In this issue:

RealVestFunding.com

• How do you make a deal work?
• COMMERCIAL REAL ESTATE IMPROVING, VACANCY RATES TO DECLINE

ZickHomeLoans.com

• A Second Stream of income

Zick Stuff

• Oil Deals
• More Debt May Raise Credit Scores; Late Payments Drag Them Down

Upcoming Events

• Barney and his associates will be in several locations in March conducting "How to Finance ANY Deal!" Help Days.

RealVestFunding.com

How do you make a deal work?

We recently had a loan request for $5,000,000 on a piece of land appraised at $12,000,000. Since we do 55% LTV loans, no problem.

The borrower was feeling good about herself in that she had purchased a much larger tract for $6,000,000 and this was only a part of the tract, about 30% of the land. However the lender felt the value was only $4,000,000. I’ll bet you can see the problem right away.

But the problem is worse than it would seem. You come to a hard money lender because you don’t want to use cost; you want to use current value.

For example, you buy a $100,000 house for $60,000 and all the lenders on our list of 230 say it is a $60,000 property and they will give you a $48,000 loan. They want to lend a percentage of purchase price, not value for your first year of holding.

Some folks say an easy solution is to buy it in one name, sell it to another name and solve the “get the cash out” problem in the second sale. If anyone comes to you with such a scheme, run. It is called “Fraud.” The numbers work but it is against the law to be wearing so many hats. Said differently, you can not do in two steps what is illegal to do in one.

So here we are. What do we do about the value problem for the person making loan request for $5,000,000? First, we got her more data. Thank heaven we have real working relationships with our commercial lenders. (Good luck with that one with 1-4 family lenders. They are so big and there are so many layers. I doubt you’ll get to know their National Sales Marketing Rep., as Karen and I have with the number one lender All Fund uses. One of the things about good commercial lenders, we, the mortgage bankers, often get to talk to the person making the lending decision.)

Back to where we were...you need to know what all goes in a good package. If you are not getting what you really think is fair, see if an item in the package is missing. With land, an aerial photo is a must. That did the trick to a point. It got us up to a little over $6,000,000.

Now what do we do? The obvious is a smaller loan, about $3,000,000. But I think I should point out, there are other options. For one thing, you can go to the seller that carried the note and say, “Hey, would you like to get a big chunk of money prepaid on that loan you're holding? If you would be willing to carry a small amount of money as a second behind the new first I am putting on the property, we can get you a bunch of money now.”

Let’s say they will carry $1,500,000 as a second. Well that is that much less money that you will have to come up with to release the commercial acreage you will be pledging.

A second idea would be to add in more collateral. The only drawback with this is that will take time to get the lender to also approve the added collateral.

In this case, the borrower was able to do what she wanted to do around $3,100,000, so we closed the deal based on those numbers. I’ve shared this example because I want you to be able to see that a deal is rarely dead as long as you stay creative!

BZ

COMMERCIAL REAL ESTATE IMPROVING, VACANCY RATES TO DECLINE

WASHINGTON (March 16, 2005) – The commercial real estate market is improving and vacancy rates are expected to decline in all four commercial market sectors this year, according to the National Association of Realtors® COMMERCIAL REAL ESTATE SPOTLIGHT.

David Lereah, NAR's chief economist, said commercial markets have gained momentum. "With vacancy rates in all sectors going down, the fundamentals for commercial real estate are improving and investors have been moving more dollars into this asset class," he said. "In fact, we expect vacancy rates to trend downward over the next two years."

In tracking major purchases, commercial real estate experienced a 53 percent increase in transaction volume last year in comparison with 2003; multifamily housing and office properties experienced the biggest gains. For all sectors, commercial investment totaled $181.4 billion in 2004 compared with $118.8 billion in 2003. These figures do not include transactions for properties costing under $5 million.

Foreign investors spent over $12 billion on U.S. commercial real estate last year, with three-fourths of that investment in office property. Real estate investment trusts (REITs) focused on the retail sector, accounting for nearly 14 percent of retail transaction volume.

NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said improvements in the commercial market typically lag an overall economic recovery. "Even with healthy economic growth over the last couple years, job creation really didn't pick up until 2004," he said. "Those jobs have fueled the need for commercial space, so the market is on solid ground and is experiencing a growing demand."

The NAR forecast for four major commercial sectors is based on analysis of data in 57 metro areas tracked, including the office, retail, industrial and multifamily markets. The forecast was produced with data provided by Torto Wheaton Research and Real Capital Analytics.

Office vacancy rates in the 57 markets tracked are forecast to decline to 14.2 percent this year from 15.4 percent in 2004. Office rents should rise by 2.8 percent in 2005, after rising only 0.4 percent last year. Increased absorption of space and a slowdown in the amount of new space coming on the market are improving office fundamentals. Areas with the lowest office vacancies include New York City; Long Island, N.Y.; Ventura County, Calif.; Washington, D.C.; and Orange County, Calif., all with vacancy rates of 11.0 percent or less.

Net absorption of office space, which includes leasing of new space coming on the market as well as space in existing properties, is projected at 61.0 million square feet in 2005, down from 77.7 million last year, but is triple the 20.0 million square feet absorbed in 2003.

In the retail sector, merger activity could lead to some store closings. Even so, the average vacancy rate is projected to drop to 6.5 percent this year from 7.5 percent in 2004. Retail rent growth is forecast at 4.8 percent in 2005, up from 3.3 percent last year. Retail markets with the lowest vacancies include Washington, D.C.; Oakland, Calif.; San Diego; Nashville, Tenn.; and Portland, Ore., with vacancy rates of 3.8 percent or less.

Net absorption of retail space in the 57 metro areas tracked is estimated at 34.9 million square feet in 2005, up strongly from 27.1 million last year.

In the industrial market, demand for warehouse and distribution space has fueled demand across the country. The national vacancy rate is expected to decline to 10.4 percent this year from 10.9 percent in 2004. Industrial rents, which slipped 0.6 percent last year, should rise 0.7 percent in 2005. The areas with the lowest industrial vacancies are Los Angeles; Long Island, N.Y.; Riverside, Calif.; Orange County, Calif.; and West Palm Beach, Fla., with vacancy rates of 6.8 percent or less.

Net absorption of industrial space is forecast at 134.8 million square feet this year in the 57 markets tracked, down from 176.5 million in 2004, but well above a sparse 16.5 million square feet absorbed in 2003.

The apartment rental market – multifamily housing – should see a decline in the average vacancy rate to 6.1 percent this year from 6.2 percent in 2004 as space absorption keeps pace with new supply. Even so, higher homeownership rates are dampening the performance in some areas. Average rent is forecast to rise 2.1 percent this year, following a 1.5 percent rise in 2004. Areas with the lowest apartment vacancies are Northern New Jersey; West Palm Beach, Fla.; Los Angeles; San Diego; and Fort Lauderdale, Fla., with vacancy rates of 3.5 percent or less.

Multifamily net absorption is projected at 238,600 units in the 57 markets tracked in 2005, down from 264,300 last year, but much stronger than the 159,400 units absorbed in 2003.

The COMMERCIAL REAL ESTATE SPOTLIGHT is published by the NAR Research Division for the Realtors® Commercial Alliance (RCA). The RCA, formed by NAR in 1999, serves the needs of the commercial market and the commercial constituency within NAR, including commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and NAR affiliate organizations. These organizations include the CCIM Institute, the Institute of Real Estate Management, the Realtors® Land Institute, the Society of Industrial and Office Realtors®, and the Counselors of Real Estate. The RCA also provides commercial products and services.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

A revised forecast for the housing sector and the economy was released March 14; the next commercial real estate market forecast is scheduled for June 24.

Copyright National Association of REALTORS^®, Reprinted with permission.

ZickHomeLoans.com

A Second Stream of income

We get lots of new people wanting to become real estate investors that do not have a job and do not have a dependable cash flow. I believe that anyone can learn to buy real estate and make profits. It is best used by an employed person that wants to start building their retirement. If you do it long enough, you can learn to earn money so quickly and so easily that you can do it as a full time method of both building a retirement while also making enough to live on.

However, those that want to go from six months unemployed and bills stacked up in the corner to being like Donald Trump need to be more realistic.

I have never sold as well as the dream merchants that over-promise. I am sorry for my family that I never made the millions, just selling materials, which go to those that over-promise and seemingly never get caught. But I sleep well at night and I have millionaire after millionaire say that I showed them the way.

My advice might be less exciting, but it is solid. If you will learn this business of investing, it will take you from an ordinary life to an extraordinary one. It will take you from just getting by at age 60 to cash flows to depend on. And I am positive that you need multiple streams of income to get that job done well and with ease. One technique, one approach, is what is needed to get you started. But at some time you need to look at a second income stream.

I also believe that the more the second stream compliments the first one, the better. And there is no better idea than that of being a mortgage loan originator. With that in mind, I will “hype” this idea to you. Yes, I can hard sell if I know in my heart of hearts it works and is good advice. And we are doing very well, thank you, with Freedom Equity Group.

Would you like to EARN CASH? GET PAID 25-55% (or more!) OF THE POINTS every time you originate a loan for a home buyer or another investor?

Karen Zick and “Barney” Zick are looking for people already active in real estate who want to earn more money with a little additional effort. Many are already earning $3,000 to $10,000 a month in less than six months.

You need to learn about a fabulous opportunity to become a loan originator without all of the hassle of becoming a mortgage banker. And so much of it is done on the Internet!

Just think…every time you place a real estate loan, as an employee of the Mortgage Banker, you get 25 to 55% of the points. (Actually when you go from 45% to 55% you are no longer getting paid for loan origination. At that level, the additional money that would be paid to you at 55, 65 and 70 percent is paid for marketing and supervision of your associates. This is an important distinction in that these sums can be paid to an entity, but more on that later.)

It gets even better! Every time you show a house you have fixed up, you give your prospect a business card that has your OWN WEB SITE on it. When they buy a house from someone else, and use you as a loan source – ANY HOUSE, – you get paid! You could be getting hard cold cash for buyers that WALK OUT ON YOU!

Additionally, if you have buyers, maybe lease option buyers, that need extra income to qualify for a loan to buy your property in the next year or so, you can introduce them to the program and give them the opportunity to sign up. Not only can they possibly earn big bucks, you can get paid additional money when they earn money because you brought them to the company.

And if you partner with someone, you can even get paid doing each others loans! Best of all, you can build an entire level of those that work under you doing loans for you!

The Web site you will get would cost you $10,000 to $20,000 to design. Your total cost for everything is less than it would take to get licensed as a loan broker in Texas…if you could. With our plan, you can get paid on loans all over the U.S.! Back to the Web site…go to mine, www.zickhomeloans.com to take a look at what you’ll get.

If you want to sign up, just go to: www.zickhomeloans.com.  (Or, plan to be on the phone April 4th with Karen during our free monthly TeleHelp call as she walks you through the sign-up process, step by step, while you are on your computer at the same time!

Zick Stuff

Oil Deals

Now and then I get asked questions outside the field of real estate. Here is one that might be of interest. They told me they were looking at an oil deal.

Oil deals come in packages, based on the time line.

Is this:
1. Initial gathering of funds to do an offering and tie up the leases
2. Do you have the leases and raising fund in an Ltd Psp?
3. Are you doing an offset to existing production?
4. Do you have existing productive leases you are trying to sell?

I am not up to date on the oil business but spent several years investing in it. (With a lot of success, I might add.) However, the risk is very high no matter how much you check them out and fraud is as common as people stealing lumber in construction. So where are you?

BZ

More Debt May Raise Credit Scores; Late Payments Drag Them Down

Monday, February 14, 2005 - By Gerri Detweiler

The national average credit score for consumers with debt above the national average is higher than the average credit score for those with debt below the national average, according to a new study released by Experian Consumer Direct^SM. By contrast, another study found that half of all consumers have at least one delinquency on their credit file, and consumers with one missed payment in the last year have an average credit score about 160 points lower than the average of those with no delinquent payments.

The national average Experian PLUS Score^SM for consumers is 677. National and statewide results for the study can be found on the Experian National Score Index^SM Web site. Important findings of the two studies:

• 25 percent of U.S. consumers have debt that is above the national average and their average Experian PLUS Score is 695
• U.S. consumers have an average debt of $11,224 compared to last year’s average debt of $10,024, a 12% increase.
• The average PLUS Score for consumers with debt below the national average is 671.
• 55 percent of U.S. consumers have at least one delinquency on their credit file and 34 percent have a delinquency in the last year.
• The average Experian PLUS Score™ for consumers with one delinquency in the last year is 598 versus 759 for those with no delinquent payments.

"It’s important for consumers to remember that having debt is not always a bad thing as long as they manage it well," said Ed Ojdana, president of Experian Consumer Direct. "They should also assess their finances on a regular basis by checking their accounts to be sure everything is in order before making future purchases."

Consumers should also understand, however, that one late payment can drop their credit score significantly. Even consumers who pay their bills on time may be surprised to learn their credit has been damaged by overlooked payments, or collection account for items such as unpaid medical bills, cell phone bills or parking tickets. Simply paying those bills off, however, may not raise their scores.

More information about this study, plus credit data at the state and local level, can be found on the Experian National Score Index site at www.nationalscoreindex.com.

Gerri Detweiler (gerri@ultimatecredit.com) is the author of numerous books and articles on credit, including The Ultimate Credit Handbook (Plume, 3rd edition, 2003). She has been interviewed in thousands of news stories on credit related topics, and has testified before Congress on consumer credit legislation. She offers loan originator training on credit scores at www.TopProducerSeminars.com.

Reprinted with permission of Originator Times at www.OriginatorTimes.com.

Upcoming Events

Barney and his associates will be in several locations in March conducting "How to Finance ANY Deal!" Help Days.

Saturday, March 19th, 2005

If everything you thought was true was not, how long would you want to wait to find out? There are myths about what to do and not do on the road to financial success...most people have heard the wrong story.

Barney and his associates will discuss the following during the "How to Finance ANY Deal!" Help Day:

Private Money -- Cash loans and how to get them. We can show you how to get 8, 9 and 10% loans from friends, co-workers and associates. You can show them where to get the cash when they thought they did not have any. Open the doors to get, easy-to-pay private loans.

Options -- It is no secret that fortunes have been made by those that know how to use real estate options. Now, details of those financial maneuvers are explained. Barney Zick will show you how to acquire immediate cash profits, cash flow and control your future wealth through OPTIONS!

Hard Money Loans -- There is a national network of people who will loan based only on the value of the property and not care (relatively) about your credit! They close in days, not months. They loan on future value in some cases. If you don’t know this world, you need to get connected. This is one of the most often used but seldom talked about sources for the pros. And we will tell you where YOU can get the money too!

Cash Financing -- Hard money loans, when and where to use quick cash lenders and how to negotiate terms.

Conventional Loan Financing -- Recently, Karen Zick (my wife and life partner) closed five loans for real estate investors that ranged from nothing down to payments that started at a 1.95% payment factor! And next week she will do five more! Learn about the seldom discovered source for investor cash…conventional loans. Learn what they will take for down payments and how to structure a zero down deal that will close. Learn how to get past seasoning and other possible road blocks. You will also find out how you can be paid when you show a house to 20 people and no one buys. You can get paid for getting the next loan for whatever they do buy. Open the doors to the multi-billion dollar world of cash to allow you to get your money out and re invest again. How the application can kill or slow your deals. How to build a second stream of income as a “loan originator” and get “insider” control of you own loans with industry knowledge.

Owner Carried Financing -- Everything about the art of taking “subject to” to the smart structure of note, from Nothing Down to No Payments and No Interest!

We hope you can join us! The retail price of this event is $695.00. We are offering it for a special student discount price of $149.00 for the entire day! If you are Barney Zick's student and have purchased materials including attendance at an event, please contact us at the office by calling  800-677-3253 or simply send an email to reitbootcamp@kingwoodcable.net to determine if you qualify to attend for free!

The Los Angeles event is available from the Real Estate Investors Club of Los Angeles (REICLA) at a special discounted price for members only. Students affiliated with REICLA should contact their group for enrollment information.

If you are a guest of Wright Thurston, you must register to attend a Help Day by replying to the pre-paid invitation email he sent directly to you.

Register now for Houston!

Register now for Los Angeles!