Bernard Zick's

Advice for the Impatient Investor

For real estate investors who don't have time or money to waste!

July 2004

Editors: Bernard "Barney" Zick bernard@zick.com, Karen Zick and Amy McIntee

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The darkest moments in our lives are generally the most enlightening. - Mardy Grothe (Provided by Bill Kerley)

In this issue:

Greenspan Predicts Real Estate to Plateau

Getting Started: And/Or Assigns

Advanced Strategies: Buying a Right of Redemption

The Germans are Coming!

Upcoming Events

Greenspan Predicts Real Estate to Plateau

I have long been telling folks in California "Don’t be surprised if the next move in your markets is flat prices for awhile." The real estate markets have historically been like stair steps, up then flat, then up then flat.

On June 15, U.S. Federal Reserve Chairman Alan Greenspan finally got around to agreeing with me.

"We perceive that the very strong expansion in new and existing home sales is now flattening out, and the really quite unexpected boom in home sales over recent years is unlikely to be continued," Greenspan said during a Senate Banking Committee hearing, according to an AFP report.

"Our forecast is generally flat, not in price, but in aggregate volumes. Where prices go, I'm not sure, but I could be quite surprised if they showed continued acceleration on the up side," Greenspan added.

The wild card that has been behind a lot of the hyper growth has been low interest rates. Experts expect the Fed to soon begin raising rates, slowly but for sure.

What does this mean to you? First, new house sales will be the first to slip. So buying new construction will not be as sure a deal as it has been. Mind you, in many markets it will still be a good bet, but not in all, not automatically.

Someone asked me if this means problems in the industry for investors. I say it is the opposite. Yes, if you are the one that over- financed with the hope of a flip, and that is the only hope you have, you might be working harder to get out. Like they say, if you have your job and the neighbor lost his, it is an adjustment. If you lose your job, the economy is in big trouble! It is all relative to your situation.

What I see are lots and lots of investors TRYING WITH ALL THEY CAN TO GET STARTED OR TO ADD TO THEIR HOLDINGS IN THE “HOT” AREAS OF THE COUNTRY. If you are in that bracket, then the smart and hard working ones of you will do very, very well.

It is sort of like the old stock market saying. When volume spikes and the price drops a little, they say the stock has gone “from weak hands to strong hands." You will be seeing that. To me that is opportunity.

Secondly, many of the areas that have remained under-priced will continue to go up as the job market improves. Remember, one to four family housing prices are driven by earned income of the buyers. We have an expanding economy. And as long as you are in an area with an expanding economy that did not have several years of prices running up, this concept of “flat prices” may not affect you at all.

Commercial properties are an entirely different scene. They are driven by business expansion and multi-family should do well in the next two years. Construction has stopped and with the higher interest rates for homes, the exodus of good tenants will go back to normal.

Lastly, if you just got started investing, or even just got started studying, great! Your timing could not be better!

Getting Started: And/Or Assigns

Q. Barney, The way we have these attached documents done, is this assignable? We are talking to someone this weekend who is considering buying the assignment for $10,000 but now we are not sure we have the paperwork correct for this - we did not write in And/or Assigns (amateur mistake!)

Angela & Brian

A. I am not an attorney. As I read it, it has assigns in the approximately third line down. Read it again. Even if it is not there, they tell me that in theory all contracts are assignable.

Their follow-up question was: “If we find someone that just wants to BUY, can we assign them our contract to lease option?”

You can only assign what the right you have. Since you have the right to lease option, that is what you have to sell. But as long as the option is exercisable at any time, the new buyer can fund the option at any time.

(Below is a portion of the contract template Angela & Brian used…)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Standard Real Estate Purchase and Sale Agreement for Optioned Property

Parties _____________ (hereinafter referred to as “Buyer” and ____________ (hereinafter referred to as “Seller”), which terms may be singular or plural and will include the heirs, successors, personal representatives and assigns of Seller and Buyer, hereby agree that Seller will sell and Buyer will buy the following property, with such improvements as are located thereon, and is described as follows: All that tract of land lying and being in Land Lot _________ of the __________ District, ____________ Section of __________ County, _________ and being known as: Address: ________________ City: ___________ State: _______ Zip: _________ according to the present system of numbering in and around this area, and being more particularly described as Lot ______, Block _____, Unit ______, Phase/Section ______ of _____________ Subdivision, as recorded in Plat Book _____, Page ______, __________ County records together with all light fixtures, appliances, all electrical, mechanical, plumbing, air-conditioning, and any other systems or fixtures as are attached thereto; all plants, trees, and shrubbery now a part thereof, together with all the improvements thereon; and all appurtenances thereto, all being hereinafter collectively referred to as the “Property.” The full legal description of said Property is the same as is recorded with the Clerk of the Superior Court of the County in which the property is located and is made a part of this Agreement by reference.

Seller will sell and Buyer will buy upon the following terms and conditions, if completed or marked. On any conflict of terms or conditions, that which is added will supercede that which is printed or marked. It is understood that the Property will be conveyed by General Warranty Deed (unless otherwise specified in paragraph 15), with covenants, restrictions, and easements of record.

Advanced Strategies: Right of First Redemption

Q. There was a property in San Marcos sold at $27,000 in May tax sale (market value about $60000-$80000.) As far as I could determine there are no other lien holders. We are well within the six months redemption period.

I am thinking that I want to buy the "right of redemption" from the current owner with wording (transfer of deed/title) that I become the owner if I redeem the property (ca. $34,000 in expense + whatever I give the owner). It will cost me more than if I was at the tax sale, but that should clear away the redemption period, establish an ownership position, and clear the way to rent/lease and/or sell the property.

What do you get when you buy the right of redemption from the owner that has "lost" his house in a tax sale in Texas? I think that this can be a new cookie cutter if I can't get to multiple tax sales. This may be covered in John Beck's course or in the legal agreement that you will send to me concerning buying right of redemption and taking first position.

Ms. F.

A. Never found John's course, but when I do I will send it to you. I'll see if Quincy Long knows.

Quincy...got a short answer for us?

BZ

A. Barney:

It should in theory be able to be done, but a number of questions arise. The best thing to do before getting too excited is to get a contract with the owner who "lost" the house and get it into escrow with a title company. Tell the title company that you will be redeeming the property from a tax foreclosure and simultaneously getting a deed from the owner. You may have to look for a title company with enough expertise to handle it, but that is the only way I would do the deal. There are too many pitfalls otherwise. A big factor in how hard it will be is whether or not the property went back to the taxing authority or a third party at the sale. That is my short answer.

Quincy Long
Attorney at Law

The Germans are Coming!

Hypothekenbank in Essen, AG -- Essen Hyp for short -- has set up shop in New York City with plans to grow its mortgage business as much as $400,000 for private loans and $1 billion for public loans. The bank is targeting retail, multifamily and office mortgage loans.

Why bring this up? If the bubble is about to bust in U.S. real estate values, as some in the press would seem to say in their irresponsible and inflammatory headlines, then why is a very profitable and smart foreign company looking at building its U.S. presence? I know that German law changed a year or more ago to make such investments easier, but they would not be putting their money here now if they thought the markets were going soft!

Upcoming Events

Do you have an Options Boot Camp coming or would you like to attend with a friend?

It is Barney’s birthday month and to celebrate he is giving YOU a gift. Our next Options Boot Camp is in Denver on Thursday and Friday, July 15th and 16th. If you have the right to attend or have a certificate to attend, or even if you want to attend again, you can do so and bring your family and a friend and their family. It is vacation time and Colorado is really cool, in more ways than one, in July. So this “y'all come” special invitation is extended to you and yours so that you can work and play at the same time. (It is only available to our Gold and Gold Plus students that are owed a boot camp. If you are a Bronze or Silver student, call us about upgrading.)

Register now because our boot camp is offered on a first come, first serve basis. Once the room is full we will cut off registrations. (Our new policy will be put into place beginning with this boot camp. You will be asked for your credit card to reserve your place and you will not be charged as long as you do attend.) Finalize your plans and call us at 800-677-3253 so we can verify your right to attend. The normal fee is $1995 a person and Jeff Birk is promoting the event for us now in Denver. We are getting some registrations, but the Colorado mailing must not have gotten delivered properly. The very small crowds at the currently running previews have prompted us to give you this one time special offer. You still have time to get a two week in advance air ticket, so if you have been wanting a deductible vacation, now is your chance to learn, plan and come back to make more money!

Denver, CO

Thu. & Fri., July 15th & 16th, 2004
Denver Marriott Tech Center
4900 S Syracuse
Denver, CO 80237
303-779-1100

Registration begins at 8:30 a.m. and the boot camp begins at 9:00 a.m. each day.

During this event, we will do role play about how to negotiate options. We will have a homework assignment that will allow you to make offers, and if we can, close a deal. We will arrange for up to $2,000 to be available to fund a joint venture for the best option deal found! Time permitting, we will go over the forms and show you how to fill in the blanks.

This Boot Camp can potentially make you more money than any other seminar you have ever had the chance to attend. It is no secret that fortunes have been made by those that know how to use real estate options. Now, details of these financial maneuvers are explained by Barney Zick.

Help Wanted Ads:

The summer is a very busy seminar period. This is especially true while we move part of our operation over to Optionetics and while we are building our mortgage operation across the U.S. (We added 14 new states this month alone!) So if you sent us an email about trading your skills we may not have answered you. We will. Please be patient.

Also, be careful what you put in the subject line of your emails. We delete 100 at a time. “Student Question” or “Trade” works well! “Make Big Money” or such will get you deleted! Thanks for your help.

Next Real Estate Options Boot Camps

Denver, CO

Thu. & Fri., July 15^th & 16^th, 2004

Phoenix, AZ

Sun. & Mon., July 18^th & 19^th, 2004

Details below…

For those of you who purchased a boot camp as part of your home study materials, you will have to use your privilege this year. If you have attended our Options Boot Camp before, you may come again. The information has been revised. Of course, the portion of the boot camp when we work on deals, which takes most of the second day, is different for each event. It is a real eye opener for those of you yet to do your first deal.

For more details about our Options Boot Camp, Click Here.

Real Estate Mini- Seminars

Click here to register for a complimentary Mini-Seminar.

Come hear what Barney's programs are all about. These Mini-Seminars will often be followed by a Two-Day Boot Camp in each metro area.

(T)=Tentative (F)=Optionetics Faculty Presenter

Thursday, July 1st
Scottsdale, AZ (F)

Friday, July 2nd
Phoenix, AZ (F)

Thu. - Sun., July 22nd– 25th
Miami, FL (T) (F)

Saturday, July 24th
Reston, VA (Full Day)

Thu. & Fri., July 29th – 30th
San Antonio, TX (T) (F)

Thu. & Fri., July 29th – 30th
Austin, TX (T)

Wed. – Sat., Aug. 18th – 21st
Houston, TX (T) (F)

COMING SOON! Chicago, Atlanta & Kansas City

Real Estate Options Boot Camps

Denver, CO

Only $1,995 per person

Thu. & Fri., July 15^th & 16^th, 2004

9:00 a.m. – 5:00 p.m.

Registration begins at 8:30 a.m.

Denver Marriott Tech Center
4900 S. Syracuse
Denver, CO 80237
303-779-1100

To sign up, call our office, or for more information call: 800-677-3253.

~~~~~~~~~~~~

Phoenix, AZ

Only $1,995 per person

Sun. & Mon., July 18th & 19th, 2004

9:00 a.m. – 5:00 p.m.

Registration begins at 8:30 a.m.

Phoenix Airport Marriott
1101 North 44th Street
Phoenix, AZ 85008
602-273-7373

Call our office for more information: 800-677-3253.

Real Estate Options Boot Camps - Tentative

TENTATIVE DATES for more OPTIONS BOOT CAMPS in 2004!

(That means put it on your calendar in pencil and don’t buy your tickets yet!!!!)

August 6^th & 7^th, Miami, FL (T)

August 13^th -14^th

Austin, TX (T)

September

Houston, TX

COMING SOON! Chicago, Atlanta, Kansas City, Wash. D.C. Area

Guest Speakers will conduct some of our 2004 Mini- Seminars. Call our office for the exact list of speakers and personal appearances by Mr. Zick. All of the Options Boot Camps will be conducted by Mr. Zick.

Click here for more information about upcoming Options Boot Camps!

Click here to register for a complimentary Mini-Seminar.

Questions? Send us an email or call Terrie at 800-677-3253.

Mortgage Originator Boot Camp

If you are a part of our Freedom Equity Group/All Fund Mortgage Originator Program you can attend one day training sessions given all over the US and weekly at corporate headquarters in San Jose. Barney’s Mortgage Originator Business Building Boot Camps will begin at the end of summer and are planned for Chicago, Houston and San Diego for 2004. TENTATIVE DATES will be set in July. For more information go to www.zickhomeloans.com and select "Contact Us."

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The Fine Print...

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We will do one newsletter like this one (Advice for the Impatient Investor) and one called the REIT Report (containing Real Estate Education Industry News and a lot of personal opinions), approximately once a month. (However, keep in mind, our newsletters are free so don't get upset if we skip one occasionally!)

Advice for the Impatient Investor has been published for fourteen years (but not in a row). The next issue should be out about July 1st. The next REIT Report will go out on or about August 15th.

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