Sarah's Blog

Upcoming Auction - Get your Dream Lot in North Carolina!

Sarah Barry (PropertyVestors) — Wed, 02 Apr 2008 03:50:02 -0500

If you are interested in an upcoming auction for our 13 remaining lots, please contact us at invest@propertyvestors.com. PropertyVestors investment group (www.PropertyVestors.com) have only 13 premium lots remaining located 30 minutes north of Wilmington, NC in an incredible community called Summerhouse on Everett Bay. Summerhouse on Everett Bay is a new coastal housing development in a gated community.

Located in Holly Ridge, North Carolina minutes from Topsail Island Beach zip code 28445. This development features wonderful amenities such as 7 inland lakes, located on the intra-coastal waterway, clubhouse and swimming pool, walking trails and boardwalks, shell castle beach, Caroline and Everett Parks. The development is located between historic Wilmington, NC and Jacksonville, NC.

Proposed amenities at Summerhouse include:

· Community is 100% gated and private with no access granted to the public • Olympic sized pool with over $1,500,000 in water falls, tiers & sprinklers • $10 million dollar clubhouse - conference rooms, cocktail bar, decks & patios • 8+ miles of boardwalk and catwalks • Dozens of parks, gazebos and grottos throughout the community • Kids Park, multiple playgrounds, and tennis courts • Day docks, boat ramps, piers on the creeks and lakes • Summerhouse is a 5 minute drive from Topsail Beach

Summerhouse home page URL http://www.summerhouseoneverettbay.com/default.cfm
Summerhouse SiteMap: http://www.summerhouseoneverettbay.com/siteplan.cfm
Summerhouse Video: http://www.summerhouseoneverettbay.com/video.cfm (MUST WATCH)
PropertyVestors Onsite Pictures and Video: http://picasaweb.google.com/PropertyVestorsGroup/SummerhousePhotos

The lots asking price are WELL BELOW THE COMPS IN THE AREA FOR BUILT IN EQUITY. FINANCING OPTIONS AVAILABLE.

Let me explain why this is such a GREAT offer. You can look up at the local county records to see that LOTS 103 and 104 were sold at $349,880. As you can see below, Lot 105 and Lot 106 which are identical lots to 103 and lot 104 are selling for half the price. IT IS A SIGNICANTS SAVINGS with built in equity.

Remaining Premium Lots:
Lot 105
Lot 106
Lot 250
Lot 545
Lot 747
Lot 519
Lot 223
Lot 608
Lot 490
Lot 27
Lot 558
Lot 498
Lot 89

If you would like to register for the upcoming auction, please contact Shawn Barry at PropertyVestors. Contact information invest@propertyvestors.com or (804) 334-8010. Call us today to find out further information.

HollyRidge, 28445
Location: North of Wilmington

Leverage the Knowledge of Professionals to Maximize Your Investing Capabilities

Sarah Barry (PropertyVestors) — Sun, 30 Mar 2008 10:37:09 -0500

"If I have seen farther than others, it is because I have stood on the shoulders of giants."
- Sir Isaac Newton

Sir Isaac Newton was a physicist, mathematician, astronomer, natural philosopher, alchemist, and theologian. He is probably best known for his work with gravity, but in addition to gravity he described the three laws of motion, invented the reflecting telescope, developed a theory of color, developed a branch of mathematics, calculus, and even invented the ridges on the edges of some coins (reeds) to hinder attempts at counterfeiting. He was clearly a brilliant mind, yet even someone of his caliber recognized the need to leverage the assistance of others. He understood the simple yet profound principle that we can make greater accomplishments with the help of others than we can on our own.

Real estate investing can be a time consuming and laborious task. You need to educate yourself on investing, the markets, contract law, taxation, real estate maintenance and repair, tenant relations, financial planning, lending guidelines...the list is endless. Then you need to find and analyze a number of projects and markets to determine where you should invest and what type of investment you should make. How can a passive investor accomplish all of these tasks while still living their daily life? The only way to be a truly successful investor and still maintain time to lead a normal life is to leverage the assistance of professionals.

If you feel the need to tackle every task yourself in real estate investing, you are destined to be overworked and underpaid, and it is likely that you will become fed up with the investing process before you have the opportunity to meet your goals. You need to surround yourself with successful professionals in specialized areas of expertise...you need a "Dream Team." You need highly trained specialists in a variety of areas, such as legal (possibly multiple attorneys), accounting/taxation, financial planning, insurance, mortgage/lending, self-directed IRA specialist, 1031 specialist, and an investment/project coordinator.

Financial Planning - A financial planner is a great team member because they have the opportunity to understand your full financial picture and your future goals. They look at the "big picture" of your investing capabilities and needs. Some accountants may double as financial planners, but there are many financial planners that specialize strictly with the planning aspect and do not spread their time and abilities between two specialties. Financial planners understand the full scope of your financial capabilities and your goals, and they create a plan to help you accomplish those goals. They do not tell you specifically what to invest in (i.e. Microsoft, a condo in Miami, etc.), but they do lay out a plan for the type of investments you should consider. Ultimately, it is up to you to decide how to utilize your money. There are different types of financial planners to consider as well. Some work for institutions that sell the institution’s products as investment tools, and others work independently and have the ability to consider and sell any type of investment tool. Be sure to understand the full capabilities of the financial planner you are working with.

Legal - Aligning yourself with at least one strong attorney is an absolute necessity. There are a tremendous amount of legal issues concerning real estate investing. Every project you are involved with will have detailed contracts, and these contracts can be very difficult to read and fully understand. It is always wise to have a trusted attorney review your contracts. In addition to something as straightforward as contracts, there are business structure concerns, estate planning, title searches, partnerships, closings, tax law, liabilities...the list goes on. Attorneys are a necessity. You may even consider multiple attorneys depending on what their specialties are, but at the very least one attorney you can consult with and trust can add tremendous value to your team and your investments.

Accountant/taxation - The two absolutes are death and taxes. I am not sure how to prepare for death, but I do know that having a trusted accountant that specializes in taxation is a must. The tax code and regulations are obscenely long. Title 26 (the IRS section) is TWENTY VOLUMES! It is clear that taxation is extremely complicated, and when you have multiple investments, perhaps in a number of states, with a variety of business entities, it can become very overwhelming and mistakes can be very costly. Leveraging the expertise of a tax specialist can save you tens of thousands of dollars per year, and help you avoid mistakes that could cost you large sums of money or worse. It is imperative that you have an expert that you can trust and count on to advise you with your investing decisions.

Insurance - Insurance is a must in today’s investing climate. Accidents and natural disasters happen, and you must protect yourself, your family, and your assets. Insurance can be a complicated topic. There are a wide variety of types of insurance and multiple insurance strategies to consider. In addition, every investment is unique, and the insurance needs will adjust from investment to investment. You need an insurance specialist that you can consult and trust to point you in the best direction regarding your insurance needs. It could be a national company with representatives across the country, or it could be a local insurance company with the capabilities of consulting on a national basis or at least pointing you in the right direction. You need to ensure that your investments are protected.

Mortgage/Lending - I have spent time in past articles discussing the tumultuous times that the mortgage industry is currently experiencing, and these times should clearly demonstrate how complicated the mortgage industry can be. It is always wise to use other people’s money to invest when you have the opportunity...this way you leverage their money to increase your investing capabilities. With that in mind, it is clear that the majority of real estate investments that you undertake will require you to obtain some form of lending, be in private or institutional lending. It is crucial that you have experts you can trust that are advising you on your lending choices. There are an amazing amount of variables to consider with regards to lending. Every investment is unique and every borrower has a unique financial picture. Your lending options can cost or save you thousands of dollars on the life of an investment. It is wise to be sure you are making the best financial decisions, and a trusted mortgage specialist can be a great guide when it is time for you to borrow money.

Self-directed IRA Specialist - Self-directed IRA’s are growing in popularity and are a great tool to use to maximize tax benefits with your real estate investments. However, they can be complicated. If you plan on using a self-directed IRA for a real estate investment, it is imperative that you educate yourself on the process and select a company that specializes in self-directed IRA’s that can lead you through the complicated process. The PropertyVestors team highly recommends considering the use of a self-directed IRA to maximize your investment, but you need to make sure you follow all of the guidelines for the investment. A self-directed IRA specialist can help you understand if your investment can qualify and guide you through the process.

1031 Specialist - A 1031 Exchange is taxation tool used to defer taxes when purchasing a like-kind property. Similar to utilizing a self-directed IRA, a 1031 specialist is not needed for every investor or every investment, but having a trusted consultant to turn to when you need them can save you time, money, and complications. A 1031 Exchange can be a very powerful tool, but there are strict guidelines that need to be met and the process can be complicated. It is imperative that you have a trusted source of information that you can count on.

Investment/project coordinator - Do you have time to research every real estate market? Once you find a strong market, do you have time to discuss projects with developers in those markets? Do you have the time and know how to analyze those projects? Do you have the contacts to find those projects? PropertyVestors specializes in doing just that. We research markets across the US to find the most promising markets. We leverage our group’s buying power and marketing presence to gain contact with developers in the strongest markets with innovative investment strategies to capitalize on today’s market trends. We do this so you do not have to. It is our goal to be your trusted source for real estate investment projects and strategies. We want you to leverage our experience and expertise so you can maximize your investing potential.

PropertyVestors is an investment group of CEOs, entrepreneurs and savvy real estate investors that are taking active steps to maximize their profits, while minimizing their risk by creating a diversified real estate portfolio. Investors are able to easily apply diversity in real estate geographically and by asset class through its various investment strategies and types of inventory.

Furthermore, PropertyVestors enables investors to capitalize on different market conditions. The strategies include conservative, private lending options; moderate with preconstruction syndication; and aggressive with partner deals in emerging markets, coastal regions and waterfront properties. With PropertyVestors, you can take advantage of a new investment model and innovative real estate strategies. PropertyVestors’ real estate strategies and ongoing education can position you build your net wealth, while minimizing risk.

For general information about PropertyVestors or its offerings, email invest@propertyvestors.com or call 1-877-90-BUYER.

About the Author

Sarah Barry is the founder of PropertyVestors (www.propertyvestors.com). PropertyVestors is a successful real estate investment group that creates above-market returns at below-market risk. Access to PropertyVestors’ three smart real estate strategies enables investors to achieve double- to triple-digit returns on their real estate investments.

Real Estate Woes & Economic Turmoil Create Great Investment Opportunities

Sarah Barry (PropertyVestors) — Wed, 27 Feb 2008 10:27:43 -0600

Great investment opportunities?! How can this be a good time to invest? Housing is in a steep decline...one of the largest declines we have seen since the Great Depression, the mortgage industry is in turmoil with record numbers of loans defaulting and going to foreclosure, the troubles in the mortgage industry are spreading to Wall Street resulting in a declining stock market and underperforming companies, the Dollar is falling, consumer spending (which is a major piece of the US economy) is declining, employment is also on the decline, the Fed seems to be slightly panicked and cutting interest rates to try to spur the economy and stop a recession/inflation, economic analysts cannot agree about the current state of the economy or the proper steps to take to improve it, talk of a recession and inflation are becoming more prevalent. How can this be good news for investing? It is difficult to believe that now is a good time to invest in anything when you focus on all of the negative economic news, but in reality, such drastic changes in such short periods of time are creating one of the best times to invest, and real estate is one of today's best investments. I know it can be difficult to believe, but it is true.

In order to gain a full perspective of the current investment climate, it is necessary to take a step back and analyze the ingredients that have combined to create the current economic and investment position. There are two catalysts that have sparked the current economic situation; the housing market and the credit crisis. For five to ten years, depending on the area of the country and who you talk to, the real estate market was booming. Home appreciation was at an all time high, and consumers (end users and investors) were taking full advantage of the opportunities these high price points offered. Prices were rising quickly, and real estate seemed like a great way to create a quick profit. Profits from home appreciation became added income for most consumers, and this added income brought with it a false sense of security. The great appreciation and large profits in the real estate industry, for consumers and all professions associated with real estate, fueled the US economy. The problem was that this sharp rise could not be sustained. Eventually a correction would be needed to level off the market. At the height of the real estate boom, the median price of a home was 45% higher than the median US income! Home prices exceeded the consumers' ability to purchase. The market was clearly out of line, and what we are witnessing today is the correction that is bringing many economic variables back in line with one another.

It was not only the high cost of housing that created the real estate decline, but also an oversupply of housing on the market. Consumers were not the only segment that saw an opportunity to profit from the housing boom; investors and builders also saw the opportunity to create large profits from the boom. The flood of real estate investors and builders into the market created an oversupply of product. More homes were being built then could be consumed by end users. Investors and builders helped drive prices up because they added to the demand in the market to purchase housing, but again, this growth could not be sustained. Eventually the growth would outpace itself. While home owners (end users) are emotionally and physically tied to their homes because they need a place to live, investors are not. When the correction began and home prices started to level off and decline and the oversupply of homes in various markets became evident, investors were the first ones to walk away from their investments. In addition, builders who had been steadily growing for years were now faced with an oversupply of inventory, and their reaction was to abandon projects or drastically reduce pricing. So as investors and builders aided the growth of the boom, they are also having a negative effect on the decline.

As if the combination of those variables was not enough, the credit environment in the US played a large role in the housing decline and our current economic position. The personal savings rate in the US is very low. The US currently has a per capita savings rate of 4%, which is less than half its average from 1970-1994. And as low as 4% seems, that 4% is up from 0% in the late 1990's! This demonstrates the affect that the increase in housing had on the US consumer. Consumers saw large profits from appreciating housing and adjusted their focus from saving to spending. This led to a period of high consumption, and since consumer spending is a large part of the US economy, the high consumption, and ultimately the appreciating housing market, fueled the economy.

At the same time consumers' focus shifted to spending, the mortgage industry began to adjust to take full advantage of the housing boom, and debt became easily accessible. During this real estate frenzy the mortgage industry saw the opportunity for large profits from a booming market and loosened its guidelines to qualify for mortgages to make home ownership more accessible to consumers, prolong the rise in prices, and ultimately create larger profits. In hindsight, the methods the mortgage industry adopted are very questionable, but hindsight is always 20/20 and very few complaints were heard until it was too late. The mortgage industry began to make heavy use of Adjustable Rate Mortgages (ARM's) and increased lending options to Subprime borrowers. ARM's are dangerous because low initial interest rates are replaced with higher interest rates within a few years. If a borrower is barely making payments at the initial rate, then increased rates will clearly be a problem. In addition, these ARM's were being offered to Subprime borrowers who are by definition less credit worthy and typically less savvy when it comes to finances. As a result of the housing boom and the readily available debt, US citizens felt comfortable taking on debt and spending the money they had. The focus on savings was replaced by a focus on spending and easily attainable debt. In a rising market that cannot be sustained, this is a very dangerous combination.

The combination of all of these variables has led to the economic corrections we are experiencing today. Housing prices rose to unsustainable levels, housing supply outpaced demand in many markets (Las Vegas, Florida, California, etc.), the mortgage industry adopted questionable policies which made debt easily attainable, and consumers shifted from saving to spending. The convergence of these variables has led to difficult times for the US economy. This market downturn has caused repercussions that are rippling through the entire US economy. As the real estate market declined, some investors and end users found themselves in negative equity positions on their homes, and to further aggravate the situation, ARM's began to adjust and home owners realized they could not afford their adjusted interest rates. Delinquencies, and ultimately foreclosures, have increased tremendously. Markets that were oversupplied have become further oversupplied and prices are forced to decline even further. The banking industry has been forced to take back real estate and take tremendous losses. These losses have flowed to Wall Street where hedge funds and mortgage backed securities invest heavily in mortgages, and investment capital has tightened up tremendously. As the lending industry adjusts to the changes, guidelines to qualify for loans have become increasingly strict, limiting the available credit. All of these economic systems are interconnected, and as debt becomes less accessible, consumption declines, which forces declines in earnings for the economy, which drops the value of stocks, and ultimately has an adverse affect on employment. The Federal Government is making attempts to help the situation by cutting interest rates to stimulate the economy, but a recession seems likely...if it has not begun already. I will not cover the topic of a recession here, but I will note that history tends to repeat itself, and taking note of the history of the housing industry demonstrates that when housing starts have declined in the past a recession has followed. Currently, housing starts have declined, so it may be wise to be mentally prepared for a recession.

It is not a pretty picture, but there are always good investments, and drastic changes bring with them great opportunities. The trick is finding those great opportunities. As investors, what are we to do in this turbulent time? A few options are:

Keep your money in cash...save it in a bank, but make sure it is a bank that is not in trouble due to all of the current problems. This is not the best option because the return is low.,
Invest in emerging markets around the world...India, China, the Gulf region,
Invest in commodities such as oil, natural gas, or gold (By the way, gold is sky rocketing right now, but the question is where will it peak?),
And finally, the investment strategy that I feel capitalizes on the current market conditions the most is real estate.
- Prices are low and still declining...great deals can be found. Areas that may have been too pricey in the past are now affordable.
- Builders/developers and banks have inventory that they must get rid of and are willing to make deep discounts.
- Interest rates are low and the Fed keeps pushing them lower.
- The standards to qualify for a loan are very tight, forcing people to rent instead of buy, which creates higher rental rates and cash flow on rental properties.

The key to investing in real estate in such a hectic time is to educate yourself on the current market conditions, find quality investment opportunities, and act before the conditions change. PropertyVestors is here to help you accomplish these goals. In this edition of our monthly newsletter, we have highlighted four separate partners/projects that approach investing in the current market from different creative angles. Each of these strategies is designed to capitalize on the current market conditions, and because the strategies use different approaches to investing and utilize various locations, diversification of your investments remains a high priority.

Exclusive Partner Deal:
Blue Moon Capital - Turn-key Investment Model

A $5,000 down payment is all it takes to transfer ownership while Blue Moon Capital completes the rehab of your rental property for you. BMC will facilitate, manage, complete & pay up-front for property rehab of an average $35,000 Scope of Work. You will get 20% Equity in the property as a head start, based on your lender's final appraisal, along with a 12-month home warranty. Current focus is Pittsburg, Atlanta, Baltimore, Cleveland, Kansas City, and Philadelphia. Property Management companies are ready to fill your rental property. Great cash flow opportunity!

The mortgage crunch has created the perfect investor opportunity....Experts say "BUY NOW" in modest markets such as Cleveland, OH. Foreclosures are high, prices are low and the rental market is strong. Yet, high down payment requirements and tight lending standards still prevent investors from taking advantage of one of the best buying periods seen thus far. Blue Moon Capital offers a $0 down financing, turn-key investment model not seen anywhere else. Learn how Blue Moon Capital is a great source for taking advantage of the BUYERS MARKET with a creative in-house financing model that requires $0 down and only a $5,000 Investment. Please contact PropertyVestors for more information.

Select Private Lending Investments:
Richmond, VA

Due to the strict guidelines and "red tape" associated with bank financing these days, many real estate investors with great projects are turning to Private Lenders to obtain financing. The investors are able to obtain the financing quicker and easier, and the Private Lenders are able to have a great return with a secure investment. We have strong relationships with successful and established real estate businesses with strong track records. Our Spotlight for this month's newsletter is on our partner American Homes (AH). In December, a PropertyVestors member funded one of AH's projects, and you will notice a very positive quote from them in the newsletter. We currently have Private Lending opportunities open in Richmond, VA with AH, and the opportunities range from $15-$45k, offer 12% annual return, and have solid execution plans and security. Get more return than CDs, Bonds and Mutual Funds!

American Homes

Greg Butler and Brian Rhodes are owners of American Homes, and both live in Richmond, Virginia. They have been in business investing in real estate for 4 years, and they have completed over 100 real estate transactions. Greg and Brian are known for their knowledge of the industry, their expertise in specific transactions, and overall business acumen. They have been invited to speak at several real estate investment clubs, as well as a real estate negotiating class at Virginia Commonwealth University.

On average, AH currently closes 1-2 "Pretty House" deals (typically subject-to transactions, then use a lease-option exit strategy) and 3-5 "Ugly House" deals (typically selling a house that needs repairs to another investor) a month. If you are interested in private lending opportunities, please contact PropertyVestors.

Exclusive Partner Deal:
Lee Mill Heights - Emerging Market - Manhattan, KS

Manhattan, KS, also known as "the Little Apple," is a little known market with great potential. Manhattan's population is going to double in the next four years! We have partnered with a successful and well-established builder in the Manhattan market who is offering 2-4 unit buildings in a new construction development. This is a great opportunity to purchase new construction rental property in an appreciating market with strong rental rates. These properties are sold to our group at a discount creating built-in equity and potential for monthly cash flow. In addition, a management company has already agreed to manage the property for 5% of monthly rents, while the industry standard is 7-10%. The management company is available and ready to fill your property. Please contact us for more information.

Preconstruction Syndicate Investments:
BridgePoint

A preconstruction syndicate is our most exciting, cutting edge strategy. PropertyVestors works closely with BridgePoint on our "Preconstruction Syndicate" deals as they are the leader in this market space. BridgePoint has created an amazingly creative strategy to capitalize on today's market conditions, with possible returns beginning at 40%. Their strategy includes protective addendums that are key to promoting profits and minimizing risk. The addendums even protect you in a softening market!

BridgePoint has developed a proprietary strategy that grants them the unique privilege of providing developers with the means to fulfill their requirements and, in exchange, negotiate terms that transfer much of the market risk from their purchasers to the developer.

Please contact us to learn more about these strategies and upcoming projects at invest@propertyvestors.com.

Furthermore, PropertyVestors enables investors to capitalize on different market conditions. The strategies include conservative, private lending options; moderate with preconstruction syndication; and aggressive with partner deals in emerging markets, coastal regions and waterfront properties. With PropertyVestors, you can take advantage of a new investment model and innovative real estate strategies. PropertyVestors' real estate strategies and ongoing education can position you build your net wealth, while minimizing risk.

For general information about PropertyVestors or its offerings, email invest@propertyvestors.com or call 1-877-90-BUYER.

About the Author

Sarah Barry is the founder of PropertyVestors (www.propertyvestors.com). PropertyVestors is a successful real estate investment group that creates above-market returns at below-market risk. Access to PropertyVestors' three smart real estate strategies enables investors to achieve double- to triple-digit returns on their real estate investments.

Source for REO's, Non-performing, & Performing Notes

Sarah Barry (PropertyVestors) — Thu, 07 Feb 2008 13:38:28 -0600

PropertyVestors is a real estate investing group & resource for investors, wealth professionals and their clients.

As a Principal, my focus has been on selling REO & Note packages. Today’s market is muddled with non-performers on both sides of a purchase. To get to the real players I differentiate myself:

- - Authorized Direct to Source (Option #1)
I am an arm of the seller; the source owns the packages
Do not infringe on Brokers’ commission
Extremely competitive pricing

-- Custom Orders (Option #2)
We are an intermediary to eight banks. We do not shop LOI's, rather place orders with personal contacts of ours.

- - Professionalism
Integrity, Credibility, Manage Expectations, Communications

- - Process
Responsive, Easy to follow, Organized, Efficient
No un-necessary paperwork or steps
Proactive alerts to new projects

- - Value-Added Services
Scrubbed lists through our due-diligence
Source will service anything we sell
Develop exit strategy to resell product

- - Deliver Results
Source closes 5-6 transactions / month totaling $1-5B

Let me know if you are interested in existing pools or placing a custom order with us. Minimum order is $5m purchase price. Register yourself and your buyers at http://www.propertyvestors.com/contactUs.html

Regards,
Shawn Barry
804.334.8010
shawn@propertyvestors.com
www.PropertyVestors.com

New Year Brings New Opportunities

Sarah Barry (PropertyVestors) — Wed, 30 Jan 2008 14:23:45 -0600

Happy New Year. I hope you had a great holiday season and are ready for a profitable and successful 2008. As we move past 2007, it is helpful to take note of all the changes and growth that the real estate industry has witnessed. It is also helpful to begin 2008 on a positive beat…to look to the opportunities that present themselves…to find the areas of silver lining to focus on in this up coming year. So, without further ado, I will take you on a brief recap of 2007 and end with some good areas of investment.

First and foremost, 2007 made it clear to everyone involved in real estate that change is inevitable. In the U.S., Real estate had been a hands-off, safe investment for the past 5-10 years, but 2007 brought with it a tumultuous real estate market. The amazing growth and appreciation we experienced leveled off, and in some locals even declined, new construction began to decline, and one of the biggest stories of the year, in and out of real estate circles, is the mortgage industry.

The mortgage industry began a period of tremendous change in 2007. The entire landscape of the mortgage industry is changing, and we have not reached the end of this change yet. Residential mortgages and foreclosures are in a bad place, and we are beginning to see impacts in the commercial arena. Global markets are predicted to find some similar tough times. In addition, it is a daily struggle to keep up with the analysts calling for recession, inflation, and questions around the Fed’s policies and rate actions. (I have written about these changes on a few occasions; so rather than discussing the changes again, I will point out that if you are interested in learning more about the tumultuous times for the mortgage industry and real estate market during 2007, please refer to my blog at http://propertyvestorsblog.blogspot.com/.)

So now it is 2008. What can we expect? What can we do? Where should we invest? Well, change is going to continue to happen. Just as if we encounter a detour on a drive to our favorite restaurant we would change our path; it is time for real estate investors to examine the detour and change our path. For some, it will mean stopping for a time…and that is okay; just be sure that where you are invested today can hold out for the market to turn around…as it will. For others, it will be finding an even better and faster path. This is exciting because you are able to leverage the silver lining in the gray clouds – to make the lemonade out of the lemons if you will. Now, to where we can find this path.

At PropertyVestors, we continually evaluate our strategy and path. Today we see the best investments to come in a few categories

REOs and Non-Performing Notes

Private Lending

Preconstruction Syndicate

Emerging Markets

REOs and Non-Performing Notes

One of the largest trends that we are working with is the emerging opportunity that REO’s and non-performing notes (loans) bring to the real estate market as a result of the dismay that the sub-prime mortgage industry and large-scale foreclosures are creating. This is a great trend to take notice of, and one that can be very profitable. This opportunity does require more investment than others, and can be either active or passive depending on your exit strategy. (I have touched on this in great detail in previous articles, so please reference my blog at http://propertyvestorsblog.blogspot.com/ for more information.)

Private Lending

As working with Banks becomes increasingly difficult and labor intensive, buyers and investors look to private lending to continue to work in this profitable market. In exchange for less red tape and quicker turn around, investors will pay private lenders higher returns with great security. This has always been an investment strategy for PropertyVestors. In today’s lending environment, it is even stronger! In February’s Newsletter we will spotlight one of our favorite Private Lending Partners and opportunities at hand. (I have touched on this in great detail in previous articles, so please reference my blog at http://propertyvestorsblog.blogspot.com/ for more information.)

Preconstruction Syndicate

To refresh your memory, our Preconstruction Syndicate Strategy allows for investment into luxury developments with preferential contractual addendums to promote return and minimize risk . Our investments aid the Developer in funding. Just as residential market looks to private lending, developers look to the syndicate model as a way to alleviate institutional headaches and are willing to give more away in the form of increased return and more risk mitigation. On February 7^th, our Partner will be holding an educational and project overview webinar that you shouldn’t miss. We will report on the event in our February Newsletter.

Emerging Markets

While the Real Estate industry as a whole across the US has flattened, specific locals have dropped while others have actually shown growth. These growth markets are considered Emerging Markets. They are places where population is increasing, where the number of new jobs is rising , where there are environmental and governmental incentives. These Emerging Markets see appreciation in the wake of the other mess. In addition, the mortgage industry issues and tightening of bank regulations continue to create hurdles for people to buy, so the rental market is growing as well. Appreciation, growing rental market…sounds like a good place to invest!

I want to take this opportunity to point out two markets that prove that there are still strong real estate markets in the U.S., and within these markets there are opportunities being created by the changing investment climate. In an effort to avoid repetitive information, I will keep my explanation of these markets brief, and in place of my detailed explanation I will offer links to various articles and reports that discuss these emerging markets. I want to demonstrate that although the bulk of the media is reporting negative news around real estate these days, there are quality sources of information that can be found if time and effort is put into researching opportunities. In addition, I do not want you to take my word for it; I want you to see additional credible sources discussing the positive opportunities that are still available in real estate.

Charlotte, NC

The first market I will focus on is Charlotte, NC. At first thought, Charlotte may seem like a sleepy southern city to some of you, but this could not be further from reality. Charlotte is a market that is gaining a tremendous amount of attention, and for good reason. First of all, Charlotte is the second largest city for banking in the U.S.; second only to New York City! Both Bank of America and Wachovia tout Charlotte as their headquarters and home city. In addition to such a strong business base, Charlotte is in a key location. It is in the middle of North Carolina, major state/interstate highways pass through Charlotte, it has a very comfortable southern climate, the gorgeous North Carolina mountains are a couple hours to the West, and great North and South Carolina beaches a few hours to the East. The city itself is full of old southern charm, quaint historical homes, and an abundance of tree-lined streets, and flowering bushes and trees that bloom from March through October.

From a real estate perspective, Charlotte avoided the large price increases of the real estate boom that were seen across the country. Charlotte has maintained steady growth for years on end, but it has not seen any large jumps…until now. Over the past couple years, Charlotte has garnered increased national attention, and with that increased attention has come an influx of motivated buyers and investors. Charlotte is now poised for great growth, especially compared to the stagnate or declining markets around the country. The strongest aspect of this continued and impending growth is the fact that the appreciation and growth that Charlotte’s real estate market, and the city as a whole, is experiencing is based on solid job/population growth trends. One of the most, if not the most, important factor to consider about emerging real estate markets is the job/population growth that is taking place in that market. Real estate is subject to supply and demand; so as the demand rises, supply falls, and prices in turn rise. When job growth is strong in any real estate market people and businesses will be attracted to that market and as a result demand and prices will rise. The City of Charlotte is taking the right steps to welcome businesses and develop the city to attract business and the inevitable influx of people that come with those businesses. One example of the quality planning and growth that the city is executing is the new Light Rail system that was opened for the first time in November 2007. Charlotte is one of the strongest real estate markets in the country, but please do not take my word for it. Below are a number of links that support my opinions and offer great information about the Charlotte market.

10/11/2007 – “An Introduction to Charlotte, NC” - http://www.associatedcontent.com/article/410318/an_introduction_to_charlotte_north.html

12/26/2007 – Charlotte Observer - “Charlotte is One of Three Places Where Home Values are Up” - http://www.charlotte.com/109/story/420456.html

11/13/2007 – Forbes – “America’s Undervalued Real Estate Markets” - http://www.forbes.com/lifestyle/2007/11/13/undervalued-markets-housing-forbeslife-cx_mw_1113value.html

6/12/2007 – ABC News (Nightline) – “In a Yearlong Housing Downslide, Charlotte Keeps Getting Better” - http://www.owncharlottehomes.com/wp-content/nightline.html

5/14/2007 – Investment News – “Local Hot Spots Boost Real Estate Market” - http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20070514/FREE/70514012/1015/TOC&ht=local%20hot%20spots%20boos%20real%20estate%20market%20local%20hot%20spots%20boos%20real%20estate%20market%20local%20hot%20spots%20boos%20real%20estate%20market%20charles%20paikert

5/9/2007 – Wall Street Journal – “Where Home Prices are Hot Now” - http://www.owncharlottehomes.com/wp-content/wsjarticle.html

Forbes list of top 10 U.S. real estate markets - http://www.forbes.com/2007/11/21/housing-best-nationwide-forbeslife-cx_mw_1121realestatebest_slide_2.html?thisSpeed=20000

Links to articles about Charlotte’s new Light Rail system - http://www.lightrailnow.org/facts/fa_lrt_cha.htm

11/20/2007 – Real Estate Blog mentioning the positive growth in Charlotte - http://www.zillowblog.com/when-it-rains-it-pours/2007/11/

Charlotte Chamber of Commerce - http://www.charlottechamber.com/

Manhattan, KS

The second market I would like to focus on is one that is off the radar for most investors and national media sources. Unlike Charlotte, which is gaining tremendous national attention, Manhattan, Kansas (“The Little Apple”) is in the beginning stages of its growth and has not warranted large scale attention…yet. There is great growth potential in Manhattan, and locating a strong emerging market before national attention is being paid to it offers great opportunity for a solid, long-term real estate investment. Manhattan may not have all of the amenities and Southern charm that Charlotte offers, but it does offer the most important factor, job/population growth. Manhattan is expected to double its population over the next four years! – from 49,000 to just under 100,000. Fort Riley military base is located in Manhattan, and from now through 1012 the base is experiencing a large expansion. This expansion creates military family housing demand well into 2012, and major economic and job growth over the next four years and beyond. The US Army expects 40,000+ troops/personnel/dependents to arrive in Manhattan from now through 2012.

In addition to this large and expanding military base, Manhattan is a classic college town where Kansas State University is located. The University brings with it a population of 23,000 students from all 50 states, many of which require rental housing. The growth for this market is tremendous, and best of all, the population explosion is well planned by the US government and therefore much more dependable then most emerging markets. Please find related links below.

Manhattan Chamber of Commerce - http://www.manhattan.org/
Manhattan Homepage - http://www.ci.manhattan.ks.us/
CNNMoney.com – “Best Places to Retire Young” - http://money.cnn.com/galleries/2007/moneymag/0703/gallery.bp_retireyoung_new.moneymag/9.html
Strategic Action Plan and Growth Impact Assessment - http://www.manhattaned.org/DocumentView.asp?DID=291
Downtown Redevelopment Project - http://www.fs-bd.com/files/Downtown.pdf
The August edition of the Fort Riley Community Update - http://www.ci.manhattan.ks.us/archives/68/August%2007%20newsletter.pdf - states that 3000 troops will be deployed from the base in the coming month, but that large numbers of troops will return to Fort Riley next summer.

The report goes on to say: 'But our astute observers report - our local schools are still filling up, and all the housing under $140K is being bought up very quickly. What's going on? Well, the truth is that a good portion of Families will remain on Fort Riley even after the soldiers deploy. The last time we checked, about 70% of our Families choose to remain on Fort Riley when their Soldier deploys.

When community and Fort Riley support is perceived being strong, more Families choose to stay right here. Our leaders certainly want that, because we can take better care of Families when they are here.' In his address to Congress on Friday, President Bush announced that reductions in US troop levels in Iraq would start seven months sooner than scheduled, with 5700 forces to be home by Christmas instead of in the spring.

Earlier in the week it was announced that four brigades (at least 21,500 troops) will return by July 2008. These facts support the prediction of a significant increase in the demand for housing in the Fort Riley area next summer.

Profiting from REO's & Discounted Notes

Sarah Barry (PropertyVestors) — Fri, 07 Dec 2007 18:32:39 -0600

"A market is the combined behavior of thousands of people responding to information, misinformation and whim." -Kenneth Chang

I think this particular quote fits very well with the current real estate investment climate. The U.S. housing market and mortgage industry are currently undergoing tremendous changes, and these changes are the result of millions (instead of thousands) of people and businesses trying to react to information, misinformation, and whims. Understanding any market, the U.S. real estate market in particular, is not an exact science. It is impossible to make exact predictions. Despite what all of the "experts" want you to believe, no one has all of the answers.

As dedicated real estate investors, we need to do our best to decipher between the true information and the misinformation pouring out of media sources. It is our challenge to gather accurate information and discover the trends that the multitude of change is creating. In order to be successful investors during a time of such great change, we need to cultivate accurate information, avoid misinformation, and do our best to be knowledgeable and well-prepared so we can avoid acting on a whim. The changes in the real estate industry are creating trends, and the successful investors will realize these trends and capitalize while the timing is right. As the mortgage industry continues its tumultuous behavior, secondary markets are evolving. Here is one to keep an eye on.

History/Overview
REO's
Real estate owned or REO is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank (negative equity): the minimum bid in most foreclosure auctions equals the outstanding loan amount, the accrued interest and any fees associated with the foreclosure sale.

After an unsuccessful auction, the bank will go through the process of trying to sell the property on its own. It will remove some of the liens and other expenses on the home and try to resell it to the public, either through future auctions or direct marketing through a realtor. REO properties may be poor shape in terms of repairs and maintenance; however, real estate investors will often go after these properties as banks are not in the business of owning homes and so, in some cases, the low price can more than compensate for the condition of the property. REO's can be found at local auctions, through realtors, and often banks will group a number of homes together, locally or nationally, and sell an "REO pool" to high net worth investors or groups of investors. Buying in bulk can often create even deeper discounts.

Mortgage Notes
A note is a legal document that obligates a borrower to repay a loan at a specified interest rate during a specified period of time or on demand; sometimes also referred to as promissory notes or mortgages. Notes can be associated with just about anything that can be bought and sold - houses, mobile homes, land, cars, boats, condos, consumer electronics, rare books, coins, stamps, antiques, home improvements...the list is almost endless. For our purposes, we will focus on notes attached to real estate, generally referred to as mortgage notes.

A mortgage note is the promissory note associated with a mortgage loan; it is a written promise to repay a specified sum of money plus interest at a specified rate. While the mortgage itself pledges the title to real property as security for a loan, the mortgage note states the amount of debt and the rate of interest, and makes the borrower who signs the note personally responsible for repayment.

Selling notes is a regular market activity that is not new today but that has increased in this market. Securitization, or selling notes, happens for several reasons, including:

· To raise cash.

· For servicing - some individuals/companies create notes, but do not have servicing capabilities.

· Specialized servicing - some individuals/companies are only set up to service performing notes; when a note is non-performing, the note is sold to mitigate risk; there are specific companies specialized in servicing the non-performing notes, with the specific goal in curing them back to performing.

· To mitigate risk - individual/companies are comfortable with certain mix of loans on their books. When this mix is not representative in the loan portfolio, segments of the portfolio are sold to get the total back within bounds.

Notes have a FACE VALUE (the unpaid principal), an INTEREST RATE at which the note is being paid and a TERM (the amount of time left before it is paid off). Buying, selling and trading notes have become big business, and many investors are creating great wealth with this strategy. Due to the "time value" of money which assumes a dollar today is worth more than a dollar at some future time, notes are sold at discounted rates- usually at 60-75 cents on the dollar. In today's tumultuous market, though, these discounts are even deeper! Like bonds, mortgage notes offer investors a stream of payments over a period of time. When notes are purchased at a discounted rate due to the time value of money, there is built in equity created immediately, and to improve upon this position even further, every month payments will be made to the owner of that note...creating a monthly cashflow, with no hands-on effort!

REO's and Mortgage Notes Today
The trauma of foreclosure or impending foreclosure has hit home for nearly 1.4 million homeowners so far this year, maintaining the nearly 91% year to date increase versus the last year. That is according to the latest numbers from California-based Foreclosures.com.

Let me share some more statistics....

For the month of October, nationwide 54,418 REO filings were reported to Foreclosures.com - up nearly 24% over the 43,941 September filings. A total of 128,019 pre-foreclosure filings were reported for October - up nearly 31% over 97,984 September's filings.

In September both nationwide REO filings (43,941 versus 55,952) and pre-foreclosures filings (97,984 versus 117,694) were down over August (16.75% and 21.47% respectively). When you average September and October filings, you find that pre-foreclosure filings have actually leveled off (down 4%) since August (113,001 current versus 117,694 August) and REO's have actually dropped significantly (down 12%) from the high August filings (49,179 current versus 55,952 August).

These types of statistics are the basis of the information and misinformation that we weed through each day. We also hear about fault and blame, CEOs stepping down and companies folding. Bottom line is...these are grim numbers for the hundreds of thousands of homeowners trapped by rising mortgage payments, stagnant home prices, and tightened credit markets. And it is expected to get worse before it gets better.

With that said, the impact of the sub-prime mortgage industry is unclear, and the secondary discounted notes and REO market is evolving. Typical buyers are not buying as they have in the past. The large number of foreclosure filings (i.e. REO's) taken in conjunction with the instability in the mortgage industry leads to a situation where banks/lenders are overwhelmed with the amount of REO's and non-performing mortgage notes (i.e. mortgages headed to foreclosure) that they must deal with. When a market goes through such sudden and drastic changes, there are always deals to be found for savvy investors. REO's and non-performing notes are where many investors are finding great opportunities. Homes and mortgages are being sold for pennies on the dollar. Some are being sold for as low as 30 cents on the dollar, but the average for wholesalers is somewhere between 40 and 65 cents on the dollar. This means that if a home or mortgage is worth $100,000, lenders are selling them for around $50,000...clearly a good deal, even if the market has declined a bit.

Who invests in REO's and mortgage notes and how do they do it?
REO and Mortgage Note buyers are companies or investors with the experience and capital to purchase product and manage or dispose of that product through established systems and channels. If someone is holding a private mortgage, these investors will give cash and take over receiving the monthly payments that were being paid to the previous owner. A Mortgage Note for these investors are home loans or mortgages that are secured by real estate. Mortgage notes could be anything from $10,000 to millions of dollars. Investors in REO's purchase foreclosed homes from the bank for 40-65 cents on the dollar, and they can then rehabilate the property and sell it at market value or dispose of the property quicker by passing on savings to a local investor to rehabilitate and sell at market value. Anyone can be a mortgage note or REO buyer, but there are hurdles to overcome.

Barriers to Entry
Notes are not cheap. They cost thousands, often tens of thousands, or even millions of dollars. Most note and REO brokers, companies who sell notes and REO's, will only offer their product in "bundles"; meaning that in order to have access to the discounts, you must purchase a large group of notes and/or REO's. Clearly this takes a great deal of capital. Mistakes can be very costly. The problems for a newcomer are obvious. Unless you have piles of cash, how do you start? How do you become experienced without making a mistake that could cost you dearly?

PropertyVestors Approach
Finding discounted notes and REO's can be quite labor intensive. In many cases, it may be wise to be a part of a group that purchases these products. You then have access to the knowledge of the group, you can get larger discounts because the group can buy in bulk (buying power), your investment is spread across multiple notes or REO's (diversification), and you will have the assistance of the group to service the notes and sell the REO's.

PropertyVestors is an international real estate investment group that offers a discounted Notes/REO Program. After researching the various ways to approach note and REO buying PropertyVestors established a partnership with a top performing purchaser and servicing arm in order to minimize risk and maximize returns for our purchasers. We investigated only companies that had been purchasing these bulk orders for over 20 years with a strong track record. Special to our relationship is the focus on curing notes; we want to be part of the sub-prime mortgage solution, and do not sell to those interested in foreclosing as a process. In addition, curing and refinancing is the way to maximize returns. So, it is a win-win proposition. Our depth of buyers and competence in this industry has given our buyers a tremendous opportunity to take advantage of today's real estate market.

Process
1. Visit www.PropertVestors.com to research our investment group further, get access to our free report "Capitalizing on Real Estate in Today's Economy", and join as a Member to get access to profitable opportunities.
2. Investor completes a non-disclosure, non-compete document to gain access to the details of the bulk pool.
3. Once the pool has been reviewed and approved, proof of funds and a letter of intent is signed by the investor.
4. Investor is notified of the next pool in their price range.
5. Investor opens escrow account. (No money is taken from escrow until settlement. If settlement does not occur, escrow is returned)
6. Investor receives pool information (mortgage notes, deeds, etc.) and conducts their own due diligence.
7. Contracts executed, settlement completed and funding occurs.

Build a Discounted Note and REO Fortune with Smart Strategies from PropertyVestors
PropertyVestors is an investment group of CEOs, entrepreneurs and savvy real estate investors that are taking active steps to maximize their profits, while minimizing their risk by creating a diversified real estate portfolio. Investors are able to easily apply diversity in real estate geographically and by asset class through its various investment strategies and types of inventory.

Furthermore, PropertyVestors enables investors to capitalize on different market conditions. The strategies include conservative, private lending options; moderate with preconstruction syndication; and aggressive with partner deals in emerging markets, coastal regions and waterfront properties. With PropertyVestors, you can take advantage of a new investment model and innovative real estate strategies. PropertyVestors' real estate strategies and ongoing education can position you build your net wealth, while minimizing risk.

For general information about PropertyVestors or its offerings, email invest@propertyvestors.com or call 1-877-90-BUYER.

About The Author
Sarah Barry is the founder of PropertyVestors (www.PropertyVestors.com). PropertyVestors is a successful real estate investment group that creates above-market returns at below-market risk. Access to PropertyVestors' three smart real estate strategies enables investors to achieve double to triple digit returns on their real estate investments.

Take Advantage of Housing & Credit Woes

Sarah Barry (PropertyVestors) — Thu, 08 Nov 2007 13:40:13 -0600

Real estate investing is a dynamic practice. Change is inevitable. In the October issue of InvestingSherpa we discussed the myriad of changes that are taking place in the U.S. housing market and mortgage industry right now. It is the challenge of every investor to understand these changes, and adjust their investment strategy to work within the new framework that is being created. We need to recognize trends as they form, and determine how we can leverage these trends to improve our investing strategies.

Be a Part of the Know! - Private Lending

As the U.S. housing market continues to decline, and as credit becomes increasingly difficult to attain, new investment trends are developing. One of the largest and most profitable trends developing today is the concept of Private Lending. This is not a brand new trend, but the participation in Private Lending opportunities is increasing tremendously. Private Lending opportunities are direct loan investments to established, active, hands-on real estate individuals and companies; these opportunities are not offered to the general public. In other words, you need to "be in the know" to have access to these investment opportunities. In the real estate arena, Private Lending is used for just about any type of project - private funds could be raised to conduct activities ranging from land developments, foreclosure purchases, rehabs, rental or retail home construction, discounted notes, to any other type of real estate activity. Private Lending can also be utilized for just about any size project - from a single family rehab and flip to multi-million dollar deals. With this type of investment, you are lending funds to the individual or company that is controlling the project and not investing in the real estate itself. This is a passive approach to real estate investing that can prove to be very lucrative for the investors and the project manager.

One of the first steps with real estate investing is to determine if you desire to be an active participant in your investments, or if you want to take on more of a passive role. Do you want to own the real property, organize repairs and maintenance, deal with tenants, etc., or do you want to help fund projects that others are doing? Both strategies have their pros and cons, and PropertyVestors offers opportunities for both types of investors.

Today's market is creating good opportunities for active investors using strategies such as:

•1. Buying unique, one-of-a-kind properties that makes sense in any market;

•2. Picking up properties at very low prices in absolute great markets that are sure to return;

•3. Participating with builders in creating model homes or unique rentals in a great area.

However, a growing number of investors are trying to ride out the present real estate decline with their current holdings and are only interested in investing funds in other projects rather than taking on more real property as assets. And, a lot of active investment opportunities fall outside of the capabilities of individual investors. This is an ideal opportunity to become a passive investor and take advantage of the growing number of available Private Lending opportunities. Private Lending is a great way to pool resources with other investors to take advantage of opportunities that may be out of your investment scope. It can be as simple as forming an LLC with other investors and investing in a project as one entity. When the right project becomes available, PropertyVestors can help you organize this process.

Why are Profitable Private Lending Opportunities Available?

Very simple..... Builders, land developers, rehab specialists, foreclosure specialists, etc, all have access to more deals than their capital or credit can handle. In today's market, there are some very good deals out there for those with capital, credit, and time. One of the major difficulties for those "in the know" is that even though they may be very solid financially, they do not have enough capital to finance every good project they come across, nor will lenders let them do more than a couple projects at a time; especially now that lending qualifications are tightening up. Private Lending allows active investors to find funding for their projects from passive investors, and in most cases interest rates are higher then you can find elsewhere and the investment is secured by the real estate.

For example, PropertyVestors recently funded a development in West Virginia with $2.4 million from a small group of investors. This investment is returning 20% annually over two years and is secured by the land itself and a government bond. The developer did not want to find the funding through traditional lending, and this approach allowed them to avoid all of the bureaucracy and red-tape of the traditional lenders. The developer is paying a slightly higher interest rate, but the ease and flexibility of the transaction more then makes up for that higher rate. For many Private Lending opportunities, investors can even consider using IRA funds for the investment and get tax deferred returns. The difficult part is that you need to have access to these opportunities, and in many of cases, you must qualify to be a part of the investment.

Fundamentals of Private Lending

In most real estate investments, you are purchasing a piece of real estate and will end up holding title to that real property. In the case of a Private Lending, you are providing capital to companies that own the real property. You are providing the capital to purchase and/or make improvements to the real property, but you do not have ownership in the property. Most of the time, the security in these investments is still the real property, but you do not have any ownership rights. The security could also be other assets, monetary vehicle (such as government bonds), or personal guarantees.

Because of this difference, the laws governing the investment are different. In more traditional real estate purchases, you are governed by real estate laws, and for Private Lending, you are governed by securities laws that are under the jurisdiction of the SEC. Because of this difference, the way such investments are marketed is also different. For a traditional real estate investment like a condo on the beach, you might see billboards, glossy flyers, and every broker in town promoting. In the case of Private Lending, you will not see it marketed publicly. Private Lending opportunities are handled privately among individuals having pre-existing relationships (a closed network). Without going into extensive detail about the SEC and their requirements, one of the most stringent requirements to qualify for many Private Lending opportunities is not only to have access to the projects through a closed network of investors, but also have significant investment capital and/or experience. Although not in all cases, many Private Lending opportunities will require you to be an accredited investor.

What is it?: Accredited investor is a term defined by various securities laws that delineates investors permitted to invest in certain types of higher risk investments (including real estate), limited partnerships, hedge funds and angel investor networks. The term generally includes wealthy individuals and organizations such as a corporation, endowment or retirement plans. For our purposes, we will focus on individuals rather then organizations.

In the United States, for an individual to be considered an accredited investor, he must have a net worth of at least one million US dollars or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year. This rule came into effect in 1933 by way of the Securities Act of 1933.

The exact definition comes from the federal securities laws, Rule 501 of Regulation D , and is as follows:

A natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase;
A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.

Why?: The SEC has established criteria for preventing people who perhaps need more investing experience from investing in unregistered securities and/or real estate opportunities that are less well known than stocks and bonds. The idea is that the SEC is trying to protect investors that lack the needed investing experience and/or disposable capital to get involved in higher risk investments. There are some assumptions that go along with being an accredited investor. An investor who meets the foregoing standards is considered an accredited investor, and should also meet at least one of the following criteria:

A) The accredited investor or his professional advisor can be reasonably assumed to have the capacity to protect his own interests in connection with the transaction by reason of his business experience or the business or financial experience of his advisor.

B) The accredited investor can reasonably be assumed to be capable of bearing the economic risk and can reasonably be assumed to not require immediate liquidity pursuant to his investment in the project.

C) The accredited investor can reasonably be assumed to have net worth adequate so as investment in the project does not exceed ten percent of the investor's net worth.

Benefits of meeting these standards:

If you fit into this category you may be eligible for many investment opportunities that other investors are not allowed to participate in.
The key is that many higher risk, and thus higher reward, investments are only available to qualified "accredited investors."
The main benefit to qualifying is that you gain access to investments, and greater returns, that "average" investors can not access.
Quite simply, it comes down to convenience and privacy for the investment managers. By marketing investments only to accredited investors, a fund or company can avoid many of the filing requirements to which most public companies are subjected.

Utilize Self-Directed IRA's to Increase Profits with Private Lending

In the September issue of InvestingSherpa, we introduced Self-Directed IRA's as one of the most powerful and under-utilized investment tools available today. Self-Directed IRA's are gaining notoriety, and more and more people are using their IRA funds to invest in partnerships, franchises, mortgages and real estate. At the same time, the investment tool is not widely known or used; only 4% of all IRA's are categorized as Self-Directed. A tremendous amount of wealth is held in retirement accounts, yet only 4% of these accounts allow the investor to direct the investments! The tools are available that allow you to take control of your investments and your savings for retirement. Diversification is key with any investment strategy, and this diversification does not mean just diversified stocks, but also diversified with real estate. It is time to take control of your investment strategies and your retirement. A Self-Directed retirement account will give you more control and more options with your money.

Federal Reserve Chairman Ben Bernanke attributes much of today's housing slump to the recent rise in mortgage rates. Rising numbers of mortgage defaults and mounting foreclosures are key factors that have forced many lenders to increase their rates, cancel promised loans, and even go out of business. Many would-be home buyers have discovered that credit is increasingly hard to come by.

The housing slump is not bad news for all, however. A growing number of investors are taking advantage of the ailing lending market to expand their own investment portfolio through Private Lending. By providing cash leverage at better credit rates or through less-stringent loan qualification requirements, private individuals are filling the gap created by skittish mortgage companies.

Once the domain of the wealthy elite, Private Lending has been discovered by those with a moderate amount of funds in their IRAs and 401(k)s. Thanks to the Employee Retirement Income Security Act of 1974 (ERISA), retirement account holders can "self-direct" their funds into a wide variety of investments, including Private Lending. These self-directed accounts enable investors to diversify their portfolio into potentially more secure and lucrative areas outside the volatile stock market.

At PropertyVestors we have been seeing a tremendous increase in Private Lending. Our investors are finding self-directed retirement accounts a lucrative way to invest in safe opportunities while still obtaining double digit returns. With the flexibility self-directed retirement accounts provide, investors can take immediate advantage of market trends, such as the one we are currently experiencing.

Some private lenders work directly with borrowers, while others work through mortgage brokers or real estate companies eager to move properties. Many private lenders looking for investment opportunities check out websites like Prosper.com, an online community of lenders and borrowers that works similarly to eBay. Although Prosper is still in its infancy stage, PropertyVestors does have a group created to take advantage of this growing trend. Most of our Private Lending at this point is done through traditional promissory notes. In addition to funding a development in West Virginia, we are actively funding projects in Charlotte, NC and Richmond, VA with organizations that have a successful business model in place.

Despite current economic ills, Private Lending offers the promise of excellent investment returns today and the potential for even more profitable opportunities in the future.

Use Private Lending to Grow Your Net Wealth with Smart Strategies from PropertyVestors

Furthermore, PropertyVestors enables investors to capitalize on different market conditions. The strategies include conservative, Private Lending options; moderate with preconstruction syndication; and aggressive with developer deals in emerging markets, coastal regions and waterfront properties.

With PropertyVestors, you can take advantage of a new investment model and innovative real estate strategies. Education is also provided on how to take advantage of 1031 exchanges. PropertyVestors' real estate strategies and ongoing education can position you build your net wealth, while minimizing risk.

To learn more about these topics, visit www.propertyvestors.com, sign up with the investment group by becoming a FREE Basic Member and receive our eBook: "Capitalizing on Real Estate in Today's Economy" and the monthly newsletter "InvestingSherpa." For general information about PropertyVestors or its offerings, email invest@propertyvestors.com or call 1-877-90-BUYER.

About The Author

Sarah Barry is the founder of PropertyVestors (http://www.propertyvestors.com/). PropertyVestors is a successful real estate investment group that creates above-market returns at below-market risk. Access to PropertyVestors' three smart real estate strategies enables investors to achieve double to triple digit returns on their real estate investments.

Housing Industry & Mortgage Woes - How Woeful?

Sarah Barry (PropertyVestors) — Thu, 18 Oct 2007 10:40:59 -0500

Housing Industry & Mortgage Woes - How Woeful?

Housing Slump, Credit Crunch, Subprime Mess, Record Foreclosures, Housing Bust, Credit Crisis, Mortgage Bust. These are just a few of the headlines and references I have heard over the past month or two referring to the current events taking place in the housing and mortgage industries. A quick search on Google or YouTube turns up mass quantities of information from "experts" making predictions and claiming they have been right all along. Is all of the negative press true? How do we know who to listen to and what experts are correct? I would like to offer some perspective on what is taking place in the U.S. housing market and mortgage industry.

First, please keep in mind, drama sells. In the age of 24-hour news networks with hours of airtime to fill, and the internet that is designed to give everyone a voice, even if that voice is unfettered and unedited, reality can be skewed in favor of the most dramatic scenarios. This is not to downplay the current events, but in today's news environment, we need to make sure we gain a full perspective before making judgments, and reserve some skepticism for what may be passed off as absolute truths.

The current events are big, but more importantly, they are extremely complicated. The changes taking place in the U.S. housing markets and mortgage industry have effects being felt throughout the entire U.S. economy and to some extent globally. Making absolute predictions is impossible. Factors change daily, if not hourly, and some effects are too indirect to fully understand immediately.

As investors, we need to get educated about the current events, figure out how they are going to impact investment environments, and find the investment niches that make the most sense. Changes in investment environments do not mean the end of investment opportunities; in fact, changes often mean the availability of even more lucrative opportunities.

How Did We Get Here?

This is a very complex subject, and it is difficult, if not impossible, to gain a full understanding from a brief article. The hope here is to get an overview of what is taking place, and gain as much perspective as possible so we can all continue to make educated investment decisions.

Real estate is a consumer product, and as a consumer product it is subject to the well known economic theory of supply and demand. As demand goes up, supply goes down and becomes more costly, and visa versa. For the past 5-10 years (or whatever mark you want to put on our most recent housing boom), the demand for real estate was very high, which drove prices, and as a result profits, very high as well. The high demand, and high potential for profits, drove large quantities of people into the real estate investing arena.

Home sales and rising prices have been at record highs. Some people gained wealth from primary residences or second homes (end users), and many people decided to try their luck as real estate investors. However, not all of these end users and/or investors were well qualified through experience, credit, or income to own the real estate they were purchasing.

This raises the obvious question, why would banks lend to less then qualified buyers? There is no clear and simple answer to this question, but in an attempt to simplify, markets and trends are difficult to predict, and lending institutions, like individual investors, want to gain as much as possible from lucrative trends. The rise in housing was a trend that was lucrative for a lot of people, but in the end, as markets adjust (as they always do), many investors also stand to lose, and lending institutions are no different.

Banks and lenders loosened their qualifications to allow for more subprime loans in an effort to make the most of the rise in housing prices, and to satisfy the demand from institutional investors (hedge funds, mortgage backed securities, bonds, etc. - i.e. Wall Street) that wanted to buy the mortgages that the lenders were writing. The last few years of the housing boom were spurred in large part by these subprime loans. (Subprime refers to mortgages granted to borrowers whose credit history is not sufficient to get a conventional loan at prime rates. Often these borrowers have impaired or even no credit history.) When qualifications were loosened, more home buyers were available to the market, which allowed for prices to continue to increase...i.e. more demand sends prices higher. The issue is that the U.S. economy is now feeling the effects of these less then qualified buyers.

Many factors play a role in the timing and methods in which markets, such as the U.S. housing market, adjust and change over time. One major factor to consider is the high price point of housing compared to the average income of buyers. As housing prices continued to rise year after year, a large gap began to form between the average income of U.S. citizens and the average price of housing. While prices increased and credit was easily accessible, end users and investors were not very concerned about this growing gap because funds, in the form of home loans, equity lines, or lines of credit, were easy to come by; not to mention the ease in which real estate could be bought and sold to create profits. However, as demand began to slow, and in turn rises in price began to slow, this gap became more evident and more of a concern.

As if creating a recipe for poor housing conditions, sprinkle in a few other factors, and a vicious circle is easily created. Housing prices rise and people show little concern about the fact that they may be spread a bit to thin from a financial perspective. Credit is easily accessible, so equity from these rising prices is readily available. As housing prices level off, and in some places decline, it becomes clear that the easily accessible profits from appreciation are also ending. Lending institutions become aware that housing is slowing and they too begin to adjust their practices to the changes in the market. The lenders adjust by tightening their qualifications to qualify for the lending they are offering, which in turn means less people can qualify for loans, i.e. less buyers on the market. Now we have a situation where demand is lowering and supply is rising, and the net effect is a leveling off, if not lowering, of pricing for the available supply of housing.

In addition to these changes to the housing market, another major ingredient needs to be added - Adjustable Rate Mortgages (ARM's). ARM's are mortgages that start with a low, "teaser," interest rate, and adjust to a higher interest rate after a period of time, usually 3-5 years. Towards the end of the housing boom, when lenders were loosening their qualifications to bring more buyers to the market, ARM's became a regularly used tool by lenders, especially to the subprime market. In retrospect this seems like a risky practice. Give individuals with less then stellar financial pasts loans that are complex, and appear financially manageable at first glance, but will adjust in the near future to much higher payments. During the boom many people tried to point these risks out, but money often speaks louder then words. The risks were considered and lenders chose to continue the practice; mainly because the demand for these types of loans was high from both buyers and Wall Street.

ARM's that were created towards the end of the boom are now beginning to adjust from their "teaser" interest rates to much higher rates, in turn creating payments that owners can not, or are not willing, to pay. This in turn adds an increase in foreclosures to our poor housing recipe. As markets slow, demand lessens, prices flatten or decline so equity and appreciation are lost, available credit tightens, and then rates adjust up; some owners find themselves in very tight financial positions, and even upside-down on their real estate assets.

Recall the two types of buyers mentioned above, end users and investors. End users are more inclined to fight through difficult financial times with their homes because this is where they lay their head each night. However, many end users, despite their desire to fight, can not make ends meet; especially as rates and their monthly payments drastically increase. Investors on the other hand, are the first ones to turn away from their investments when times are tough. When the housing boom was at its height, real estate investing seemed easy, almost free money, and as a result the number of investors increased dramatically. When times became tight many of these investors lost their desire to work through the difficult times. As a result of end users being incapable of affording higher monthly payments and large numbers of investors losing their will to work through difficult times, foreclosures have increased at record amounts.

The vicious circle now grows as foreclosures are added to the recipe. Markets that are already experiencing slow sales, declining prices, lower demand from buyers, are now faced with even more inventory from foreclosures. Supply increases and demand decreases. In addition, lenders, and ultimately Wall Street, who buys mortgage backed securities, are now seeing large numbers of defaults on their mortgages, which immediately affect their bottom lines - their profits. A short time ago, they could not write enough loans, and their profits were growing at a record pace; now the number of loans they are writing is drying up and the mortgages they were depending on for profits are defaulting.

As Wall Street sees these changes, they too begin to adjust to the market conditions. Funding for subprime loans dries up almost entirely. The force that was helping to spur the boom is now slowed to a halt. Lenders begin to go out of business, and as the lending and investment landscape adjusts, the effects ripple through the U.S. economy and globally. Housing slows, appreciation and equity level off, if not decline, available credit tightens, foreclosures increase, lenders and Wall Street feel the effects, the subprime industry slows incredibly, demand slows and supply increases, corporate and institutional profits are impeded, people have less cash at their disposal and credit is more difficult and more expensive, so people spend less, global investors begin to look elsewhere to invest because the U.S. economy is not growing the way it has for the past few years. This is a very simplified explanation of an amazingly complicated and inter-related process, but the idea is clear - Every aspect of the U.S. economy, and ultimately the world economy, is connected in some way, and as a major economic force such as the housing industry undergoes changes, the effects will ripple through the economy.

The complexity makes economics a very difficult science/art to fully understand, and even more difficult to accurately predict or pin point. The positive aspect of the complexity is that nothing is as clear cut as it may seem from a simplified explanation. Conditions may have seemed ideal during the housing boom - the economy was doing well, and people were creating a lot of wealth through real estate; the reality is that it could not have been ideal because we are now dealing with the backlash of that boom. In the same way, the current housing/mortgage crunch may seem serious, and many would have you believe dire, but conditions are still working themselves out, and positive aspects can and will be found.

What is Really Going On?

Armed with a general understanding of the forces that are coming together to create the current events, let's focus on some more specifics about these forces. Moody's Economy.com (a leading independent provider of economic, financial, country, and industry research designed to meet the diverse planning and information needs of businesses, governments, and professional investors worldwide) predicts that 2.5 million first mortgages will default this year, and they expect the delinquencies to peak in the summer of 2008. This is a tremendous amount of defaults, and the peak is still months away. Does this merely reinforce all of the bad news? Not necessarily.

These statistics need to be broken down a bit further. First, the worst-hit loan category will be subprime adjustable-rate mortgages (ARM's). Nationally, the core of the problem is subprime ARM's that were originated in 2005 and 2006, when lending standards became very loose. This is clearly a problem, but the problem is contained; it is not throughout the entire mortgage industry.

In fact, the prime fixed-rate mortgage market has seen almost no detioration from defaults. In addition, while the origination of ARM's has plummeted by almost 50% in the third-quarter of 2007 when compared to 2006, applications for fixed-rate loans have risen by 30% during the same period. The industry is in the process of self-regulating. These trends demonstrate that there is still ample confidence backing the lending industry, but this confidence is only available to support well-qualified loans. There is still plenty of investment capital in the industry, but this capital is being reserved for less risky investments...i.e. well-qualified applicants and fixed-rate loans. This stricter analysis of loans is reducing the availability for home purchases, refinances, and equity access, but this reduction in availability is focused mainly on the outer margins of creditworthiness, where lending has grown extensively the past few years.

In addition to the core of the problem being focused on subprime ARM's, a large concentration of defaults is focused on a small amount of states. In early September, the Mortgage Bankers Association released its second-quarter report for the three months that ended June 30 and found that most of the loan delinquencies and foreclosures were happening in seven states: Michigan, Ohio, Indiana, California, Florida, Nevada, and Arizona.

The last four states (California, Florida, Nevada, and Arizona) have high rates of ARM's. These four states are also seeing declining house prices which makes refinancing these ARM's difficult. In addition, these four states have a disproportinately high share of investor loans, which are more likely to default if the investors see the value of their investments falling because of dropping home prices.

In the first three states (Michigan, Ohio, and Indiana), the high level of deliquency and foreclosure has to do with the underlying economy. For example, Michigan lost nearly 300,000 jobs between 2001 and April 2007. To add another ingredient to the vicious cycle of our housing conditions, local economies have a tremendous effect on the value of housing in that area. In a study done by the FDIC (An independent government agency created by Congress in 1933 to maintain stability and public confidence in the nation's banking system.) looking at housing booms and busts in U.S. cities, it can be shown that the main regional instances of U.S. home price busts since 1978 are connected to fairly acute, localized economic shocks that tend to affect major employers. As a result of this localized economic shock, the most detrimental factor in the bust cities is population outflow. Jobs are lost and people leave the area. Population outflows are extremely damaging to housing markets. The demand for homes is lowered and the number of houses on the market rises - demand down and supply up. The problems of these upper Midwest industrial states clearly follow this trend.

When statistics are further analyzed, it becomes evident that it may not be time for widespread panic. We need focused efforts in the areas where the problems are concentrated.

What Can Be Done to Remedy the Situation?

There are a number of solutions that can be implemented to help the immediate problems and to prevent this type of event from occurring in the future. First, the government recognizes the issues and is taking steps to remedy the problems, while at the same time trying not to over-step their bounds. Since these issues are still so new to the economy, the remedies are still in the process of being created and implemented.

One potential remedy is to allow bankruptcy courts to modify the terms of a homeowner's mortgage loan. This is not a far stretch from current powers of the courts, which already have the power to modify payments on other secured debts, including mortgages on other properties. Responsible lenders who made loans on reasonable terms would not be effected, but predatory lenders would end up with loans they should have made in the first place.

A second governmental approach is to utilize the FHA (Fair Housing Administration) to help borrowers refinance and avoid foreclosure. The Bush administration is looking to the FHA to offer refinancing options to homeowners, including those who are not yet in default or foreclosure, but who are at risk of falling behind in their payments on mortgages that were structured to offer payments that were very low at first but then escalated. This gives the government the ability to assit those people caught in the subprime mess without advocating a financial bailout.

As recent as October 10^th, the Bush administration put forth a new initiative they are billing the Hope Now partnership. The initiative is designed to coordinate the efforts of mortgage counselors, servicers, lenders, investors, and state and local government to reach out to as many homeowners as possible to prevent foreclosures. As of October 10^th, eleven loan servicers that handle 60% of U.S. mortgages have agreed to participate in the initiative. It is expected that others will join, and have good reason to join, because minimizing foreclosures benefits lenders and investors as well as homeowners. Hope Now will conduct a national direct-mail compaign to reach at-risk borrowers, encouraging them to either call their lenders or a credit counselor to explore options to refinance or modify their existing loans.

In addition to immediate remedies, actions must be taken to prevent similar scenarios in the future. First, it must be reemphasized that not every borrower was deceived into accepting a hazardous or unsuitable loan. Many investors walked into these loans with full knowledge but chose to dismiss the risks. However, the main group that is being negatively affected by this backlash are the homeowners who chose to accept subprime ARM's, and this group should be protected from these problems in the future. Mortgages are incredibly complex transactions and borrowers typically want a helping hand to guide them. This helping hand ususally comes from the mortgage lenders that are selling them the product. Furthermore, people who turn to the subprime market for money tend to be the least sophisticated consumers, and the most easily misled.

Here are four suggestions to assist this group:

1. No more "teaser" rates: Loans should not be made unless the lender has taken reasonable steps to ensure the borrower can repay based on the real rate. Lenders should also be required to factor in homeowners insurance premiums, property taxes, and any other debts the borrower may have.

2. Limit Stated Income Loans: These loans were originally designed for self-employed individuals, but mortgage brokers began to abuse them to help people into loans that could not be afforded in the long run. Without proof of self-employment, these loans should not be used.

3. End prepayment penalties for subprime loans: For people with bad credit, prepayment penalties are often used to lock them into a loan with poor rates and terms. Prepayment penalties should not be allowed under a certain credit score. If a borrower is above that credit line, it can be assumed that the borrower understands and can guage the risks of the loan.

4. Mandatory housing counseling for subprime borrowers: Purchasing a home is one of the largest investments anyone can make. It should not be taken lightly. It should be mandatory that vulnerable buyers must be educated about the mortgage process before making such large decisions.

Current Investing Climate

The majority of the U.S. housing markets are doing okay, if not well. The mortgage industry is not in complete disarray. Real estate investments are not dead in the water. With a full perspective of what is taking place, it can be seen that caution is needed, but full stagnation is not required. There are plenty of good investments to be made. The investment climate has changed. Investors can no longer go out and buy any house expecting giant profits, but this change is a good thing. Investors and investments are now becoming more realistic, and the competition for great investments is thinning out as uneducated investors leave the real estate arena all together. Niches need to be found, but the proper investments are out there.

Build an investment fortune with Smart Strategies from PropertyVestors PropertyVestors is an investment group of CEOs, entrepreneurs and savvy real estate investors that are taking active steps to maximize their profits, while minimizing their risk by creating a diversified real estate portfolio. Investors are able to easily apply diversity in real estate geographically and by asset class through its various investment strategies and types of inventory.

To learn more about these topics, visit www.propertyvestors.com, sign up with the investment group by becoming a Premier Member for $245.25 annually and receive our eBook: "Capitalizing on Real Estate in Today's Economy." For general information about PropertyVestors or its offerings, email invest@propertyvestors.com or call 1-877-90-BUYER.

About The Author

Immediate PRIVATE LENDING / HARD MONEY LENDING Opportunity to Earn 20% Annually

Sarah Barry (PropertyVestors) — Tue, 16 Oct 2007 16:20:21 -0500

Immediate Private Lending / Hard Money Lending Opportunity

20% Annual Profit - Development in Greenbrier County, West Virginia

Need funding by OCTOBER 31^st

***2% FINDERS FEE (Please feel free to pass this along to lenders you know)

PropertyVestors is proud to offer an exclusive private lending opportunity for securing 200 acres and all infrastructure improvements for Phase 1 of "The Woodlands" development in Greenbrier County, West Virginia. The result will be 150 town home style lots and recreational parks for the community.

Contractual Return on Investment: 20% annual interest

Timeline: 24 months (balloon payment)

Protections: Investor funding is secured 80% LTV during infrastructure build, then 65% LTV for remaining term. Developer will utilize a government issued bond to repay investor funding.

Project Location: Lewisburg, West Virginia

Attractions: Minutes from the famous Greenbrier Resort, Greenbrier Valley Airport, Greenbrier River and a wide array of outdoor adventures including hiking, biking, camping, caving, canoeing, fishing and cross-country skiing.

1-5 Investors to fund $2.4 million by: October 31^st. $1.3 million has already been received

This is an ideal opportunity to utilize and boost the return on your Retirement Account.
Private lending ROI is 20% annually for 24 months (40% for project)
Community Economic Bond for approximately $1.8 million supported by state governor of West Virginia
Private tours available^. Tour the property and town...get to know the developers, the builders, and the state wide support for this development.

Take Note:

This private lending offering is an excellent opportunity for an investor(s) to get involved in a showcase property supported by the state of West Virginia. We are looking for strategic investors that would like to get involved in strategic development deals that give optimal return for private lending. .
Additional documentation available for serious inquiries.

Action - Please let us know your level of interest today!

Best Regards,

Shawn Barry
PropertyVestors Investment Group
Smart Strategies for Real Estate Success
Main : (877) 90 BUYER
Direct: (804) 334-8010

shawn@propertyvestors.com