Over the past few months a lot of people have you received a letter in the mail addressed from the National Debt Relief Program. This letter appears to be from a government agency and seems to be legit when you first look at it. On further examination, consumers discovered that it is not from a national agency but from a debt settlement company – GHS Solutions. The verbiage of the letter will include claims that the government has come out with a new program to help those with rising credit card debt. It will also include promises of cutting the payments by 50% especially for those whose credit card debt exceeds $10K. If you haven’t figured it out by now, this is a scam.

GHS Solutions, a debt settlement company out of Florida sends out these direct mailings to huge lists obtained through several sources. Naive consumers who believe that the mail is related to an actual federal or national program to reduce credit card debt enroll in the program. Often, the debt settlement agency fails to live up to its promises, doesn’t stop collection calls and doesn’t negotiate debt soon after payments are received. There are more than a hundred complaints filed with the BBB regarding the misrepresentation of this company and its failure to provide relief to its clients.

It’s not surprising that consumers are feeling the burden of mounting credit card debt in these uncertain times. Its also not unusual for the same people to fall prey to such scams. But, it is exactly now, that all of us need to be more selective about the legitimacy of information source or the company providing a solution. There are numerous companies out there that are legitimate which provide debt settlement services.

Before you follow up with any offers from debt relief/settlement companies, look up reviews of those companies online. Contact the Better Business Bureau to see if there are any complaints against the company listed with them. It is imperative that you, as the consumer, are aware of the type of debt relief program that you are dealing with. There are a variety of options available during the debt settlement process. Be aware that the debt settlement procedure involves the negotiation between a company hired by you to represent your interests and your creditors. The aim of the debt settlement company is to negotiate the reduction of your debt liability. It doesn’t always turn out that way and there are several risks involved.

Property Selling Basics: What is a Short Sale?

According to the National Association of REALTORS (NAR) website a short sale is “a sales transaction in which the seller’s mortgage lender agrees to accept a payoff of less than the balance due on the loan.” (1) This happens when the seller is unable to satisfy the amount owed on the home because of dropping home value. Once the transaction is complete the lender agrees to forgive the rest of the debt not paid by the transaction.

Short sales, when handled correctly and with professional assistance can offer advantages for all parties involved. First, the seller is able to avoid having a foreclosure on their credit. These types of transactions affect credit but not to the extent that full foreclosure can. Second, the buyer generally gets a home for a better price than it would have been available for in the past. Third, the lender is able to recoup a majority of what is owed on the mortgage. All in all this can create a “win-win” situation everyone feels positive about.

Real Estate Checklist: How to Know a Short Sale is the Right Choice

It is important to remember that even if there are benefits this is NOT a normal property transaction. Dealing with a bank or other lender means it can take as long as 30-60 days just to get a contract accepted. This type of property purchase is NOT the best choice for buyers if any of the following apply:

-The sale of the home must happen quickly. For instance, if a homebuyer just sold a home in order to purchase the new one and they must be in their new home within 45 to 90 days a short sale is not a good option.

-A down payment cannot be provided in cash and the buyers have issues with qualifications or financing. Secure financing gives the lender faith the new owners will be able to pay the entire mortgage.

-Repairs and repair credits are important to the buyers. Essentially when buyers complete a short sale they have agreed to purchase the property “as is”.

-Homebuyers are planning a “do it yourself” purchase. This kind of transaction is complex and requires the assistance of an experienced professional. Short sales are only completed when every detail of the transaction is handled correctly and all demands of the lender are met.

Short Sales Require Plenty of Patience and Reliable Real Estate Expertise

Often advantageous, the way to ensure success is to hire trustworthy, experienced professionals. Most importantly homebuyers need a qualified agent with experience in these transactions. An agent with experience with these transactions will be able to show you available short sale homes, negotiate the price and clearly communicate with the lender.  Buyers will also need an experienced real estate attorney. According to the NAR website only 2 of every 5 short sales are approved by the lender. (2) Title Officers are also helpful during these exchanges. A title search provides the information necessary to avoid any problems later on in the transaction.

Experienced professionals can help short sale buyers and sellers avoid rejection by lenders and any dissatisfactory terms. As long as trained professionals are part of the transaction success can be achieved.

Resources:

(1) http://www.realtor.org/library/library/fg335 (A. Siudzinski, Senior Information Specialist)

(2) National Association of REALTORS http://www.realtor.org/rmosales_and_marketing/handoutsforcustomers/handouts/short+sales+tips+for+buyers

The Extended Homebuyer Tax Credit Makes the Buyers Market Even Stronger

Everyone is talking about the number one reason buying a home makes sense this year: the first time homebuyer tax credit! But the tax credit extension signed into law in early November offers even more incentive to buyers. Now, not only first time homebuyers benefit, but also any individuals or families looking to purchase a primary residence can participate.

According to IRS.gov, “Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.”

First time homebuyers continue to receive an $8,000 tax credit, while homeowners planning to purchase a “replacement principal residence” can claim a tax credit of up to $6,500 or up to $3,250 for married individuals that file taxes separately. IRS.gov confirms that existing homeowners must have lived in their previous home for a minimum of 5 consecutive years

Low Mortgage Rates Create Real Estate Opportunities

In addition to the extended federal tax credit, interest rates are still below 5%, which makes now a great time to buy a home if you qualify. With mortgage rates still low, people are able to buy into a bigger home than they could have in the past. This is one of the positive results of the current economy. If you want the chance to purchase a home you couldn’t have 4 years ago then now is the time to buy. This also makes buying rental and investment properties much easier. There are better deals to be found on both residential and commercial real estate across the country.

Educated Decision Making Equals Real Estate Success

Real estate has a proven history of being a good investment. In the long term, real estate investments always provide a reliable ROI. In more difficult economic climates there are some things to watch out for in real estate. First, don’t believe whatever people tell you. Take the time to understand how the market works and discuss with a real estate expert. Don’t just believe in what you hope is true, get the facts from an experienced real estate professional. Second, deal with the reality that the days of flipping houses are over for a while. Right now a long-term investment of at least 3 to 5 years is best for most buyers.

Making Dreams of Home Ownership Come True

The most satisfying experience in real estate is being a part of the process and helping buyers and sellers achieve success. A great real estate agent loves the feeling of a job well done and knows the value of taking the pressure off individuals and families during the transaction. Every agent’s goal should be to alleviate stress and quality real estate professionals recognize that the completion of a sale is a big deal to all the parties involved. Find a real estate broker that is truly invested in your success and treats you as they would want their family or loved ones to be treated. This level of service ensures you will reach your goals.

Contrary to popular hype, getting started for retirement late is not a crisis – as long as the right plan of action is put in place. One increasingly popular source of retirement income is the reverse mortgage. Although we typically think of a 401(k) or an IRA when we think of saving for retirement, a reverse mortgage allows you to access the equity you have already built in your home as a source of income. This makes a reverse mortgage an option if you are looking to save for retirement or pay for a home improvement, health care expenses, or to support the transition to a long-term care facility. How Does a Reverse Mortgage Work?

A reverse mortgage basically operates in the same way a traditional “forward” mortgage is negotiated with a lender. However, instead of paying a monthly payment to the lender, you actually paid for the existing equity in your home.

Overall, there are three types of reverse mortgages: Single-purpose reverse mortgages are offered by some nonprofit agencies, as well as some local and state government organizations. Though this is the least expensive option, it is available only in certain areas and the lender specifies its use.

Federally-insured reverse mortgages, also known as Home Equity Conversion Mortgages (HECMs), are backed by the U.S. Department of Housing and Urban Development (HUD). HECM loans have no restrictions on use, are widely available, and have no income or medical requirements. Prior to applying, you must meet with an HECM-approved counselor. Up-front costs are typically higher than a traditional mortgage with this type of loan, but the total cost is lower compared to proprietary reverse mortgages.

Proprietary reverse mortgages are private loans backed by the companies that create them. Some lenders require counseling before application. Again, up-front costs are typically higher than a traditional “forward” mortgage with this type of loan; however, if you own a higher value home, you may receive a larger loan advance with a proprietary loan than with an HECM.

Once you negotiate a reverse mortgage with a lender, there are several payment options available to you. Among them are monthly payments, a line of credit, or a combination of the two. Repayment is generally required only when your home is sold, or is no longer your primary residence. Most reverse mortgages contain clauses to ensure that you will not owe more than the value of your home.

Is a Reverse Mortgage Right for You?

If you are 62 years or older, have established equity, or own your home outright, you are eligible to apply. You must also live in the home as your primary residence. Your age, the type of reverse mortgage you choose, current interest rates, and the value of your home are some of the factors that determine the amount of your loan. In the case of HECM or proprietary loans, you may do as you wish with the cash advances, and they are typically tax-free. A reverse mortgage allows you the freedom to use the equity you’ve built in your home, and is an option for many who may have gotten started saving for retirement late. Be sure to understand all of the conditions surrounding the type of loan you choose and discuss your options with a financial advisor or loan counselor before making any final decisions.

Many of us have noticed some changes with our credit cards lately. In an effort to protect consumers, the credit card industry has been forced to make some changes.

We saw how credit card cash advances and advance tax refunds brought money problems to many households. Fortunately, some of the changes coming with the CARD Act will help consumers avoid problems that can lead to serious and long term financial trouble. On the other hand, creditors are finding new and creative ways to remain profitable.

Overdraft fees

At one time or another, most of us have been unfortunate enough to have mismanaged our checking accounts and been charged an overdraft fee. The Credit CARD Act is severely limiting banks’ abilities to charge these fees. As of July 2010, consumers will have to opt in to be able to overdraft using their debit cards.

Balance transfers

Teaser rates for balance transfers are few and far between. While many credit card issuers used to offer extremely low rates for six months to one year on balance transfers, the new rules are making these offers rare.

The Act has restricted creditors’ abilities to adjust rates on credit card balances. As a result, introductory rates may be lower than the card’s standard rate, but they are much higher than the 0% that many of us had become used to seeing.

Credit cards for borrowers with bad credit

It will be harder for people with low credit scores to apply and be approved for credit cards. In the past, creditors were willing to offer credit cards to borrowers with bad credit. The issuing credit card company would allow higher risk borrowers a card with a low initial credit limit. The interest rate would be higher than a “regular” credit card, and there would be an annual fee charged whether or not there was any activity on the card.

Since the Credit CARD Act has attempted to reduce fees paid by consumers, creditors are having a hard time making these higher risk cards available while still being profitable for them.

Prepaid cards

Many higher risk consumers who are not able to get a credit card will find themselves opting for a prepaid card. These cards require users to make a cash deposit to the card. They are then able to use up to the prepaid balance that is available on the card.

New rules will require card issuers to disclose all fees to their consumers. On a positive note, the Act will also extend the length of time that cards are good so that inactivity does not cause a consumer to lose the balance on the card.

However, card issuers may impose higher upfront and reload fees to make up for lost profits from expired cards.

Since many of the new rules have not yet come into effect, we are still unsure of how consumers will be impacted. But, in a time of such uncertainty, it has become much more important for us to regularly review our credit card and bank statements, as well as those “fine print” disclosures that come in the mail.

Before we discuss deal terms, let’s discuss when you should ask potential investors about “deal terms”. This applies to Hedge Funds, as well as private equity firms and venture capital firms.

I always recommend that my clients prepare a separate Executive Summary to save them time screening potential investors and to protect some of their confidential information.

You can weed out funding sources who will waste your time by first sending them your Company’s Executive Summary instead of your full Business Plan. The time you spend working on raising capital and meeting with potential investors is valuable. Use it wisely and try to find your best candidates for funding quickly. Concentrate your efforts on them.

Remember, venture capital firms usually focus their funding efforts on start-up companies and private equity firms usually focus their efforts on existing companies. Some very successful Hedge Funds have become hybrids, meaning they look at private and public companies, start-ups and existing companies.

Some online sources can be very helpful and save you significant time in your quest for capital. Hedge Funds will do convertible debenture funding as well as equity line funding. Hedge Funds can usually make a faster decision on funding than private equity firms. They will consider various types of funding such as equity, asset based, a combination of debt and equity, bridge loans and reverse mergers.

Once some investors have expressed interest and want to see the full Business Plan you need to do 2 things before you send it to them:

1. Ask them to sign a Confidentiality Agreement, if you in fact have confidential information in the business plan. Most businesses will have something confidential they don’t want everyone to know, especially their competitors. It actually might seem a little odd to a potential investor if you don’t ask them to sign some form of confidentiality agreement.

2. Ask them about their basic financing structure. They may tell you something you don’t want to hear. Maybe they want you to go public within 1 year of funding. Your Management Team, however, was counting on a buyout by your main competitor. If that is the case, then save yourself the time of sending that potential investor your full business plan.

Venture Capital Firms will more likely dictate the terms of the financing and you may have very little room to negotiate. They do offer large amounts of capital if the decide to fund your company, but they expect alot in return. Also, your Management Team may have to give up voting control. So find out in advance before you spend too much time with one Venture Capital firm that has demands that are clearly unacceptable to your Management Team.

Angel Investors on the other hand may ask you to give them a term sheet. It will be much easier to negotiate with them, that’s why they call them Angels. And although they will conduct thorough due diligence it will be quicker and less painful than the grilling a Venture Capital firm will put you through.

No matter what anyone says, deal terms are almost always negotiable, YES, even with big venture capital or private equity firms. How much you will be able to negotiate with them is another story however. For instance, you may be able to negotiate small points, like 8% interest instead of 9% interest, but you won’t be able to talk them down from 30% equity ownership down to 20% equity ownership.

Board membership is another item left open for negotiation. Some large firms like to start out with 2 out of 5 board seats in your company, but if the company doesn’t hit certain milestones in terms of gross and net revenue, then they can ratchet up to 3 out of 5 board seats, which means you can potentially lose control of your company.

Many people have witnessed the sudden rise in the use and interest in wireless phones. This popularity is often attributed to the convenience that cell phones provide us. Of course, through wireless phones, we are able to constantly communicate with our loved ones, friends and business partners.

Cellular or mobile phones are highly regarded as helpful tools for communication. They offer us the capability to call and send short messages to other people, through effective and affordable phone service options. The most common phone service alternative we are all familiar with is the prepaid cell phone service

But, is it wise to purchase just any wireless prepaid phone service? The answer to this query is a big no. You should think about several things before you finally settle for a prepaid cell phone service. This is critical since your choice will determine whether or not you will get the full benefits of the prepaid service you plan to buy.

So to guide in choosing the right prepaid phone service, below are some guidelines that you should observe closely.

Guidelines in Choosing Prepaid Phone Services

Know the exact call rate in your phone plan. Of course, a lot of us make use of our cellular phones to call our friends, relatives, and business associates. But many companies that provide wireless prepaid phone services charge higher rates especially for long distance calls, as opposed to the call rates specified in monthly phone plans.

Thus, it is essential that you know exactly how much you will pay every time you place a call using your prepaid phone. And be sure that you read and understand the details of the prepaid phone service you plan to get.

Discover all the features included in the prepaid plan. Most people want to use their mobile phones for wireless web surfing and for extra services like call waiting. But some wireless prepaid phone services do not provide these extra features. Therefore, you must ask a plan distributor about the components and inclusions of the prepaid phone plan.

If the feature you are looking for is not included in the plan, inquire how much you are going to pay for that extra feature. If the extra charges would prove to be very high, you might as well shop around for another prepaid phone plan.

Inquire about the coverage area. You need to inquire about the coverage area from the prepaid service provider. This will make sure that you can continuously enjoy the services of your prepaid phone plan even as you travel around the country.

Pay close attention to expiration dates. You need to be well-informed when the minutes of your prepaid phone service will expire. In this way, you can be prompted when to purchase airtime and when to reload the minutes to your mobile phone.

Employ these guidelines in shopping for the right prepaid phone service for you. Eventually, you will be able to select the prepaid cell phone service that will work best for your calling and texting needs!

With market analysis, you need to define what your price range is. Don’t tell me you’re a real estate investor and you buy anywhere from $10,000 to $45 million. That’s not meaningful to anybody, and particularly not as a private lender. It doesn’t mean very much if that’s what your range is.

Define Your Price Range

If you’re going to be buying single-family houses, I want to hear, “I’m going to be buying anywhere from $75,000 up to $150,000.” That’s a fairly nice range. Or, “I’m going to be buying single-family homes in nicer communities for $400,000 to $600,000. I’m not doing the low-end stuff. I’m not doing a little bit of this. I’m going to be buying bread & butter, medium priced homes.”

If you really want, that’s fine, you can do high-end stuff. Just say, “I’m going to be buying homes in the $1 million to $1.5 million range.” Again, you have to define your range fairly tightly. Everyone understands what you’re doing, and you become the expert in that area.

What Types of Properties?

What type of properties are you going to be buying? What types of buyers and renters is your focus? You want to focus on the types of properties you’re going to be buying and the types of buyers and renters that you might be focusing on.

Are you going to be buying and trying to sell quickly, as they call flipping? That’s one way of doing business. I think it’s a tough way right now. Are you going to be buying and holding? What’s your strategy once you’ve purchased the properties?

You also need to focus on the types of properties you’re going to be buying. Are you going to be buying properties that are in foreclosure or short sales through lenders? Are there any other pieces of the puzzle? You need to think that through and really quantify it.

Again, I would ask and encourage you to spend some time thinking about these issues. It’s one thing to be a “real estate investor” – it’s another thing to be a real estate investor that has a well thought out and defined plan.

Repair Budget

Another thing on this list, and again you can address some of them, is what is your average repair budget going to be?

60-Second Business Plan

Now, what I’ll do is give you in about 60 seconds what my business plan is. I think you’ll find it meets quite a few of these criteria. If I was sitting in front of a private investor and the guy says, “Alright, I want to know what your business is.” I would say to that gentleman or woman:

I buy in a town called Norristown, Pennsylvania, on the outskirts of Philadelphia. That town is a low to mid economic type of community. It is a town that is struggling but is improving.

It has approximately 15,000 to 18,000 homes. The average home in that community runs from about $75,000 at the low end to about $150,000 at the high end.

We buy houses that are 3, 4, or 5 bedrooms. That’s it. We do not buy two bedrooms or less, and we do not buy six bedrooms or more. We are extremely focused on the 3, 4, and 5 bedroom community because once we purchase that home; we can turn around and rent it.

We buy and hold the property. We know the rents are going to be somewhere between $900 for a 3-bedroom home to about $1,200 to $1,400 for a 5-bedroom property. We can buy them from anywhere between $75,000 to $150,000.

We do not do substantial rehabs. We do not do properties that require foundations or major plumbing or electrical issues. We buy properties that need cosmetic work including carpet, paint, maybe kitchens and bathrooms.

Once we have purchased the property, we can turn around and rent it anywhere from that $900 to $1,200 range.

Focus is the Key

That is my business plan in about 60 seconds. You can see, it’s pretty focused and has specifics. I know what prices are in my community. I know the demographics of my community. I know the type of people that are in my community. I know what they can rent for and what they can sell for.

So that’s really the Market Analysis.

I have many students contacting me with questions about organizing a Private Lending Credibility Kit but, there are a few questions that stick out in my mind and are frequently asked.

Can I use my resume as my bio?

I guess a resume he was referring to would be a job resume. I would not recommend that. Clearly, a bio in the way I’m thinking about it is more of a story. It’s more of an explanation as to why you’re an expert in the real estate investing field. It is not a dry set of facts about where you’ve been, what schools you went to, what jobs you’ve had, and what dates that you’ve had those jobs.

I’m not saying you can’t use a resume in there, but I think a bio is more of a story, an explanation. It’s very powerful when it’s well written. It really lays out why you’re an expert and what makes sense for you to do.

Who should I send the credibility kit to?

That’s more of a marketing question than the kit itself, but I’ll be happy to address it. Who you should send it to is all in the marketing piece that we spoke about. Anybody you’ve identified or any groups you’ve identified as a potential prospect.

What I would typically recommend is you would send out a postcard, or a flyer or a letter, or get invited to a presentation, or any one of these number of various marketing pieces.

Once an individual has raised their hand and said, “I want to learn more,” and they may call you back or they may email you back from a card, they may come to talk to you at the back of the room during a presentation. There are all kinds of different ways that this may take place, but in some respect they have essentially raised their hand and said, “I would like to learn more about private lending. Could you tell me some more?”

At that point, it would make some sense to send them your credibility kit with your cover letter and possibly a free report or some other mechanism to kind of introduce yourself and your program. That’s who I would be sending my credibility kit to.

The next question really has nothing to do with the credibility kit per se.

How do I find private lenders?

How do you find them? That’s a whole course, I believe, but ultimately you’re either going to have to do a traditional marketing meeting, post cards, or something of that nature.

One of the things that we certainly will be talking about down the road here, when we talk about marketing for private lenders it’s extremely important to talk about what not to do. Again, what not to do is almost more important than what to do.

I actually just wrote an article about this recently. We do not recommend any sort of big, public types of advertising. Certainly no internet advertising of any sort, no radio, no newspaper, or certainly be very careful with newspaper. We do not advertise outside of our state. You want to make sure that you stay within your state. That’s why I like postcards because you can direct exactly where they go.

You have to be careful of all these other sources, radio, newspaper, Internet. You do not know where the reader might be. If they’re in a different state that would be a cross-state solicitation potentially, and you could get a call from a potential SEC person in your state. That’s something we obviously would like to avoid.

Lease options are a great concept, but the reality is they don’t work too often in the real world, particularly right now, because if anybody could not have gotten a mortgage a year ago – I think John is the mortgage broker – if they couldn’t get a mortgage a year ago or 18 months ago, they’re sure as hell not getting one today. The whole lease-option concept right now has some problems and some issues.

Lease with Option to Buy

By the same token, if you wanted to allow somebody to come in and rent it say for five years, with the option to buy it at some point, that would be a logical and very valid business plan I would think. Your private lender would understand that. You would explain to them, “We will rent it to them at $1,000 a month, but they have the option at some point to be buying it for X or Y.”

At that point, the private lender would be paid off, but it could be six months, it could be three or four years down the road. Either way, the private lender is not going to mind because they’re going to be getting their interest in the interim, and at some point down the road they’re going to get bought out.

That’s not necessarily a bad thing. That’s a strategy that I think makes a lot more sense today. The quick turn, the one-year lease option, I don’t think makes a lot of sense. I don’t think most people that were struggling to get a mortgage in the last 12 months are going to get a mortgage in the next 12 months.

In the next three or four years I think is very possible, and that makes some sense to me, but people that are struggling right now are not getting mortgages in the next 12 months. That’s kind of just the brute reality that we’re in.

Closing Costs

Some other things you need to think about are your closing costs, and you go through this list and they’re all there. Basically, who will do your closing? Are you going to do it through a title clerk, are you going to involve an attorney, or are you going to try to close it yourself, which is probably not a good idea, but in theory you can do it.

Include Marketing Materials

Then any sort of marketing materials that you might be using as part of this process. I think marketing materials inside of a credibility kit or inside of a business plan have a lot of power and a lot of polish to them.

I would highly recommend that you do that. It just shows your skill level in terms of marketing, and if you go through a business plan and you get to the sales strategy piece of it, and you go through page after page after page of the marketing pieces, the flyers, the signs, the newspaper ads, the MLS listings, the Craigslist listings – if you lay all that out for somebody and they see all the various marketing pieces that you’re going to be using, I think it carries a lot of weight and a lot of power. That’s the sales strategy.

The sales strategy of your real estate investment business plan is another big section. You really need to focus on that. Ultimately, you have got to be able to sell your properties at a profit. This is your business. You’re going to be buying, maybe holding for awhile, but ultimately have to be able to sell or provide some sort of exit strategy that makes sense.

Buying vs. Flipping

Now if you’re going to be buying a property and holding it, for the most part it’s a strategy that I think makes more sense. Certainly in this economic environment I think it makes a lot more sense. Then your private lenders can hang in there with you for a couple of years for the most part, and you’d allow them to just get payments over time. Then somewhere down the road, 3, 4, 5, even 10 years down the road, you’d sell the property and you’d pay off your private investor.

So part of the sales strategy is how are you going to execute that? Are you going to be buying and holding or are you going to be buying and flipping? You’ve got to be able to lay that out for the investor.

What is Your Selling Strategy?

Are you going to be doing the selling? I would assume that most of the people on this call are not realtors, so the question is going to be, are you going to sell it yourself? Are you going to be hiring professionals to sell it on your behalf, including realtors and going through that process? You need to make those decisions. You need to think that through as to whether you want to sell it through that mechanism or you’re going to try to sell it yourself.

Decide on a Selling Price

You need to understand how you’re going to price the property. Are you going to price it real aggressive to sell quickly, thereby foregoing some potential profit but trying to sell the property relatively quickly?

In this environment, that may be your only option, but hopefully as the real estate market quiets down and kind of gets back to normal you would have some options and you could sometimes price it a little bit more aggressively. You need to think those things through.

Then you need to think through, again, I think we’ve talked about this once, which is the lease option. Are you going to sell it through a lease option, meaning you would offer the tenants or the prospective buyers the option to rent the property for a year or two or three, but ultimately give them the right to purchase the property at some point down the road?

When organizing your private lending credibility kit; be sure to bring out your educational experience for credibility. Any certificates that you might have or any boot camps you’ve been to, even any books that you’ve read. The more you can include in the kit the more powerful it is.

Include Certifications and Professional Affiliations

If you can list two or three pages of real estate books you’ve read, courses you’ve taken, include copies of any certificate that you might have gotten at these various courses, any memberships that you’re involved with.

If you’re very involved with your local REA group and maybe you’re on the board or maybe you help out with the meetings, all those things are extremely powerful and obviously something that you want to bring out.

Recognition Awards

Any recognition awards that you’ve gotten, even if it’s not necessarily real estate related, I think it’s very helpful and very powerful. It shows that you have some distinction and that you have shown some leadership and expertise. Maybe it’s not even in real estate, but again you’ve shown these abilities to kind of stand out from the crowd.

Anything else you’ve attended or if you could list every single book – I know personally I have read probably well over 100 real estate books, maybe more, I don’t know.

Seminars and Courses

I do not attend a lot of boot camps; I’m not a boot camp person. I’ve attended a few. I typically don’t go to them. I think they tend to be a little too long and too costly for the most part. However, if you have attended some of those they are important to put down.

Any other experience that you’ve gotten, if you’ve taken local courses at a community college or a local college put all of that stuff down, it clearly shows some expertise in the real estate investing.

Other Related Education

Before turning to real estate investment you have additional education in another field that can attest to your dedication and credibility as a real estate investor. Include this in your educational experience and explain how it relates to your ability to be successful in real estate.

For example, you may have a business degree for another field in which you previously worked. Describe how this type of education defines your ability to successfully manage and execute a real estate transaction.

Law Journals

Law journals are something that’s interesting. It’s a small way of doing it. You have to be very, very careful again on how you do law journals. Most communities, almost every county I believe in the United States, have a local law journal. The attorneys list all the cases and the results and all that.

In my area here, the law journal’s about 90 to 100 pages every week. It comes out weekly. The attorneys use it, I guess, for something. I’m not sure what. They are advertising in my local journal here. It’s actually relatively cheap.

* Evergreen Advertising: I can get a business card sized ad in my local journal for about $450, and that’s for a year’s worth of ads. That’s 52 ads in the local law journal. I think it’s something that you might want to consider. It’s also what I call an evergreen type of advertising, meaning once you’ve drafted the ad and created it and sent it over there, you don’t need to worry about it for the next year.

* Importance of Content: Again, another caveat here is make sure the ad talks about information, talks about free reports or something of that nature. Again you don’t want to be making a private lending offer. Be careful here a little bit. You are going into the lion’s den. Attorneys are always looking for people that make mistakes, so make sure your ad is very informational.

You will get some responses. In fact, my local law association, I guess they’re having trouble this year with the economy, so they are now offering not only a business size ad, but they’re offering in their annual report. I can get that in there. They’re also offering their sports events. They have like picnics. I can get advertising all there for no extra cost. I gather they’re having a rough time filling the ad space this year.

Senior Newspapers and Community Papers or Flyers

This is a beautiful way of advertising. If you have local senior communities, in Pennsylvania here we have one. It’s a very large senior community. It has well over 1,000 houses, apartments and whatnot. They have a published newspaper that they present to their people, and you can advertise in there.

Again, you might want to advertise for free information. You might want to advertise for a free seminar. You would tie that in, if you could get to do a seminar in that building. You would obviously want to spend a little money to promote it and advertise it. You would use that as a possibility.

Senior newspapers I think are an outstanding way, and again very cost effective. These newspapers do not cost a lot of money. If you’re spending $100 for an ad, you’re spending way, way, way too much. These ads should typically cost you $15 to $30. They don’t cost much.

It is extremely important to learn how to develop an advertising disclaimer to use in all of your marketing materials that will keep you clear of the federal and state SEC.

I have provided you with two template disclosure statements that you can use. I am not sure these are absolutely necessary if you’re doing private lending the right way – that is, you’re providing information and are offering CDs, reports or educational materials. But it certainly does not hurt you at all by putting a disclosure in there.

You are not going to lose any points here by doing this. Again, you may not absolutely have to do it, but you certainly are not going to be hurt by doing it.

There is a short disclosure and a long disclosure.

Here’s the long one.

This is not a public offering. This is not an offer or invitation to sell or a solicitation of any offer to purchase any securities in the United States or any other jurisdiction. Any securities made will only be offered or sold directly or indirectly in the state or states in which they have been registered or have been offered under an appropriate exemption.

The short form of the disclosure is this.

This is not a public offering or offer or invitation to sell securities or make an investment.

You can use these disclosures or modify them to fit your needs. There is no absolute disclosure. Basically you’re telling people that this is not an offer to buy an investment.

You can use this in some of your marketing materials if you like. It will give you extra protection and certainly probably worth considering. You can also incorporate these disclosures into your advertising and marketing plan.

Whatever you do, it is worth investing the extra time to create an advertising disclaimer compared to the mountain of headaches you could potentially buy yourself by not adding an advertising disclaimer. Not only is it worth the piece of mind, but it is also a smart move toward protecting yourself against any unexpected hassles with the federal and state Securities Exchange Commission.

Using an advertising disclaimer also protects you from being held responsible for something that is beyond your control or something in which you would prefer not to be held responsible for with regard to securities or even anything outside the scope of the Securities and Exchange Commission.

Reformulate Your Business Plan

The last one is formula. Reformulate your business plan. A business plan is not set in stone. Don’t write it in Word and then think that it never changes. It’s a living, breathing document and it changes with the times and the elements of its surroundings.

As you develop it you’ll also be modifying it over the years. You’ll be changing and updating it. You’ll be moving in a slightly different direction. Obviously your management team may be changing from time to time.

It’s a dynamic document. Allow it to be dynamic and make sure that you’re constantly changing your document. If you decide to go from a buying and holding concept to flipping, there’s nothing wrong with that at all. Make sure you update your business plan so it reflects your new venture and your direction.

Again, a business plan is not done tonight, next week, whatever and then never changed again. In fact, to a certain extent, this is just the early steps of it. It’s an evolution and an ongoing process that you must consistently pay attention to.

We talked about that a lot with the credibility kit. I don’t know how many of you were on that call. The credibility kit cannot be developed in one or two days. Too much of it has to be done over time and it has many elements that change with your direction and other components.

Continually Build Your Business Plan

The point is you start to focus on it. You make mental notes for yourself, like when you’re at your banker, get a referral letter. When you’re with a client or lawyer, get your referral letters. You start to ask for these things and add them to your credibility kit.

Keep accumulating these things and over time you will build a comprehensive kit that will make you look accomplished. The kit continues to grow larger. As long as you keep your mind focused on it and keep developing it, then it should grow and get refined over time.

The same thing holds true with your business plan. You need to give it the same careful attention that you did with your private lending credibility kit. It makes no sense whatsoever to have a comprehensive private lending credibility kit and then a business plan that is out of date. The business plan needs to be an extension of your credibility kit and an essential part of your portfolio.

Those are some of the elements to consider as far as the real estate investment business plan.

The appeal of debt consolidation is simple. You can combine all of your different payments into a single, lower payment, and get out of debt. If you listen to the advertisements on television and online, the results are faster, easier, and worry-free. If you’re facing a large debt, this may sound like a great idea; however, the truth is that the overall cost may not be worth the short-term benefit.

Options for Debt Consolidation

The purpose of debt consolidation is to roll all of your existing debts, with their varied payments and interest rates, into one large loan with one payment (and hopefully, one lower interest rate), allowing you to get rid of your debt faster than you otherwise would. As it stands right now, several options exist for debt consolidation. Among the most popular are:

Debt consolidation companies: These companies promise to negotiate for lower interest rates on your debts, extend your repayment schedule, and prioritize your debt, paying off higher interest debts first. The company takes over the task of paying your various creditors, and in return, receives a percentage of the debt paid, or a monthly fee, depending on the company. Even if your interest rates were lowered, you may end up paying more in total debt over time because of the fees associated with the company and the extension of the repayment schedule.

Home equity loans: If you are a homeowner, and have equity built in your home, you can borrow against the equity at a relatively low interest rate. One benefit is that the interest paid on a home equity loan is tax deductible. Most of the time, a borrower must pay an origination fee, and the loan typically carries a 15- to 30-year term. Because you are using your home as collateral, you must be sure you can make the payments, or you risk losing your home.

Personal loans: This type of unsecured loan may be available to you if you have good credit. The interest rates on personal loans are typically higher than those on home equity loans; however, they may be lower than the interest on your credit cards.

How to Get Out of Debt

If you’re considering debt consolidation, the first step you need to take is to stop using credit, and establish a realistic budget. Although there are many ways to consolidate your debt, establishing a budget may allow you to determine that you are capable of reducing your debt all on your own. In fact, you may be able take the same steps the debt consolidation companies do to get out of debt yourself, and avoid all of the fees.

Request a lower interest rate: Negotiate with your creditors, call customer service, and explain your situation. Don’t take no for an answer.

Extend your repayment schedule: Ask for lower monthly payments. Prioritize your debt: Plan to put the most money toward the debt with the highest interest rate first. Keep in mind that your goal is to get out of debt. As you pay down the balances of your existing debts, or consolidate your debts into a new loan, be sure to avoid using the available credit you now have.

You might also want to consider contacting a financial advisor to help you design a strategy for debt relief. Although there are costs associated with hiring a financial professional, he or she can also begin helping you establish an investment portfolio or retirement package.