Flipping America 186, Self Directed IRAFlipping America

Expected Air Date: 9/13/18

Opening

One of the great opportunities in front of you as a real estate investor is the chance to invest your money through a Roth IRA, make profit, grow that wealth and one day when you retire, pay NO taxes on the profits. That’s just ONE thing a self-directed IRA can do for you.

We welcome to the show today a new sponsor, American IRA. American IRA is dedicated to helping investors grow their wealth through self-direction and there is a healthy focus on real estate. With offices in Asheville and Charlotte, NC and Atlanta, GA, American IRA is ready to get your started, point you in the right direction, and keep you safe as you navigate the sometimes murky waters of IRS regulations.

American IRA founder and President Jim Hitt will be joining us in just a few minutes. Jim started his career in the restaurant business, got involved in real estate and just never looked back. He’s been in real estate in one way or another for three decades.

His commitment is to help other investors grow their wealth wisely and safely through the use of retirement accounts. He’s going to tell us about the basic setup of an IRA, answer some key questions about structure, growing your funds, strategies for investing, and the different type of options available to you.

How to contact us

www.flippingamericanetwork.com

Facebook.com/flippingamericamedia

Twitter and Instagram @FlippingAmerica

YouTube: bit.ly/FlippingAmericaOnYouTube

Linkedin: bit.ly/FlippingAmericaOnLinkedIn

We now have a profile at houzz.com for what it’s worth.

Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.

Announcements:

September 12, Chantelle Owens at Flipping Atlanta, Tax Liens
FlipStarter October 13, Atlanta, GA
Lunch with me every Wednesday.
Flipping America App is in the app store. You can listen to the show, read the show notes, and the entire catalog of shows is now available to you. It’s a free download and there are no upsells or in-app purchases. Free to download, free to listen. Go ahead and give it a try and drop me a line and let me know what you think.
Want a quick analytical tool to tell you how strong a potential fix and flip deal is? Download the Property Grade app. You answer 10 simple questions about the property and the app instantly tells you what you can expect to make, your return on investment, your return on cash, and then the program gives the project a letter grade using the proprietary Flipping America Investment Property Grade algorithm.

Guest: Jim Hitt, American IRA

Comment Line calls and Questions

Call 404-369-1018, press 1 and leave your message!

Emails:

Questions@flippingamericaradio.com Tell us where you’re from!

Alphonso, Marietta, GA, “With the hurricanes threatening the east coast, can you comment about the impact of hurricanes and real estate investing?”
Julian, Bay City, MI, “I watch the TV shows, and now I’ve found your show and I’m intrigued. There might be some opportunities around here, but we have long winters and I’m not sure it’s a good idea to be trying to do this in the winter time. What are your thoughts?”
Cheryl, Washington, DC, “Does price range matter?”
Polly, Visalia, CA, “I have an opportunity to buy an almond grove that is past its prime. The owner has gotten old and lost interest. The upside is our town needs housing and I could turn this into a nice subdivision of starter homes. But I have no idea how to proceed. Any suggestions?”
Edward, Columbia, SC, “Someone told me that you mentioned on the show that our city is one of the few major metropolitan areas in the country that is NOT on fire. Why is that? And since I live in Columbia should I be looking elsewhere for opportunities?”

Motivational Thoughts for the day

Expect problems and eat them for breakfast. Alfred A. Montapert

Transcript

[0:00] Music.

[0:15] Flipping America the show that teaches you how to make money in real estate wherever you are whatever your situation there is an opportunity for you flipping America is sponsored in part by American IRA

founded by investors for investors on the web at American Ira. Com.

And by Braswell Capital Solutions commercial lending made easy on the web at Braswell Capital solutions.com.

And now you’re sad flipping America guy Rodger Blankenship.

[0:47] One of the great opportunities in front of you as a real estate investor is the chance to invest your money through.

A Roth IRA make profit growth at wealth and one day when you retire pay no taxes.

The prophets but that’s just one thing a self-directed IRA can do for you we welcome to the show today a new sponsor American IRA

American Ira is dedicated to helping investors grow their wealth through self-direction and there is a healthy focus in the company on real estate now with self-directed accounts you can invest in a variety of different assets there are some limitations and we’ll go over those in a little while but with offices in Asheville and Charlotte North Carolina and Atlanta Georgia

American Ira is ready to get your investment party started point you in the right direction

and keep you safe as you navigate to sometimes murky Waters of IRS regulations American Ira founder and president Jim hit will be joining us in just a few minutes Jim started his career in the restaurant business

got involved in real estate and just really never looked back he’s been involved in real estate in one way or another for over three decades now and his commitment is to help

other investors

grow their wealth wisely and safely through the use of retirement accounts he’s going to tell us about the basic setup of an IRA answer some questions about structure.

[2:10] Growing your funds and strategies for investing and the different type of options available to you.

That’s coming up in just a few minutes I want to tell you how to contact this you’re welcome everyone hello how you doing I am Roger Blankenship and I teach people how to make money in real estate and boy do we have some things Brewing here at flipping America I’m so excited I just can’t tell you yet.

I am excited things are happening get ready.

[2:35] It’s it it’s happening on multiple fronts but the show is continuing to grow and good things are happening here and

some of those good things going to spill over and be good to you just hang on a little bit and we’ll have formal announcements coming up but to reach us now

dot-com we answer every question and if you have questions about the topic today using your self-directed IRA go ahead and send them in I don’t care how complicated is I’ve already warned Jim.

He’s going to get

the IRA related questions from now on now the one that I dealt with last week was easy and I can handle that one but the tough stuff we’re going to send it to him so go ahead and line up right now and send a question Jeff flipping America network.com or if you don’t do the email

that’s okay you can call now if you don’t do email or phone I’m free we’re not going to hear from you but

but I think most people can least call 404-369-1018 extension 1.

[3:42] Okay I just had a silly thought if you don’t do email or phone come have lunch with me every Wednesday we have lunch at Huey luey’s Mexican restaurant in Sandy Springs Georgia if you’re ever in the Atlanta area if you come in from out-of-state and say you heard it on the show your lunch is on me

okay we may have two people there we may have 40 people there usually we have about 15 to 20 but we just hang out and talk real estate.

Every Wednesday right here in Atlanta Georgia if you want to find this on the internet you can find us on Facebook of course

just look up flipping America media and then on Twitter and Instagram we are at flipping America.

[4:21] And you definitely want to follow us on Twitter because we are linking to articles about real estate all day long and those links will take you to the stories you can read them for yourself now

there are other stories that make it into the show notes and you can get the show notes by downloading the free flipping America app

it’s a free download and there are no upsells or in a

purchases it’s free to download free to listen go ahead and just give it a try and you know what I would appreciate it if you drop me a line and let me know what you think you can just send it to Rodger at flipping America network.com or questions of flipping America network.com both of those email addresses work

okay do you want a quick analytical tool to tell you how strong a potential Fix and Flip deal is

download the property grade app it’s also free there’s no in-app purchase there’s no upsell and there’s no limit to how many times you can use it you just answer 10 simple questions about the property and the app instantly tells you what you can expect to make your return on investment you return on cash and then the program gives the project the letter grade using the proprietary flipping America property grade algorithm so cool

and it’s free.

[5:27] You see here on this show we encourage real estate investing now we don’t encourage everyone to drop what you’re doing and start flipping houses like you see on TV that’s simply not the path for everyone but we do encourage everyone

to have investment in real estate as a part of a balanced portfolio and to that end.

We are dedicated without mitigation to providing you.

The best information resources techniques strategies processes

demographics marketing Trends statistics whatever it is we need to help you be great at this because our goal is to make you a millionaire.

[6:15] Real estate investor how about that so thanks for tuning in.

And we’re going to get to Jim hit in just a few minutes but after that all I’ve got a couple of them down since I’ve got to run by you tonight in Atlanta Georgia.

Chantel Owens the one the only queen of tax liens is going to be at

flipping Atlanta our local Meetup Group our local Meetup Group in Atlanta this it always amuses me that there are so many people interested in real estate investing we have more than 5,400 members in our local Atlanta meetup groups and that’s just in Atlanta and so we’re

thrilled that we’re able to touch so many of you right here in Atlanta but,

I want invite everyone to come out tonight if you’re in Atlanta come out and hear Chantel Owens at flipping Atlanta and you go to meetup.com flipping Atlanta or one of our other Atlanta meetup groups you can

I’ll get the information about this thing Shantel is going to be here to teach us about tax liens and how we can buy houses for pennies on the dollar and that’s tonight.

I got one more announcement that I am going to do but it’ll be after we talked to Jim because that means it means that.

[7:27] Music.

[8:00] You never know what’s around the corner

but you can be confident that you’ll be ready for whatever comes your way Legal Shield and ID shield look out for you so you can get back to living life

LegalShield is a prepaid legal service for individuals

businesses for a low monthly rates you get comprehensive legal coverage face whenever you need it.

Protect it for a number of legal issues and assistance with common legal need just go to Rodger b helps. Com right now to sign up that’s Rodger V.

Dot-com Legal Shield protection for every part of life.

[8:45] Music.

[9:04] Jim hit welcome to the show and thanks Rodger looking forward to it.

[9:09] We’re glad to have you here the company that you represent is such an important part of real estate investing and I know you guys do a lot of other things besides real estate

let’s just talk about a little bit American IRA and the idea of the self-directed IRA versus what most people would be familiar with a 401k or something like that.

Well Ava.

[9:38] Paycheck and the employer matches part of it and that’s in Destin is Securities mutual funds bonds Etc a company like American IRA.

We don’t offer any bonds Securities mutual funds we don’t have any offering investment advice what we do is act as a passive custodian.

people to be able to invest what we call a real estate gold private placement but we do not have any product to sell Rodger that’s one of the Securities firm.

Right now if you have a 401k in a sense that’s somewhat self-directed right it’s just a limited range of options.

Yeah that the trim self-directed that we use in our industry is is actually not a hundred percent correct.

[10:32] Ira self-directed unless you have specific somebody to manage it for you so,

the self-direction comes into what you can direct into a company like oh so you might see advertised on TV but you can direct it into our stocks bonds and mutual funds.

With us what you can do it into our alternative assets not including stocks.

Private placement meaning of investments in private companies possibly at make loans there’s a

none of it has to do Securities you’re not selling any of these

products are are things that people can invest in that we don’t sell anything we don’t give any investment advice okay

Rodger would tell us what you want to invest in and we would fulfill that obligation.

Based on your instructions for instructions only so how would you characterize your rolls or like The Record Keeper or.

[11:44] Our role is a third-party administrator and custodian through our

sister company nutrition Trust Company okay it’s so I’m going to ask an obvious question here but why wouldn’t you why does somebody need you why can’t they just pick things that they won’t invest in on their own and you’ll be there on administrator.

[12:06] Well they need us because the Internal Revenue Service says they need us to section 408 so you have to have a qualified to be a tax free,

opportunities to grow your money otherwise.

Yeah yeah there you go I think that’s what I was looking for anybody can pick stuff to invest in but if you want the tax benefits of it from thermal retirement plan it has to go through a qualified third-party administrator like you.

Custodian correct Okay so.

Now that now we got to self directed IRA and the idea of the Roth IRA can you help our listeners understand the difference between nose.

You got a traditional IRA which is been around since 1974 and that’s the the IRA that most people are familiar with and that is a.

[12:58] Orig makes a $5,500 contribution and you’re able to write that off based on your earnings.

In the money grows tax-free but you will pay taxes when you take it out at the end with a Roth IRA the exact opposite is true you do not get a tax deduction.

You’re limited by income and how much you can contribute or contribute at all and then the second thing is never pay taxes on it.

Once your account’s been established for 5 years and you reach 59 and a half.

Repeat never pay taxes so for example if I’m 50 years old I open a Roth I’m on 59 and a half.

Whatever money I have it not this grown I never will pay taxes after sure taking it out if I’m 59 today so I have to wait till I’m 64 before it comes tax-free so it’s 59 and 1/2 inch 5 years after.

Okay.

All right in the ditch tax free on the game apps for everything yep yep and so you will have paid taxes on the money that you put in but now I’m what you said,

some people are not eligible to to contribute I think if you make too much money you can’t contribute.

Correct there is a income limit I’m not going to bore you with the exact number.

[14:21] North of 174 year and if you make more than that isn’t is a couple then you can’t contribute at all 2 a.m.

However there is a shot an actual product for Thursday technique.

Called a backdoor Roth It’s anybody can contribute how much money they make to a traditional IRA does not matter.

So once you make that contribution Rodger.

Then you can immediately convert it to a Ross there is no income limit on that that song.

Best Kept Secrets around can you keep this traditional IRA open and make more contributions as you have more money over the next few years and then roll that into your Roth.

Every year you get your limited by how much that you’re under 50 if you put 55 away 5500 a year if you’re over just use the 6500 a way to continue rolling it over to a Roth regardless.

Okay so when you put 5500 in let’s say someone is out listening out there and they’re in their thirties and they put 5500 what can you do with 5500 make any money.

Have any ideas I do actually that we can get that question a lot I don’t have a lot of money what can I do for my real estate had on for a second.

[15:48] What happens is if you have a a smaller account whether it’s a Roth or any other type of account.

What you have to do is you have to be more active to make the money bro.

I bring a million somebody brings a million dollars interest rate their property they want to go they want and let it do whatever I do.

5500 you have to understand how to make it grow so you have to be able to understand in and we’re talking about you’re in Georgia there’s things that they.

$5,500 compounded at 20%.

In Georgia can grow quite rapidly you can also if you’re familiar with the term called

wholesaling or options that you can buy options and option you buy for $500 let’s say that you may turn around and sell it at 2,

duster at 10,000.

[16:52] Check your state and many other states is his bike tracks.

Mini bikes with key takeaway from this Rodger is that in order to grow a small account you have to be active.

Investor you have to understand what do I need to just doesn’t grow by itself okay that’s a good Segway and we’ve got to go to a break when we get back.

[17:14] Music.

[17:36] Hey you want to learn how to flip houses I want to show you how to flip houses and there’s probably no one in the country better qualified than me to show you I’ve looked hundreds and hundreds of them.

And I also have some training and degree and experience and education so I could show you how to do exactly what I’ve done hundreds of times don’t believe me.

Head on over to put starter event.com but in the meantime Give a listen to Pat caywood.

[18:02] Cleveland Tennessee and I’ve been.

Doing some flipping since about March of this year and had started with a Nationals program that was very expensive I spent today with Roger Blankenship.

Learning about his program and boy do I wish I’d met Rodger.

[18:25] He has a clear concise program and many tools that are going to be very hot.

[18:30] And starting and managing the program and the mentorship and Leadership and coaching that he’s offering our invaluable.

[18:40] Thank you so much Rodger.

[18:42] Music.

[19:36] Okay when we went to the break you just answered the question about what do you do to start building up your money when you just have a little bit of money.

And you got some ideas there and I get that question to here at the show and then we kind of have a standard answer I’m glad to see their own Safeway

wavelength with that but now I want to ask you a question that I ask a lot of people on the show because.

As long as I’ve been doing the show when I talk to people in this industry no one set out to do this we all intended to do something else for their lives and we ended up here and so here’s a question when you were a kid

what did you want to be when you grow up.

[20:15] Rich okay that’s honest how are you going to get there.

[20:23] I started off from back in the stone ages as a in the restaurant business and there was a company in California.

Sambo’s and they have in end either they went out of business and I went to work for them when I was about 18 years old and they had this phenomenal program for their managers.

And the manager so isn’t as a manager you will got to own 20% of your store but she got to buy after the first year

you got to start buying groups winning percentage of other stores so you could compound it so the projection was by the time I was 30 I would have had back in

dollars in a 50,000 a year and in passive income with they called it a passive income and an income of $100,000 pretty good back when your night in 1970.

Yeah but you still sounds pretty good today however,

that was my goal well unfortunately I found out that I wasn’t really a great employee I was a great

worker I just wasn’t great employee so I didn’t like the way they did things and I might have mentioned it to him so it was fine until that part so.

Then I moved on to the real estate I I went in the real estate business is the salesperson when I was 21.

And I don’t know two things I’ve been fascinated with real estate and.

[21:51] Have the samples program so here I am I 21 years I’m a licensed broker in the California I got a nice right now.

So license broker and I’ve been.

In the business for what 45 years as an investor broker I go into escrow companies I’ve got a.

I’m a real estate investor.

That owns an IRA company I’m not an IRA guy talks about real estate so that’s that’s my background I’ve been at it for a very long time.

Rental Commercial properties in subdivisions and bought and sold and.

And so forth so I enjoy this because I get to do what I love most of what we do is his real estate and so that’s how I ended up getting where we are now fast forward to 2004

random.

I know about self-directed Ira since 82 so 2000 at the opportunity to become part of the Shelf truck tire industry and I knew what it’s all about so I grabbed the opportunity and from there.

[23:05] Okay alright and you know we mentioned Sambo’s when I was in college we used to do our all night studies at Sambo’s eating pancakes and studying calculus.

And nickel coffee.

Something to keep us wait with cramming for finals at Sambo’s in Chattanooga Tennessee back in the 70s.

It was a great time so now the company is in Asheville North Carolina from California to Asheville how do you end up picking Asheville I know it’s a great place.

A family is here so I came back and found out I actually liked it decided to move here.

Okay and it’s a hip and happening place right now with all this going on in the city and in the surrounding area yeah it’s a good place I could place to live in and enjoy your your work weekend your weekend.

Now if we were coming back to thinking about self-directed IRA.

Is there any limit to what people can invest in it’s their money and you’re administering that you’re kind of The Shepherd of it but are some things that you cannot do.

I need to know about that there are some things you cannot tell you can’t invest in the property that you currently own.

[24:28] You can’t invest in property that’s owned by disqualified people Stitch as your spouse your parents your children any entities that they owner they control.

You can’t invest in gold you can’t invest in.

Antiques Collectibles rugs wine anything was considered to am there certain types of insurance.

So other than that anything was not prohibited by the code to Revenue Service Code tells you what you cannot.

[25:05] Invest and it does not tell you what you can if I sense if it’s not prohibited everything is okay so no Beanie Babies.

No beanie babies all right now

there’s the code and then there’s the practice in some of the areas in the code I know when I first started using self-directed Ira years ago there were a lot of questions we had to.

Will really sure how they were going to work out how is that evolved over the years are we getting more clarity on what you can and cannot do kind of things,

I think the court cases are are pretty limited but it’s it’s crystal clear that you can’t do his self deal.

That’s Crystal Clear are there are some cutting-edge questions ocana if I own 45% of a company can I loan at money.

Those are questions at least on the surface the code says if you own less than 50% but there’s other considerations.

Mike coming I’m not going to boil your audience with that the consideration is how deep do your control Essure control.

Those are the hardest questions to answer

okay yeah well I had a question come into the show a couple weeks ago and I just

president forward it on to you I thought I could deal with this one myself gentleman said I just use my self-directed IRA to buy a ski retreat in Jackson Wyoming or in that area is it how many weeks a year can I use it.

[26:35] The answer is a 0

yeah right that is a very calm and I’m glad you brought that up cuz I wanted to cover that one of the most common questions we get it’s just what you just said I want to buy a beach house I want to buy a mountain house

I want to use it and I understand like he’s at 14 days a year.

Oh that’s not correct if you make an investment in your IRA or self-directed plant with it’s an IRA or 401k and I’d like to talk about that also is you cannot use it at all you can’t perform any services on it.

You can’t do anything you cannot have your disqualified people like your family go up there you know what brother sister and her uncle is not a disqualified person but your children Baron’s wife is am so

the only way Rodger that that really works is if you want if you know you want to retire to the beach.

What I tell people is it’s quite simple I’m 50 years old I want to buy a beach house I believe that beach house is going to go up and die you significantly on this is a question you have to run by your CPA prior to the strategy would be simple.

I would take my traditional IRA converted to a Roth.

[27:47] Fight with a Ross Let It Grow tax tax free on Cyrus 59 and 1/2 I can take it out.

[27:55] It’s a distribution 100% tax free regardless of the value and now I got my beach house using my retirement account.

Okay well with that let’s go to Quick break we’ll be right back.

[28:11] Music.

[28:19] Are you one of the 70% of Americans living paycheck to paycheck and tired of the stress if so I understand that used to be in that 70.

[28:29] I start investing 2003 with my net worth with -80 thousand since then I’ve built a business that generates over $500,000 a month in income and allows me the freedom to do what I want I’m Brad Chandler and I tease people just like.

[28:42] How to find Freedom to real estate investing using a tactic that doesn’t require credit or tons of cash for a free training on how you too can do this please visit Brad camel.com.

[28:52] Hey flipping America listeners have you ever walked into her property and said I have no idea what it will cost to repair this home those days.

[29:00] Music.

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[29:51] Music.

[30:29] We’re back that’s good information and yeah I appreciate that we were talking about how to get your beach house and of course now.

I’ll give you brought up something and I wanted to ask you about and I think I know the answer to this fit that you’re the expert tonight I really need to know someone can’t just if they’re working and the career and go along everything’s happening just fine they can’t just.

Shut down there irn converted to a Roth Kenny if they have an IRA and they they can do a conversion to.

If they’re working they have a 401k…. The question is if they have a 401k if you are currently working where you have the 401K you can’t move that 99.9% of the time there’s always an exception.

You can pretty well count on it being no she can’t move a 401k at a current employer 99.9% of the time so there’s no conversion to a rock that you have a traditional IRA.

That can be converted into any point in time but that’s no problem to a rock.

Okay well that’s good to know and I wanted to clarify that because a lot of people that are out there and they have this employer-provided 401K they they can’t just if they leave the company I understand they can then convert that

I just want to say employed there it just got to stay there like if you leave your employer.

[31:56] Don’t or consider not rolling over the.

Old 401K to your new employer 401K because you lose control of what you can invest in you put it in a traditional IRA you have you get to use that money however you choose and you have total control over

moving it to the other employer control to the employer and many people don’t know that there’s something okay,

so I’ve got a listener out there maybe maybe a thousand of them they’re just rolling along in their job and career and their 401k and what options do they have for doing something like that.

And they just go out and start a Roth IRA with you.

Shrimp dick and put in $5,500 I can put in 65 if they’re over 50 and they can continue contributing into it and we already discussed what to do with a young.

Smaller account.

So they would pay so you can have more than one retirement account correct alright go ahead.

[33:06] What make sure we get you figure out as quickly at your audience because gamer going to be self in real estate people real estate professionals.

Sales people that are 1099 of a solo 401K it is all the self directed IRA.

Can you get together.

With no income limits so it’s for example Rodger you’re a real estate agent making a hundred thousand a year 50000 you can contribute $17,500 if you’re under.

[33:41] 50 Troy Roth account make from the first 17-5 that you earn.

Okay that’s a real tool no income limits so if you qualify for that then you would that’s a great product for a self-employed people okay what are the qualifications.

I have to be self-employed no employees at work more than 1000 hours per year and that.

[34:11] I can have a partner but I can’t have any employees work thousand hours here in Moore and the other thing is if you do have a.

Can cause a regular job that has a 401k.

Then you can come you can’t use the income from that job to contribute to your soul okay you must use your self-employment income to contribute to it.

[34:34] So those are a couple things at Giant it’s a really powerful tool plus you can borrow from it you can’t borrow from an IRA.

Okay and do you guys do things with medical savings accounts health savings accounts and college funds HSA account.

So those are both great investment products for your your future.

Real free samples and stops with your employer plans so gym till our lives there so they can reach you what’s the best way you can reach us at American high or a.com.

[35:13] It’s American Idol, you can also call us at 866-7500 IRA.

AJ +686-670-500-4722 we will be happy to visit with you about whatever you need for the self-directed IRA world.

[35:31] And anything else for that matter that might be burning questions about how to set up different types of accounts.

Great that’s terrific gym hit Merrick and I are a new sponsor to the show thank you so much for taking time out of your busy schedule today to talk to us we really appreciate it thanks for telling me I will have you back soon.

[35:52] Thanks.

[35:54] Music.

[36:10] Not too long ago we did a one-day flip starter in Chattanooga Tennessee and low and behold one of my old College friends came out to the event his name is Peter Faulkner and here’s what he had to say about the event.

[36:23] Peter Faulkner here I tended a one-day flip starter training session led by Rodger blank.

And I was amazed to see what has happened in Rogers Live from the last $15 plus years flipping over 800 houses and then this one day training he told how he did it and what.

Falls the blessings the benefits and how to do it and I was so impressed with how well organized and how smooth the training went well today.

You’re tempted or in courage to go go at was not a bad price and if you get a chance to do it even just to consider in Basque.

I just want to thank Rodger for a great day today and appreciate what he’s doing.

[37:08] Music.

[37:20] We’re back thanks Jim if you’re listening to this we appreciate you taking your time and and and lightning us a little bit about the Ira self-directed Ira is Ross and so forth and I remember everyone American IRA.

Calm now let’s take a little time and see if we can answer some questions because we’ve got some coming in and some of them were very timely Alfonso for Marietta Georgia says

with the Hurricanes threatening the East Coast can you come in about the impact of hurricanes and real estate investing I can I will I think that

some of the things that go on in the aftermath of a natural disaster or just shameful things that everyone knows there are storm chasers out there.

It could be roofing companies and an unscrupulous contractors and that’s you know that’s just the kind of thing that’s going to bring those kind of people out but along with that.

There is a genuine need for people to do the work to repair the houses a lot of people lose their homes in this.

[38:22] Events like this and I’m thinking about what happened last year along the with the Texas coast and in Florida and,

I watched as some of my fellow investors you know.

They weren’t just praying on the misfortune of others there’s a real need to rebuild these homes and people rely on that you know if course

the current interest rockshire in any of these communities is just not enough to take care of all of the needs.

Come if they had that much infrastructure there in terms of contractors and building supplies in that sort of thing then they would be sitting around most of the time with nothing to do so things get thrown out of balance when there is a natural disaster and of course they need outside help.

And this is an opportunity for you Alfonso to after the storm has cleared to get to the dam and stricken areas and

what’s going to happen is some people are going to have a total loss and some will have a near total loss they may get a settlement from your insurance company and decide to use that you know after the mortgage is paid off hopefully to use that to.

Just move on with their lives and not fix the house.

[39:31] Those properties will then basically get dumped out there and that will create some opportunity now there are

also some others who maybe don’t have the same character they get the insurance settlement they don’t pay off their house they just leave and they don’t fix it those go into foreclosure and.

As the as is true to the course every time this happens we have seen a bump in

the faults in foreclosures in Florida and Texas since the two hurricanes from last year better does coast and it’s going to probably happen again with Florence is probably going to happen every time the storm comes by.

If you are cash heavy and looking for opportunity and willing to temporarily relocate or at least to get things going there are opportunities for you to make some money there.

[40:21] If you’re just interested in making a quick buck.

Won’t stay at home and sell used cars okay just stay out of this business because the house is need to be repaired they need to be repaired up to the current code and there are a number of challenges you’re going to face when you

you coming to a new area and building code is just one of them

and I imagine that the locals are going to be a little bit leery of you coming in from out of town I’ve never tried to go and do the work there to help rebuild

I know some others that have and have done very well with this so there is an opportunity there I wouldn’t

put myself out there as an expert on exactly what to do I just know that there

there will be an opportunity for you along Coastal Carolina in coming weeks and months just because of what is about to happen.

Julian in Bay City Michigan.

Says I watch the TV shows and now I found your show and I’m intrigued there might be some opportunities around here but we have long Winters and I’m not sure it’s a good idea to be trying to do this in the winter time what are your thoughts well I understand

that time you do have limited opportunities there in the winter time especially for outdoor work but I think that you can time things and if it may be that you get to a spot where you just can’t get through work out doors done.

[41:39] And it’s possible that you’re going to hold houses a little bit longer because of that but you know if you watch the shows one of the show’s is based in Minneapolis Minnesota and gets cold there too I was in Minneapolis one time doing a talk

and it was.

Early May and as I was leaving town a snow storm hit and it was a little dicey whether we were even going to be able to take off in the plane and I thought that’s crazy man who wants to know in May well everybody lives in Minnesota going to put up,

because it happens so you have long winners that’s fine.

[42:15] If you want to look around for a reason not to do something it’s easy to find reasons not to do something but I wouldn’t let The Long Winter stand in the way instead

I would imagine it even in Bay City Michigan you got some other Real Estate Investors around and you can go and check with them and find out what they do to.

Get this done in the winter time and working around the winter I am not an expert in

Michigan Winters I really am not I’ve never lived through one I’ve lived through some in the Philadelphia area and I would imagine that yours are a little bit tougher up where you are

but even if illadelph Iya there is a healthy environment for building houses and flipping houses and a lot of activity going on so it can be done,

you just have to plan and I work around the weather Cheryl from Washington DC says does price matter.

[43:08] That’s a short question and boy that leaves a wide open answer.

My question is about your question is does price matter with regard to what and course we got

got with Cheryl and she got back to us and said that she’s really talked about price range for what you going to sell the property that’s what she meant okay with regard to what you’re going to sell the property for does price matter and.

The answer is it depends of course it depends on whether or not you bought the deal right.

But buying the deal right is not necessarily just what you pay for it it’s also

understanding the condition of the market and even the neighborhood where you’re buying it’s important to take a look at a lot of factors like this but you definitely want to know the market.

[43:57] And what we’re seeing is in Washington DC our analysts are suggesting that the market is generally softening and slowing down but I’m Washington is like

most other places in the country the luxury Market has softened quite a bit

and majority of the houses that are being listed for sale in the luxury price range are experiencing

reductions in price before they actually get sold now this is a new development over the last six or eight months that we’re seeing.

This number of properties go through price reductions but what that tells us is the market is moving back.

Toward a balanced Market it’s happened before it will happen again this is not the sign of an impending crash it just means that things are proceeding as normal for a while

over the last 36 months you’ve been able to,

put a property out there sticker price on it and you’ll get that maybe a little bit more if it can appraise that’s beginning to change.

[44:55] And what is now is the way it is most of the time did you know that most of the time most houses are.

Reduced in price at least once before they sell why is that I think you can understand that

and for the homeowners prospective they’re living there they’re not in distress and they don’t have to move right away they want to get as much for the house as they can so if the agent says you know the markets hovering around 350 to 400,000 why don’t we try listening at 4

399 in the homeowners say well I really thought we could get for 25 because my friend’s brother sister-in-laws nephew,

got 4:25 for his house and it’s only 7 miles away and after the real estate agent tries not to laugh at this they will come back and say

keynote fighting for 25 is pushing the market but if you want to do that we can

we can try it but I would suggest suggest we not do it for more than a couple of weeks because I really think the price has to be under 400 to get it sold and so you’ll see

people listing the price at and unrealistically high number because they want to get as much as they can or

because surprise surprise some people think their house is worth more than it actually is and that would be most of you

most of us we think our house is worth more you know I’m about to sell my longtime home in McDonough Georgia and.

[46:19] As we’re talking about it course I had to undergo the same thing I want to get as much for it as I can

and so I’m asked my realtor what’s the upper end and what are we what’s the sweet spot where can we expect to get a quick contract on this and then we work around that with the numbers to try to come up with a price so.

All this is to say price does matter here’s how it matters specifically Cheryl.

If you’re in the upper end if you’re in the luxury market and in Washington DC I think that luxury Market is going to be somewhere around the 1.2 to 1.5 million in Atlanta Georgia the luxury Market begins at 750,000 believe it or not

and the price is going to be different in different markets what constitutes a luxury home it’s not really the cost of construction

by the way it’s the cost of the dirt underneath the structure that’s what’s really driving these prices but there are

particular reasons why Atlanta is historically and continues to be cheaper

then a lot of other places it’s not because of the quality of construction or even the cost of the building materials or even the labor it is the cost of the dirt underneath.

[47:28] So when you’re looking at a higher in property you just need to know and plan for having a longer time on Market

and as long as you have bought it with that consideration knowing that you’re going to hold onto a little bit longer and if you’re paying interest on the money it’s going to be a little longer so yeah price matters and there is a price range usually in the starter Home Market where

do you get it out there and if you list it it’s gone and speaking of gone somewhere we will be right back you never know what’s around the corner

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[49:25] Music.

[49:40] Okay we’re back I’m Rodger and I teach people how to make money in real estate and I’ve got time for I think for a couple more questions

poly from Visalia California says I have an opportunity to buy an Almond Grove that is past its prime

the owner has gotten old and lost interest the upside is our town needs housing and I could turn this into a nice subdivision of starter homes but I have no idea how to proceed any suggestions.

Well.

Poly if you have no idea how to proceed my first suggestion would be to not proceed because it’s complicated to put together a subdivision into

to develop a subdivision out of the ground really requires a specialized knowledge of development now one thing that you could do okay in this is.

If you’re going to develop a subdivision first of all you need to know that the city planners are even interested in allowing it to happen usually there is a long-term growth or,

land use playing at the building department in your city and you can check with them to see if there is ever any intent to allow that the zoning change or if it’s a possibility to get the zoning change then

I do not suggest that you try to become a developer.

[50:53] If you want to be a developer and this is something that you want to do is you’re going to need to spend some time working with and for a developer to learn the game because there is a game and a whole set of procedures around this that you’re going to have to know

in the meantime what you could do

and it sounds like you have the inside track on this Almond Grove and I know that you’re in California and you call him a man grows but I’m not going to do that because everywhere else in America use

pronounce is the L so if you do have the inside track what I would suggest that you do is go to the owner of the Grove and offer them an option on the property

I’ll see if you can get type the property 4000 or $2,000 and give yourselves give yourself 6 months to a year.

Depending on what they will allow and ideally if you could if you could buy an option on that property for a couple of thousand dollars for a year you set the price that you’re going to purchase it for within the next 12 months,

and as soon as you get that option secured you get right out there and start talking to local developers you don’t want to talk to the developers before you have the property tied up you don’t want to run the risk of them coming along behind you and go again talking to the Almond Grove owner.

[52:03] Themselves so once you have the option secured and recorded.

Then you have what’s known as Equitable Title to the property and when you have Equitable Title they owner can’t even sell that property without satisfying your option so they can’t come and they can’t go and take a higher offer from anyone else

then you can go and you can talk to the developers in the area and see if there’s any interest so

the catch is if you don’t get a buyer in 12 months you either have to close on it are you lose the $2,000 or whatever it is you agree to put down to purchase the auction but

the good news is let’s say that you set a future price of a million dollars and you’re able to sell it for a million five that five or five hundred thousand in this case is.

Your profit.

[52:51] Pretty cool huh I would suggest that you do that rather than trying to become a developer yourself now

if you want to know what the future value of it’s going to be a developer is going to end up with lots and those lots are going to be worth what lots are but there’s a cost to develop the lots and the developer has a formula that they want to use.

That may or may not be connected to the cost of the raw acreage so you’re going to do your research probably I can’t do it for you but that’s what how I would proceed.

You know I know the steps in being a developer and I’m not one for a reason I have a radio show host because it’s easier to find a microphone and talk like you know what

you’re talking about then it is to be out there actually doing it much respect all the developers out,

so go find one and after you get the property tied up and I wish you the best of luck Edward from Columbia South Carolina says

someone told me you mentioned on the show that our city is one of the few major metropolitan areas in the country that is not on fire why is that and since I live in Columbia should I be looking elsewhere for opportunities.

Edward I know that I mentioned that a while back and I’m intrigued that you picked it up cuz it was just well I can maybe.

Mentioned it in passing a couple of times but thank you for your question thank you for writing and we appreciate that I’m not really sure I understand why.

[54:17] Hino jokingly I might say

maybe nobody wants to live in Columbia South Carolina but I’m kidding Columbia the Columbia Market has been normal all along and the interesting thing is Columbia was not very hard hit in the crash of 2008 I don’t know if you were living there then or paying attention then but that’s one area that.

Didn’t really suffer a big loss and I think that’s why it didn’t have that much to regain.

And so we didn’t have to have much paste to regain the little that was lost but I do know there are opportunities there in fact.

[54:53] Just two weeks ago we had someone in our office here in Atlanta from Columbia taking our 3-day course and that’s the three Day Fix and Flip intensive

and he was from Columbia and so part of what we do in the courses we get on the phone I teach people how to work with wholesalers and so we brought up the Craigslist and we got on the phone and.

First phone call Trish mcelwee

made we reached out and talk to someone in Columbia and found a deal that look like a deal and so I sent that individual home with a deal possibly in his pocket and we’ll see but

it look like there are a number of opportunities and here’s the thing

the market doesn’t have to be on fire for there to be opportunities in fact when the market is on fire it’s usually tougher to find Opportunities to buy there’s nothing wrong with that and there’s also nothing wrong with the market not being on fire

listen

I made most of my money in 2009 to 2012 when the market was anything but on fire however we were able to buy properties so cheaply then.

That we could sell them for far less than what they would be worth and what they are worth now and still make really good money turning over multiple houses every month it doesn’t matter,

the temperature of the market.

[56:09] This is all interesting and I report on that when I get the data from Adam data and various places but it doesn’t really matter so much what the market is doing what matters is how you

buy the property and what you pay for it what you do to it with the intent to sell as long as you buy right you’re okay.

[56:30] I don’t think I have enough time to do another question on this show to give it to a fair shake so let me just remind you of some announcements if you’re going to be in Atlanta Georgia tonight that’s tonight

September 13th That’s Thursday September 13th I want invite you to come out and hear Chantel Owens talk about tax liens is at the.

At the Hudson Grille restaurant on Roswell Road in Sandy Springs everyone is invited out of course you can come have lunch with us anytime on Wednesday and that’s every Wednesday at Huey luey’s

Mexican restaurant in Sandy Springs and if you’re wondering why Sandy Springs I know that

this show has come to you for a year from Midtown but just a reminder we moved our offices recently to Sandy Springs and that’s where the studio is now we’re not overlooking Peachtree Street anymore while we make the show

and that’s okay it’s a little quieter here actually we don’t have to have as many interruptions for fire trucks going by and we like that so we’re doing our networking events in Sandy Springs.

[57:27] Remember that you can find us on social media on facebook.com

flipping America media you can find us on Twitter and Instagram and Google Plus and Linkedin just look

at flipping America follow us at flipping America and if you would please just like some of the content or like the page itself and give us some feedback and remember to download the app in the app store the flipping America app and also.

The property great at both available to you for free.

There’s so much information for you on our website hope that you’ll go there frequently check out the news feeds they update 24/7 automatically all kinds of stuff there.

And

we also want you to want to invite you to come to meetup.com flipping Atlanta and join that group right there and you can be advised of our local meetings.

So we’re out of time for today thank you for tuning in.

[58:21] Music.

[58:50] Alfred a montepare said expect problems and eat them for breakfast.

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[59:17] Music.