3 Reasons Every RECFH Real Estate Entrepreneur Should Create A Home Buyer Partner Pool

There are 4 Member Types operating within the Real Estate Cash Flow Hunters Eco-System;

1. Real Estate Entrepreneurs
   
2. Mortgage-Ready Landlords
3. Joint Venture Partners &
4. Home Buyer Partners (aka Tenants)

One of the most distinguishing factors of the RECFH Eco-System is the fact that tenants make money as well. It's always a jaw-dropper every time we mention that during a RECFH Orientation.

But take a moment to think about that.

Doesn't it sound logical, considering the typical adversarial relationship between tenants and landlords? Who hasn't heard the horror stories about tenants destroying property or skipping out on rent and landlords neglecting repairs?

What if we were to allow the tenant to make money on the deal like everyone else?

WITHOUT affecting the profit margin.

Duh! Why hasn't anyone else thought of this concept? Let's be clear, we're not talking about Rent-To-Own, which is admittedly a step in the right direction.

We're talking about RENT-TO-PROFIT!

Rent-To-Own keeps the tenant viewing things from the emotional perspective of the retail market while RENT-TO-PROFIT moves the tenant to view things from the wealth-building perspective of the investor market. However, it's important to note that the tenant still achieves homeownership, but more effectively.

As a RECFH Member, Home Buyer Partners can accurately set their closing date [usually within 2 to 12 months - assuming they can afford rent in their local real estate market] even if they have damaged credit, little to no savings, and/or high consumer debt! In large part, this is made possible by YOU, the RECFH Real Estate Entrepreneur.

That's right! You now have the unique privilege and opportunity to create homeowners and financially free real estate investors in one fail swoop! All you need to do is invite those you deem to share our core values to a RECFH Orientation (let the system do the rest)!

Don't forget - we can invite candidates anywhere in the United States!

Only 3 Out of 10 HBP Candidates Will Be A Good Fit: 

Our greatest challenge in working with RECFH Home Buyer Partners is their tendency to be emotionally driven which is why, for their sake and ours, we have to stick to the principles!

You see, we're not in the homeownership business! We are Real Estate Investors and most of us happen to be homeowners - by choice!

What the RECFH Home Buyer Partner has to understand is that we are depending on them to look past homeownership to the next property and so on...

This is the only way we can even hope to create and maintain a self-sustaining environment. If they follow the blueprint we give them, homeownership is automatic. Unfortunately, 7 out of 10 aspiring homeowners can't see past homeownership and aren't interested (unconsciously) in anything more than getting into a home. For them, material things have become the primary priority in their lives. We have to have the courage and the strength to withhold invitations from this group. They simply are not ready - yet!

Making A Difference:

Just think of the difference you can make in a family's life by giving them the opportunity to know their closing date, 2 to 12 months in advance even with damaged credit, little to no savings, and/or high debt.

How can we accurately predict a closing date?

If the candidate can afford rent in their local real estate market, we as Credit Optimization Experts can usually provide them with a blueprint to close on their first/next home within 12 months. Yes, there will be situations where underwriting guidelines dictate a longer period (i.e. foreclosure requires 3 years, bankruptcy requires 2 years, extraordinary debt loads, etc.) but in those situations, we can also get creative (i.e. owner financing, etc.).

Special Note: Don't Forget  - One of Our Secret Weapons is Building Business Credit to Optimize Personal Credit!

The Bottom Line:

RECFH Home Buyer Partners, in terms of how quickly they will move into their first/next home and ultimately purchase, will fall into 4 categories;

1. They can joint venture with RECFH MRL, JV Partner, and/or Real Estate Entrepreneur on an inventory property
2. Work with a RECFH Real Estate Agent (Power Team Member) to find a lease-purchase property.
3. Find a potential deal on their own (using investment criteria that you provide) and submit the lead to you to engage the seller and negotiate win-win terms
4. Execute their blueprint action steps and wait to purchase a property on their pre-determined closing date.

Either way, you will have helped them take the first step (homeownership) toward achieving INFINITY - utilizing real estate as the vehicle and that is something to be extremely proud of!

3 Reasons Every RECFH Real Estate Entrepreneur Should Have A Home Buyer Partner Pool:

1. Leverage: A major benefit of having a Home Buyer Partner Pool is your ability to leverage it toward building your Inner Circle. What Landlord or JV Partner wouldn't appreciate the fact that you already have a pool of buyers ready to purchase any property you buy - before you actually buy it! 
2. Recurring Income: The most important benefit of having a Home Buyer Partner is, of course, the fact there is a massive market and they could be the driving force behind your recurring income stream.
3. Reverse Wholesaling: The home Buyer Partner is arguably the cornerstone of the entire RECFH Membership Organization because they give us a massive opportunity to Reverse Wholesale. Let's not forget the potential of having hundreds of HBPs out there looking for deals - just for you - this could be a true game-changer!

Good Hunting!

Wake Up And Smell The Coffee; Real Estate vs. Feel Estate

It's interesting how different marketing is from operations. When I was coming up with the title for this article, the first thing that came to mind was - I don't even like coffee. In fact, I was taught coffee was for heathens and tea was for civilized folk. But even if you're a heathen, I need you to understand this very important topic involving marketing and real estate.

For a long time, I was baffled with the fact that practically every new AND experienced real estate investor that we introduced to the RECFH Eco-System would be paralyzed to the concept of "Reverse Wholesaling."

What is Reverse Wholesaling [The RECFH Way]?

Reverse Wholesaling, the RECFH way, is selling real estate at a higher price first, and then (afterward) buying the property at a lower price. This process allows us to spread and extract as much risk as possible from the transaction - making it safer for all parties involved!

Back to the reason, I was baffled;

For the life of me, I couldn't figure out why no one could wrap their minds around this concept. They were all hooked on finding the deal first and then trying to find the buyer - which is obviously wayyyy riskier - for two reasons;

1. Each day you hold the property costs money
2. You may not find a buyer and get stuck with the property and have to take a huge loss (if you can afford it) or lose the property to the lender

You see, I could somewhat understand why the experienced investors had a problem - it's the opposite of what they're already used to doing. 

But what I couldn't understand was why the newbies were having such a problem with it. They have little to no experience at all. 

Then it hit me!

Real Estate vs. Feel Estate

The newbies' only exposure to real estate was the retail market. The retail real estate industry has done a superb job at marketing to the retail market. It's not uncommon for industries with big-ticket items to allow buyers to view products first and then go back and try to figure out if they can even afford to pay for it. In fact, they actually get involved to the extent of helping the buyer get qualified.

Retail Home Buyers are largely driven by emotions. The home is usually the biggest expression of who they are so, more times than not, they need to feel good about the property itself. That is why we call this type of purchase "Feel Estate."

In case you haven't figured it out yet. Emotions have no place in real estate investing! We purchase property to earn a profit, which is why we call this type of  purchase "Real Estate."

There is no way we could successfully approach sellers in the investment market and then come back later when we find out if we can afford to make the purchase. In fact, sellers (deals) don't even reveal themselves until they feel certain that you can purchase - and fast.

Can you imagine paying for advertising that says,

"Sell Me Your Home At A Price Much Lower Than You Want AND THEN I Might Get Back With You Later To Let You Know If I Can Afford It." I BUY HOUSES - CALL TODAY!

I hope you can see how ridiculous that is.

HOW WE DO IT:

As a RECFH Real Estate Entrepreneur, you have the opportunity and privilege to compete with the big boys & gals - only if you operate the system properly!

Reverse Wholesale by getting your buyers (Mortgage-Ready Landlords / JV Partners - Inner Circle) in cue first. Then operate from a cash perspective and make deals to purchase properties faster & safer than all of your competitors.

You get to pick and choose who you want to work with because no one can offer what you can. So ask yourself this question;

How many millionaires am I going to create over the next 5 to ten years?


Good Hunting!

The FlipSafe Program; A Risk Management Tool You Should Be Using!

This property is included in the FlipSafe Program.

It's a rare privilege to have opportunities to crush the risk like RECFH Real Estate Entrepreneurs can! We especially like to use the FlipSafe strategy in markets that are not in what we call "high-profit rental markets."

What is a "High-Profit Rental Market?"

We define a high-profit rental market as a local real estate market that is experiencing stable or rising appreciation rates. In fact, for the most part, we only buy and hold properties in High-Profit Rental Markets. We buy and flip properties in local real estate markets currently experiencing decreasing appreciation, etc (non-high-profit rental markets).  Which brings us to our next question;

What is the FlipSafe Program?

The FlipSafe Program is an exit strategy we use when properties we are flipping don't sell within the time frame planned by the Real Estate Entrepreneur.

For this reason, we like to buy and flip properties that can be rented with positive or neutral cash flow, if necessary.

Here's how it works;

Step One:

The Real Estate Entrepreneur structures a buy and flip real estate cash flow project. The Real Estate Entrepreneur makes sure to keep a RECFH Mortgage-Ready Landlord in cue to purchase/refinance the property in case it does not sell within the time frame projected [i.e 120 days].

Step Two:

The property is rehabbed/built and placed on the market to be sold to a retail home buyer.

Step Three: (Only If Necessary]

If the property does not sell in the designated time period. The RECFH Mortgage-Ready Landlord will come in to purchase/refinance the property with conventional financing, thereby extracting the capital utilized which is now freed up to redeploy into the next cash flow project.

As always, the project is structured with optimal risk and profit potential for ALL parties involved. This is one of the many major benefits of being a member of the Real Estate Cash Flow Hunters.


Safe Hunting!

VELOCITY BANKING: Arguably The Most Explosive Strategy Being Utilized Within The Real Estate Cash Flow Hunter Eco-System

As a RECFH Real Estate Entrepreneur, it's up to you to introduce, instruct and
guide the members of your Inner Circle in the utilization of velocity banking to create wealth!

How Do We Define Velocity Banking?

We define velocity banking as the process of utilizing
good debt  to terminate bad debt and create wealth

The Only 5 Strategies You Really Need To Know To BE A Credit Optimization Expert

I find the answers very fascinating when I ask people whether they consider themselves to be credit optimization experts.

The people I expect to say yes (i.e. real estate professionals/investors, mortgage professionals, etc) usually say no and the people I expect to say no (credit repair specialists, credit counselors, etc) typically say yes.

About a third of them catch on to that special word in the question, "Optimization," and ask for more information.

You see - there is a big difference between credit repair which focuses on the derogatory items on your credit report and credit optimization which focuses on optimizing your entire credit profile.

Credit optimization is more about positioning yourself or others to access capital/leverage and ultimately creating cash flow/building wealth.

As a Real Estate Entrepreneur, your Collaboration Team will be depending on you to instruct them on how to access capital/leverage quickly, effectively, and consistently!


5 Strategies You Need To Know

1. Payment History (35%):  Needless to say, paying your bills on time is the most important component of your credit profile. This is where credit repair usually starts and ends.

Strategy: Engage a credit repair specialist to help remove derogatory items from the credit report. The objective is to use the law to your advantage; if it's erroneous or can't be proved, it must be removed! Remove as many derogatory items as possible, then settle any remaining debts (25 - 50% / dollar) in exchange for deletion only.

Tip: Use your business credit (or a Collaboration Team Member, that trusts you, business credit) to settle debts on your personal credit report(s).

It's important to note that it's less about getting out of paying your debts and more about reestablishing yourself so that you can pay or settle the debts. Not being able to do so serves no one - including the creditor.

You may also choose to add tradelines to increase the weight of your credit profile - speak to your RECFH Mentor to learn more.

2. Credit Utilization (30%): The percentage of your individual accounts and/or overall available credit being utilized at any given time.

Example:

You have three accounts with credit limits of $2,500, $5,000, and $2,500 and balances of $1,250, $3,000, and $2,500 respectively.

Your overall utilization is 68% [$6,750 / $10,000]. However, your individual accounts utilization rates are  50% [$1,250 / $2,500], 66% [$3,000 / $5,000], and 100% [$2,500 / $2,500] respectively.

Strategy: It is important to manage both your individual account utilization rates AND your overall utilization rate. It's recommended that you keep your utilization rates below 10% - especially before applying for capital accounts.

Tip: Transfer excess debt to your business capital account(s) (or a Collaboration Team Member that trusts you) that don't report to your personal credit report(s), if necessary, before applying for new capital accounts.

You may also choose to add revolving tradelines to decrease your overall utilization rate (some credit scoring algorithms may compensate for this strategy) - speak to your RECFH Mentor to learn more.

3. Length of Credit History (15%): The longest tradeline history and the average overall tradeline history are the things that matter most in this category.

Ideally, you want a minimum of one tradeline with at least 10 years of history and an average overall tradeline history of 5 years or more

Strategy: Add revolving tradelines to increase the age of your credit profile. Speak to your RECFH Mentor to learn more.

4. Credit Mix (10%): Types of credit. It is ideal to have at least one installment account and 4 or more revolving accounts. The higher the credit limit on each revolving account the better.

Strategy: Add revolving tradelines, if necessary, to meet or exceed the ideal number accounts. Speak to your RECFH Mentor to learn more.

5. Pursuit of New Credit/Inquiries (10%):  2 or fewer inquiries per 6-month interval is ideal.

Strategy: Go the extra mile to make every inquiry count. ALWAYS find out the qualifying criteria before applying for a capital account. Consult with your RECFH Mentor!

Remember - it's your job, as a RECFH Real Estate Entrepreneur, to help the Collaboration Team Members achieve the RECFH Individual Member Goal: Optimize your personal AND business credit profiles to gain access to $25,000 - $150,000 in new capital accounts each year, exclusively for the acquisition of income-producing assets.

Good Hunting!

Why Avoiding This ONE MISTAKE Could Be The Key To Your Success As A Real Estate Entrepreneur

Let's start with our prime directive as a RECFH Real Estate Entrepreneurs.

"To Create An 8-figure Real Estate Portfolio With NO Cash, NO Credit and NOT Ever Having to Qualify for a Mortgage."

This happens to be both the privilege and the advantage that attracted me to this career in the first place. Because I can remember the times like it was yesterday, I ran across properties that I knew were good deals but I didn't even have the small amount of money it took to put them under contract.

And many times when I did finally find the money it was too late.

I can also remember the time when I got financing to purchase and rehab a property but no one told me that I had to come up with $16,000 upfront to complete the first phase of repairs - after which the lender would reimburse me.  Guess what?

You guessed right. I didn't have the money! There's nothing like a little desperation to drive home a life lesson. These, among others, are mistakes that could have been avoided with one move on the chessboard. And by the way, I was able to get my hands on the $16,000 but I'm ashamed to say how much it ended up costing me.

The problem for most of us is that we get so caught up in playing real estate checkers (the short game) - that we forget or worse, it doesn't even occur to us that we have to play real estate chess (the long game) as well. The ONE MISTAKE you want to avoid that could be the key to your success as a Real Estate Entrepreneur is choosing NOT BUILDING BUSINESS CREDIT!

Some Interesting Facts You Should Know...

1. You can have damaged or no personal credit at all and still build business credit.

2. You can build business credit completely separate from your personal social security number.

3. You can build business credit with absolutely NO Personal Guarantee.

4. You can build business credit even if your business entity is brand new.

5. You should be using business entities in real estate for asset protection, estate planning, and tax planning purposes.

Things like earnest money and 1st phase rehab/construction costs are reimbursable, meaning they can be recaptured during or before the project even begins. Therefore, if at all possible, you should avoid the costlier forms of leveraging capital to cover them. And there is no way that these "soft costs" should stop you from getting your projects started and completed.

By definition, a Real Estate Entrepreneur is an individual skilled at procuring, organizing and structuring resources into cash flow projects with optimal risk and profit potential for ALL parties involved. In case you didn't realize it, "that includes YOU!'

Building business credit not only helps you position yourself to handle soft costs, but it will also serve to help expedite your transition to more and bigger projects. But most importantly, you will need to guide the members of your collaboration team on building their own business credit and the most effective means of equipping yourself to accomplish this task is executing and experiencing the process yourself!

IMPORTANT NOTE: The more capital your collaboration team has access to - the more capital YOU have access to for cash flow projects!

Plainly put, there is no excuse for you, as a Real Estate Entrepreneur, not to choose to BUILD BUSINESS CREDIT!

Good Hunting!

Step by Step Guide to Crunching the Numbers for RECFH Real Estate Entrepreneurs

I realize that everyone wants to cut straight to the chase and learn how to analyze deals because some people falsely believe that's what makes the money start rolling in. It appears to be fun for some to play with the numbers and the fancy spreadsheets.

Yes, analyzing deals is important but it's certainly not what drives the money machine!

First of all, analyzing deals can be delegated and if a task can be delegated it is usually not the most important cog in the wheel - especially for the entrepreneur.

Everyone and I mean everyone depends on the entrepreneur to show up with the most important of the 3 essential components of a profitable cash flow project;  EXPERTISE (leadership, vision, team, experience, knowledge & application skills).

Hands down, the most significant skill of a real estate entrepreneur (any entrepreneur for that matter) is RAISING CAPITAL. Fortunately for us, the RECFH membership organization, in and of itself, is essentially an innovative method of raising capital.

With that said, let's get on with our conversation about deal analysis:

You'll soon find that once the word gets out about what you do, there will be many people bringing you potential deals to look at. Nevertheless, you must continually spread the word about what type of deals you're looking for and be on the lookout for potential Inner Circle members to invite as well.

NOTE: It's always a balancing act for the RECFH Real Estate Entrepreneur between having too many cash flow projects and having too much capital (both are good problems to have but challenging nonetheless).

FOUR STEPS TO CRUNCHING THE NUMBERS

A fellow RECFH Member recently brought me a lead on a residential lot that he believed was a good deal for a new construction project. We had just completed a rehab project in that particular neighborhood so it didn't take me long to confirm his conclusion:

When looking at the raw numbers, the profit formula is relatively simple:

Spread - Expenses - Participant Payouts = Profit

NOTE: Don't fret - we have a spreadsheet to calculate spread, expenses, and profits (you determine the participant payouts) but if it helps to understand the method behind the madness.

STEP ONE: Calculate The Spread

The spread is the difference between the purchase price and the after repair value (ARV). First and foremost, it's up to YOU, as the Real Estate Entrepreneur, to verify or confirm exactly what the spread is on each and every project.

In this case, there were actually two spreads; the lot spread, and the building structure spread.

The lot price had already been negotiated to $25,000 whereas the market value was $40,000 -
a spread of $15,000 [$40,000 - $25,000].

The building cost for a 2,200 s.f. house will be $187,000 [$85s.f. x $2,200 s. f.] with a market value of $275,000 ($125/s. f. x 2,200 s.f.) -
a spread of $48,000 [$275,000 - $187,000 - $40,000]

STEP TWO: Calculate the Expenses

The expenses include the purchase and resale closing costs plus carrying costs (Interest, Taxes, Util. etc.). It's important not to overlook any expenses. Especially when you have multiple closings taking place in your project.

Lot & Construction Closing Costs - $7,500

Carrying Costs - $9,500

Total  - $227,000 [Construction Cost + Lot Cost]

Down Payment - $45,400 (20% of $227k)
Loan Amount - $181,600 Estimated timeline - 6 months

STEP THREE: Calculate Your Participant Payouts

JV Partner(s) provide $60,000 to cover Down Payment & Carry/Closing Costs/Misc. JV Partner(s) - Profit $7,500  ANNUALIZED ROI: 25%

STEP FOUR: The Result is Your PROFIT!

$275,000 - Sales Price
- $9,500 - Carrying costs
- $181,600 - loan balance
- $5,000 - Closing Costs
- $60,000 - JV Partner(s) return OF principal
- $7,500 - JV Partners return ON investment

$11,400 - Profit from Sale of Property
+
$15,000 from wholesale of lot

$26,400 Total Profit for YOU the Real Estate Entrepreneur


Good Hunting!

Is It Really All About the Numbers? How RECFH Real Estate Entrepreneurs Approach Deal Analysis!

I can't tell you how many times people have asked me if I would participate or help with a great real estate deal they know of or heard about.

The quick and easy answer is usually always - I'll take a look at anything if the numbers work!

This statement is most definitely true but there is a lot to consider when ascertaining what actually makes the numbers work.

When we approach a potential cash flow project we must ask ourselves four questions;

1). Is this deal appropriate for the current market conditions (phase of the business cycle)?

If it's not, we must adjust the numbers accordingly - to offset the added risk.

2). What is the spread?

The spread is the difference between the asking price and after repair value (ARV). Most times the person bringing the deal to the table either doesn't know the spread or their calculations are off the mark. We ALWAYS verify or run our own numbers!

3). Who are the member types that will benefit the most from participating in this particular cash flow project?

We have the unique advantage of having access to all the resources we need within the RECFH membership base. In cases, where we don't have one or more of the ideal member types within our membership base, it's our job to go about the business of inviting such members to our Inner Circle. 

4). How can we structure this project with optimal risk and profit potential for all partied involved?

Now, this is where the rubber meets the road.

The RECFH Collaborators depend on the RECFH Real Estate Entrepreneurs to provide and structure cash flow projects with optimal risk & maximized profit potential.

Needless to say, our efforts to improve our skills in this area are never-ending! We are, in large part, deal architects and financial engineers.

So don't ever forget the true value that you, as a Real Estate Entrepreneur, bring to the table!

Good Hunting!

RECFH Members Success Depends On YOU: The Real Estate Entrepreneur

First off, let's define what a Real Estate Entrepreneur is:

A Real Estate Entrepreneur is an individual that is skilled in gathering, organizing and structuring resources into cash flow projects with optimal risk and profit potential for ALL parties involved.

As RECFH Real Estate Entrepreneurs, our prime directives are as follows;

1. Continually build our Inner Circles (RECFH Membership Base)
2. Create & structure cash flow projects for our Inner Circle Members
3. Strive to fulfill the RECFH Prime Directive
4. Continue to improve our skillset

Optimal Risk:

We achieve optimal risk in three ways;

1. Spreading the risk among collaborators to avoid one individual having to personally take on
all the risk
2. Reverse Wholesaling (Sell High First, then Buy Lower) whenever reasonably possible
3. Choosing the appropriate cash flow project relative to the current market conditions

Risk is derived from uncertainty. Uncertainty is associated with the unknown. The unknown leads to ignorance on our part.

For our purposes, there are 3 Types of Ignorance (The Risk)

1. Healthy Ignorance: when you're aware of what you don't know
2. Unhealthy Ignorance: when you're unaware of what you don't know
3. Destructive Ignorance: when you think you already know what you actually don't know

RECFH helps its members by providing access to continuous education about the relevant things that members are aware they don't know, experts to cover the things they're unaware they don't know, and constant reminders to never fool themselves into thinking that they or anyone else knows it all.

As Real Estate Entrepreneurs, we must insist that ALL members remain accountable by monitoring project performance metrics, keeping their eyes, ears, and minds open to learning more about everything relevant to their objectives.

Remember, to keep things in perspective, each member has their own individual Daily INFINITY Income Target and it's our job to help them achieve it - safer and faster than all other alternatives!

Good Hunting!

What Should I Be Doing to Get Started with My First Cash Flow Project? READY, SET, GO...

Should I start looking for deals?

Should I get my real estate license?

Should I buy more real estate courses?

These are just some of the questions that pop into our heads as we embark on this new journey as a RECFH Real Estate Entrepreneur. It's perfectly normal to ask ourselves these questions except for the fact that there is nothing normal about what we do.


What you need to understand is that we, as real estate entrepreneurs, are the driving force of a Real Estate ECO-SYSTEM!

We utilize a methodology that we like to refer to as "Real Estate Collaboration."

You see, most real estate investors are burdened with the obligation of finding and purchasing a property at a lower price first and then trying to sell that property at a higher price in hopes of earning a profit.

Not us.

As RECFH members, we have the unique ability to Reverse Wholesale [Sell Higher First, then Buy Lower]. 

Consequently, the first question you must ask yourself is, "Who in my Inner Circle is going to participate in the next cash flow project I'm going to structure?"

We pride ourselves on having every resource we need (all Inner Circle and power team members are resources) to consummate a cash flow project within our membership base. And if we don't have it - it's our job, as real estate entrepreneurs, to go outside the eco-system and bring it inside the eco-system for consistent access. This means that, just like other businesses, we need customers so our first priority is to start building our Inner Circle.

Keep in mind that we are privileged to be in a position to create an 8-figure real estate portfolio with NO Cash, NO Credit, and NOT Ever Having to Qualify for a Mortgage.

"The best way to become a Ten-Millionaire is to create 10 One Millionaires!"

So let's go invite potential Mortgage-Ready Landlords and/or JV Partners to attend a RECFH Orientation. Then you can sit back, earn, and learn as you Co-Entrepreneur on your first cash flow project.

Let's be clear! All you need to focus on, as a new RECFH Real Estate Entrepreneur, is building your Inner Circle - starting with nominating your first candidate to schedule and attend the RECFH Orientation (let the system do the rest)!

READY, SET, GO!

Good Hunting!