful tour will unite both investors from out of state, as well as locals, ranging from beginners to sophisticated landlords. Many potential and long-term California investors have already pre-registered to attend both events.
Fantastic networking will take place all weekend in Arlington, Texas, so be sure to RSVP for this awesome event, plus bring all your friends, colleagues and family members along.
The Lone Star Real Estate Investor’s Summit was originally developed in 2015 in Texas as a way to give back knowledge, resources and spotlight local charitable organizations. Thus far, the Lone Star Real Estate Investors’ Expo has donated thousands of dollars two important charities: The Salvation Army and PTSD USA Camp Hope – The PTSD Foundaton of America.
The tradition of organizing the annual event is carried on by Realty411 magazine. The publisher and her extended family currently own rental property investments in Texas and have for over a decade. Additionally while the publisher was an active agent, prior to Realty411, she referred as much as $6M in sales in one year to the Lone Star State.
The Lone Star Real Estate Investor’s Summit will take place at:
SHERATON ARLINGTON HOTEL
1500 CONVENTION CENTER DRIVE
ARLINGTON, TX 76011
on Saturday, September 15, 2018
TO RSVP, PLEASE CLICK HERE!
LISTEN TO THE HARDCORE CLOSER NOW, RSVP TO THE EVENT AND BUCKLE UP FOR AN AMAZING DAY!
SEE YOU SOON, CLOSERS…
Funding for DOWN PAYMENT On Your Flips
– Please Review this Important Email from Our Sponsor –
First, you locate a discounted property that you can profit on.
Next, you go to the banks for funding but they won’t pay.
You then find a private lender who will partner with you on the deal.
BUT, you don’t have the cash on hand to go forward with the deal…
At Connected Investors, we recognize sometimes the only thing stopping our members from doing a deal is just a few thousand dollars on a deal that can make you ten’s of thousands.
We found your solution…
As the real estate market reaches the maximum of what many analysts are describing as a “super cycle,” cash is making its way into the real estate market through almost every avenue imaginable.
NOW private lenders are stepping up and helping investors with an array of costs…
+Down payment
+Repair costs
+Education
+Transportation
We have strategically partnered with some of the top lenders in the country to offer our members alternative down payment options and access to more cash to run their business.
This funding portal launches this weekend and it literally opens a brand new door for investors to get any type of real estate deal funded.
Apply today and get your share! -The Connected Investors Team
