Jenn's Journals

2007-01-15T20:54:00.000-08:00

Short Sales...Picking up a property "on sale"

What is a short sale?

A short sale is typically defined as a sale in which a lender allows the property that secures a mortgage or deed of trust to be sold for less than the existing loan balance, due to factors such as the borrowers financial circumstances or local real estate conditions/inventory.

In a short sale, the mortgagee agrees to accept less than the loan amount to avoid foreclosure and is typically the lender's last resort. In essence, a new buyer is purchasing the property at a discounted purchase price. Some of the factors that may lead a lender to agree to a short sale are as follows:

1) the borrower's overall financial condition

2) the property being in poor condition and needing much repair

3) the cost of securing and maintaining the property which it is being marketed for resale

4) the cost of marketing and selling the property

5) the property was purchased or refinanced at the top of a seller's market at an over-inflated price, and a major drop in value has occurred

6) the property was financed as an interest-only adjustable rate loan and the borrower has no capacity to refi at a lower rate

Along with the above factors, there are many others that may influence a short sale from a lender.

If you think that this market is of interest to you, do not begin by calling all of the REO departments of your local banks. Typically banks work with one or two realtors to handle their short sales. Therefore, do your research and hunt out a seasoned realtor with the connections to acquire the short sales. The last thing a bank officer wants to do is have 10 investors a day calling for short sale properties. Plus, it makes you look like a "newbie" investor.

As the real estate markets continue to soften, this may be an interesting investment play in years to come. Be sure to do your research and if you need more information or a credible source for research, feel free to email me.

Jenn's Jewel: "He that does not ask will never get a bargain" French Proverb

2007-01-07T14:39:00.000-08:00

Words of Wisdom:

The most destructive habit........................................Worry

The greatest joy............................................................Giving

The greatest loss...........................................................Self-respect

The most satisfying work..............................................Helping Others

The ugliest personality trait...................................................Selfishness

The greatest challenge to overcome.............................Fear

The most effective sleeping pill.............................................Peace of Mind

The most powerful force in life......................................Love

The worst thing to be without........................................Hope

The deadliest weapon...................................................................The tongue

The two most power-filled words..................................."I can"

The greatest asset.............................................................Faith

The most beautiful attire...............................................................A Smile

The most prized possession..............................................Integrity

The most powerful channel of communication............................Prayer

The most contagious spitit.................................................Enthusiasm

Our greatest teacher...........................................Experience

"To the world you may be one person,
But to one person, you may be the world"

2006-12-26T18:06:00.000-08:00

OVERCOMING FEAR: One person's opinion of you does not have to become your reality.

If you follow my blogs, you will see that there has been no entry for over 2 months. Although I spend a good deal of my time coaching clients on achieving peak performance, overcoming fear, and owning their own life, I caught myself not practicing what I preach.

A few months ago, as I was building my website, I had asked a blog guru to take a look at my site in an effort to beef up the number of hits to the website attracted by the blog. Being fairly techno-illiterate, it is a mystery to me how to increase the traffic to my site so I thought his opinion may help me to increase business.

Although well intended, his review was scathing in regards to blog frequency and content and sent me into retreat. After feeling sucker punched by his comments, I then found out that a book proposal that I had been negotiating for the past 9 months with a large NYC publisher was turned down. Between the two, I successfully went into shut down mode and focused on finishing out my busy year of speaking engagements.

This was all fine and well until mid-December rolled around which gave me down time to actually think about what was happening in my life and career. I realized that I was hiding out from rejection and instead of pushing onward, I had shut down and done nothing with my site or any more on my book.

I had allowed other people, total strangers at that, to pull me out of my "zone" by allowing doubt and fear to creep into my mind. While I was busy, I could ignore it and bury it. But being a catalyst for self-reflection, I quickly realized that it was crippling me. And at first, the more time I spent looking at it and thinking about it, the more panicked it made me feel.

Then I remembered, our only true enemy is ourself. Our doubts and fears rob us of our dreams and ambition. In fact, when we start allowing others to determine how we feel about ourselves, our value and our worth, we are in a world of hurt. The gift to man is power; power and dominion over all created things; your mind, your body and your affairs. All unhappiness comes from lack of power. When a man imagines himself weak and the victim of circumstance, he has lost all of his power.

By your word and belief, you contact the power within yourself and then every burden is lifted and every battle won. Overcoming fear means to conquer all doubts, fears and negative vibrations. When you can come into perfect peace and poise, filled with love and good-will, all negative vibrations and misery will dissolve. You must still your reasoning mind and let the door to your good open. Your only enemies are within yourself. Hurt, resentment, hate, fear; these are all chains that keep your in your own self-imposed prison.

Anyone can have a life free from unhappy experiences. Since you attract whatever you focus on, focus on joy, forgiveness, wealth, health and happiness. Misery comes from man's own "vain imaginings." Withdraw all power from misery and pain and it is powerless to hurt you.

I once heard a story that when Clint Eastwood started auditioning for parts as an actor, an agent told him that his adam apple was too big and his teeth too crooked. What if Clint would have listened to the critics and quit then? He would have forfeited an amazing career and possibly a large part of his happiness.

So with this in mind, I have decided to wrestle my fears and insecurities into submission and my website will be completed by January 10, 2007. You WILL continue to see my blogs on a weekly basis, because guess what? IT'S MY BLOG!! I can do anything I want with it! And I am now beginning to work on my book again. So even if I have to self-publish, I am thankful that I live in America, the land of the free, and can do anything I set my mind to. Therefore, watch for my book on my website, probably around summer of 2007.

Thank you to all that visit my site and all of my clients that have become friends over these past few years. May 2007 bring you all of the happiness and joy that you deserve and may you own life instead of letting life own you. All of my best, Jenn

2006-10-10T21:44:00.000-07:00

T: Custodians and Self-Directed Retirement Accounts

Hi, bloggers. I just returned from a venue in Las Vegas where I was a break out speaker on the topic of water development as an investment. The conference was sponsored by one of the few nationwide custodians that allow true self-direction within a retirement plan. Their name is The Entrust Group and I have been affiliated with them for many years.

The conference was truly amazing. It was a client appreciation conference and featured many impressive keynote speakers that specialize in the tax and legal matters surrounding buying real estate and other non-traditional investments within retirement plans. We discussed technical topics such as the UBIT tax that comes into play when an IRA is borrowing money, LLC's and their potential benefits when used within retirement plans and how to supercharge your retirement plans by using specific investment strategies.

It was at the Wynn Hotel and Entrust really went all out, providing beautiful meals and mixers for the attendees. It was a full two days of education and I was impressed with how affordable Entrust kept the registration fees. In addition to the keynote speakers and breakout speakers, the franchise owners of Entrust were on hand to mingle and answer questions for the nearly 300 attendees from all over the U.S.

I don't yet know if this will be an annual event, but if it is, I highly suggest attending the next one. With Entrust's attorneys and CPAs on hand to answer the highly technical questions, it is an opportunity for professionals such as accountants, realtors, attorneys, financial planners and investors to get the really tough questions answered.

Entrust is the largest and oldest nationwide provider of self-directed retirement plans. They have been in business since 1981 and have 30 offices nationwide. I have sent business to them for the past four years and have been impressed time and again with their professionalism and accuracy of knowledge. They err on the side of conservative which I prefer because I believe its better to be conservative when dealing with the regulations of the IRS than aggressive.

By the way, did I mention that if you do a prohibited transaction in your IRA, the penalties could be as high as 150% of the account value? This is one of the reasons that it is so important to do self-direction correctly and having a custodian that is committed to staying abreast of the codes, regulations and changing laws is vital.

If you would like more information on Entrust or self-direction, please email me and we can discuss the services they offer in detail.

2006-10-02T09:49:00.000-07:00

T: NewNon-Recourse Lender on Board!

Great news! We now have another nationwide lender on board that does non-recourse loans to IRAs and qualified plans. The company is Colonial National Mortgage and the contact person for these loans is Dan Hessey. His contact information is 888-901-5363 or 303-443-4427. His email is danielh@colonialsavings.com.

The company has put alot of leg work and due diligence into lining up to do these loans. I have been very impressed with their professionalism and tenacity. If you are looking at using leverage in an IRA, it is worth calling Dan. Their rates are very fair, actually beating out their competition, and leveraging the IRA may be a way to get a "bigger bang for your buck" within the retirement plan.

Remember, always consult your tax professional when using leverage because depending on what strategy you are using, your IRA may have an additional tax come into play called UDFI. (Unrelated Debt Finance Income tax). If you have additional questions on leveraging within the retirement plan, feel free to respond to this blog. You may also want to refer back to the first blog on this site which discusses leverage and UDFI in more detail.

2006-09-27T22:04:00.000-07:00

OII: HOME

Authors note: This blog will have two different categories: OII stands for Observations, Insights and Inspiration. These blogs will be human interest in content. The "T" heading will be Technical Content regarding investing and the use of retirement plans. This will be an easy way for the reader to identify what they are looking for quickly. Please note all material is copyrighted. I hope you enjoy.

Home:

Last week I had an investor friend from California come and visit me for a few days at my home in Colorado. I invited him into my world, introduced him to the people I surround myself with and let him share my day to day life. At the end of his visit, we had a conversation that I found quite enlightening and would like to share it with you.

Although I know this man as a collegue and a friend, I had never actually known much about him personally. What he shared astonished me. On the outside looking in, he is what every person dreams to achieve. He is successful in his career, a wealthy investor and only in his mid-30's. He has a high level of knowledge in many areas and travels the world on adventures; rock climbing in Arizona, bungee jumping in New Zealand, sailing to Indonesia. He lives life to the fullest and I have always admired his thirst for taking risks.

What I found interesting was that the one thing he does not have is what is the root of what most people need...the feeling of home. Although he owns many properties all over the world, they are only houses, not homes.

So I began to ponder, what is "home"? Like many of us, I realized I take for granted that throughout all of my travel for both work and pleasure, I have somewhere to come home to. Home is not just bricks and mortar. Home is where the people that love you wait for you, home is a beautiful dinner on the table or the kind gesture that was not asked for. Home is having people around you that are always on your side, whether you are right or wrong. A place where joys and victories are celebrated, tears are wiped away, and the shoulder to lean on when the world is beating you up. Home is being able to leave your "act" at the door and feeling safe in being your true self with the ones you love. For me, it is also the big, slobbery kisses waiting from giant English Mastiffs jumping for joy at my return.

I guess that because I have been so blessed in my life, I assume that everyone has what I have in the meaning of home. It saddens me to think that as a society we spend so much time chasing wealth, success and material possessions that the amout of time we allot to building a true home sometimes becomes a lesser priority and gets lost along the way. It has become chic to measure success in dollars and cents, but what has happened to the value of home?

Although my friend is not obsessed with the pursuit of money, I realized that even solid people with amazing character and charisma can find themselves without a home, and as a remedy to that, I am honored to share my home with him and include him in my family.

Jenn's Gem: Pay attention to those around you, share your blessings with others, and if you find someone without a "home", help them to create one. Life is about the people we love and those who love us. Share your love with others, as ultimately it is the only thing that ever really matters in life.

2006-09-10T11:47:00.000-07:00

ARE PEOPLE LIKE GEESE?

Today, as I walked around a lake on my daily workout, I noticed something interesting. There were a group of geese, hanging out in a marsh. Some kids had paddled their boat near the marsh to take a closer look, and upon the geese noticing, you would have thought the world was going to end with all the commotion they made.

Then it dawned on me, are we, as human beings, like geese? We have a tendency to hang tight with a select group of people and often take turns being the leader. Is this because we want to share our power, or more likely, is it that we are afraid of making a mistake or failing, so we give our power away to someone else, thinking that they might do a better job in leading our life than we could. Is it possible to ever create the life we want to live when we are so willing to let others control our behavior and circumstance? In Nelson Mandela's 1994 Inaugural Speech, he said, "Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, not our Darkness, that most frightens us." Embrace your light today and create the life you were put on earth to have. You were not born to be mediocre, barely getting by. You were put on earth to achieve greatness. Look inside yourself and DECIDE that you are committed to creating the life you deserve.

Another likeness between us and the geese was that when strangers approached, their fear kicked in and they quickly took flight, while making quite a racket. Now this is understandable with geese because they do not know the difference between harmless children and hunters with guns. But then I realized, dont we as humans, often operate on a "fight or flight" attitude?

How many times, when meeting someone new, have we pulled away or been guarded, leery of their motives or the fear of being conned. How difficult must this make dating or forming new friendships, when we refuse to become emotionally vested in anyone for fear of being hurt, disappointed or left. Many people operate from a constant state of assuming everyone is "the hunter with the gun" and you know what?.....So what if it is. If we are not willing to take risks in this life, we might as already be dead. Every experience is a valuable learning lesson, yet as humans we try to give it a title as "success" or "failure".

What if we stopped trying to put everything into the category of right or wrong; good or bad. What if we could learn to look at each experience for what it really is, a lesson, instead of adding our own meaning to it. What if, instead of being reactionary, like the scared goose, we could embrace new challenges, new people and new opportunities. How great would life be if we could operate from the realm of possibility instead of the realm of fear? Instead of being the sqwaking goose, complaining about what is not right in your life, focus on what you want out of life. Your focus is a self-fulfilling prophecy. You get whatever you notice. If you focus on the bad, always complaining, you get more of that. On the other hand, if you focus on what you want and the possiblities you are creating, that is what you get. The most successful people in life have failed the most.

Jenn's Jewel: Don't be a goose! Live your life with purpose and possiblity. Live with courage, embrace your fear and take action.

2006-08-28T11:25:00.000-07:00

Your IRA can borrow money?!

Yes, very few people know that your IRA can borrow money when investing in real estate. If the IRA is making the real estate purchase, it can leverage as long as the loan is a non-recourse loan.

What is a non-recourse loan?

It is a loan that is secured by only the property that the loan is on. Meaning, if the IRA defaults on the loan, the lender can go after the property to repossess but cannot go after any other personal assets or any assets that the IRA has.

Because it is non-recourse, then, you will typically see a lower loan to value, such as a 65-75% LTV instead of the normal 90% LTV that most people are used to seeing. Also, the loan must be a portfolio loan and cannot be sold on the secondary market, which thereby takes some lenders out of this market because they sell off all of their loans.

You also cannot personally guarantee a loan that the IRA takes and cannot use your credit to qualify. The loan is based solely on the property and resembles a commercial loan. Meaning, the lender looks at vacancy rates, cash flow, etc. Although you cannot personally guarantee the loan, a non-disqualified third party can guarantee this loan.

To find out more about how leveraging within an IRA works, contact Jenn Dizmang or visit the website at www.JennDizmang.com
**All information on this blog is for informational purposes only. Always seek advice from a qualified professional.

2006-08-22T10:44:00.000-07:00

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