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BrokerIPTV: Today we are talking with Chris Lattimer, President of the Lattimer Group. Chris, welcome to the show. Glad you are here.

Chris Lattimer: Thanks Dan.

BrokerIPTV: Tell us what the Lattimer Group does?

Chris Lattimer: Well, we are a real estate investment company and we work with investors to pool resources together and invest in real estate. Our main objective is to offer investors preferred returns and then to meet or exceed those expectations. Currently, today we have got three strategies that we like to invest with. First is multifamily properties, acquiring existing properties, looking nationwide for emerging markets. Second, we like the transit oriented development concept. Then last, because there are a lot of great bargains out there in the single family home market, we are looking to get medium priced homes at 70% of market value and we like the exit strategy of lease options.

BrokerIPTV: Oh, really? How long on that lease option?

Chris Lattimer: We are figuring we are going to need a good year. Well, a couple of years, but I think we need about a year to see some nice recovery in the market and the sooner we can get out of these options, the better. The one thing, the one big factor there is is the financial markets.

BrokerIPTV: Since you brought up the topic of recovery, I mean are you starting to see Colorado, Denver starting to stabilize or maybe... the question everybody has is have we hit the bottom?

Chris Lattimer: Yeah, it's an interesting question, because there is a national question and there is a local economy question.

BrokerIPTV: Correct. Yeah.

Chris Lattimer: As a real estate investor, the local economy is definitely factor and the Denver market is looking really good.

BrokerIPTV: Okay. Now, who are you targeting with this information? I mean what's the demographic of your customer?

Chris Lattimer: Well, it is more of why we are targeting. It is really we are looking for these markets so that we can acquire assets within these markets and be able to see the appreciation of our asset within this appreciating market as for the benefit of our investors.

BrokerIPTV: So everybody who is watching is saying, Chris, tell me one of those emerging markets right now? They want some free information? [laughter]

Chris Lattimer: And we tried a couple, in the first phase markets that we are looking at, but I don't want to mention those quite yet, but in the fourth phase, there is a really good market, it is Boise, Idaho.

BrokerIPTV: Oh really?

Chris Lattimer: Yeah. It is a great market. It has been relatively unaffected by the recent downturn and it has been emerging, that's why it is in the fourth phase. It has been emerging for a couple of years now, but we feel, there is still a lot of... a good couple of years left in that market. The main thing that is driving that market is technology, businesses - technological businesses are coming into area driven by a highly educated workforce.

BrokerIPTV: Let's take Boise for instance. Say I want to go invest over there. What are my benefits, what are my risks?

Chris Lattimer: Well, the benefits are that if you are looking at the conditions nation wide, the economic conditions, you are able to get into an appreciating market. So, you want to put your money into a market that is appreciating, that's the benefit. The risk is you have an out of state asset, so you have to... particularly, if they are multifamily, we are diligent about having good property managers in there and then staying on top of those property managers to manage this out of state asset.

BrokerIPTV: Chris, great information. Thanks for being with us. Appreciate it.

Chris Lattimer: Yes. Thank you.

Posted in Headlines, Real Estate Investing

BrokerIPTV: Today, we are talking with Chris Lattimer, President of the Lattimer Group. Chris, thanks for being with us, appreciate that.

Chris Lattimer: Thank you Dan.

BrokerIPTV: Quickly again, the Lattimer Group does what?

Chris Lattimer: We are a real estate investment group that pools resources working with investors, so that we can invest in real estate. Our main objective is to offer preferred returns and then meet or exceed those expectations. Strategies that we like to use today are multifamily properties in emerging markets. Second is transit orientated development. Then finally, discounted single family homes.

BrokerIPTV: I want to focus in on this segment is TOD, Transit Oriented Developments; tell people what a TOD is?

Chris Lattimer: Yeah, TOD - Transit Oriented Development is development thats located within a certain proximity of transportation, public transportation systems, hubs or stops.

BrokerIPTV: Like a light rail.

Chris Lattimer: Like a light rail, yes.

BrokerIPTV: Okay. What specifically does your group do with TODs?

Chris Lattimer: We are really excited about the Denver metro market. The RTD FasTracks coming in, due to be completed in 2015. So, we are looking within a half mile radius of the future stations and we like urban infield, mixed use, high density development.

BrokerIPTV: So, are you talking to your investors now about purchasing land or properties in these areas where RTD FastTracks is going to be completed? Is that kind of the thought?

Chris Lattimer: Yes, absolutely. With the projection 2015 completion, it's actually a really good time right now to get in and get in before there is speculation, give us enough time to go through the entitlement process, get the construction completed, and up and running by time the trains are running.

BrokerIPTV: Now, this must be attracting a lot of attention with the price of gas. I got to believe that the public is getting more and more aware of public transportation and housing in relation to public transportation?

Chris Lattimer: Yeah, high gas prices is part of the number one driver for the popularity of TOD, there is big popularity, and there is big demand for this type of development. A couple of other factors that are driving the demand is global warming and just traffic congestion. I think people are getting really tired of traffic congestion, which is being spurred by the lack of funding in our transportation systems today.

BrokerIPTV: Now I hear more people are using mass trans than ever before. I mean you just turn on the news locally and you hear the problems of RTD and what RTD wants to do and expand. Are you hearing that the same?

Chris Lattimer: Yeah, absolutely. I read an written article last week, that most of the metropolitan area transportation systems have seen a significant increase in ridership in the last year. So, it is definitely increasing and I see that trend continuing.

BrokerIPTV: Okay. Thanks. Appreciate it.

Chris Lattimer: All right. Thanks Dan.

BrokerIPTV: Good information.

Chris Lattimer: Alright.

Posted in Headlines, Real Estate Investing, Real Estate Industry Trends

Alternatives to foreclosures, short sales and land trusts

Mark Eibner BrokerIPTV: Well, we are here today with Jonathan Goodman with Frascona, Joiner, Goodman, and Greenstein and as always John, it is a pleasure to have you here in BrokerIPTV.

Jonathan Goodman: Thank you Mark.

Mark Eibner: And one of the subjects I called you up to talk about... we all have heard a lot of things about foreclosures and what I am really seeing a lot of as a broker is short sale transactions or short pay off transactions and I know all the brokers have heard about them, but maybe you can explain to us really what is a short pay off from legal lingo? What is a short pay off transaction?

Jonathan Goodman: Right. Well, the concept of a short pay off transaction is that a property has mortgages against it and the amount of those mortgages exceeds the property's value. There are some sellers who when that property sells, they can bring money to the table to makeup the shortfall, but very few and lenders recognize that sometimes it is in their best interest to take less then they are owed and still release the liens off the property, so that is what a short pay off is.

Mark Eibner: So what do you think... what is the real reason lenders are doing this? I mean, ultimately what are we getting at here?

Jonathan Goodman: Lenders do these things because they figure it is their best bad alternative. Of course, they have the option of foreclosing on the property, paying a lawyer, waiting the four or five months or so process while it goes through the foreclosure, then holding it, having holding costs, selling it to the market, but it is a way for a lender to cut its losses and get cash now. The idea is it is better to take your first loss early, take less now, save a bigger loss later.

Mark Eibner: So, let us talk about the next item here that is coming up with short sales and that is the short sale promoters. The promoters are out there saying that they can close your short sale transactions, they could bring investors in, and they use land trust. Why don't you explain to us how that works

Jonathan Goodman: Okay, there are two things that are going on. One thing that is going on is that traditionally a lot of the hard work putting a short sale together has been performed by the listing broker for the seller and there are service providers out there that are holding themselves out as short sale experts and they try and relieve the listing broker of the chores, the hassle, the brain damage of putting the short pay off together. They have contacts with the lenders and the like and they off load that stress from the listing broker. So, I would call them short sale service providers, but then there is another phenomenon, which is more normal and that is our promoters have short sale transactions that are setting them up as two stage transactions. So, the way it works, in my lingo, there is a homeowner, a seller A, the promoter is B, and B puts a property under contract with A at a certain price; let us say $200,000 and what B is trying to do two things at once. One of the things they are trying to do is try and get A's lender to accept the proceeds from that $200,000 sale in satisfaction of the debt. Simultaneously B is trying to find a buyer...I will call them the ultimate buyer or C to flip the property to. The idea is that B doesn't actually close and take title to the property from A until B finds a C. When B finds a C, the money comes in from C and it funds B's acquisition of the property from A. So, if B buys from A for 200, then B tries to find C to buy it for $230,000, and B gets that $30, 000 markup

Mark Eibner: Wow. So, not that there are lot of advantages for the seller to begin with on a short sale transaction... what are the pitfalls for a seller in this circumstance?

Jonathan Goodman: Well, one pitfall for the seller in this circumstance is that if B is finding C who will pay 230, what it means is, is that really if B had been working with A, working for A, then B could have found C for A to sell for, for 230. The point is that the A, the homeowner, is losing out on a sale for 230. Now, even if the property sells for 230, the A would not get anything from that sale, right? I mean that is the essence of a short sale transaction. The seller does not net anything from the sale. However, that $30,000 extra would reduce the lender's losses and therefore reduce the seller's post closing deficiency liability and potentially reduce their forgiveness of indebtedness tax consequences.

Mark Eibner: All right. So, then on the other side, what are the pitfalls for the investor, the promoter, the B buyer or B seller?

Jonathan Goodman: There are several pitfalls. First of all, there is a lot of people out there including regulators who do not like these transactions. They feel like A is being ripped off. A is not realizing the full value of the sale of the property. If the market will pay 230, A should realize the benefits of that. There are also people who think that A's lenders are being misled. They are being ripped off by $30,000. There are also people who think that C's lenders are being misled; because lenders are skeptical of flip transactions and instant appreciation and like. So, if these things go bad, if for some reason in this transaction, if somebody is unhappy in this transaction or shows up on the radar screen of regulators, people are going to be pointing the fingers of blame at the promoters, B.

Mark Eibner: So what happens when you have... I have seen a lot of these seminars where they are actually recruiting brokers to recruit other brokers for their promoter to talk to the A's of the world?

Jonathan Goodman: Right. I advice my real estate broker clients that they do not want to be the listing broker for A. If you are the broker for A, you have duties to A and A is not selling the property for as much as the market will pay; that is proven by this transaction. It is proven that the market will pay in my example 230 and A is not reaping the benefit of that. So, if I am a real estate broker or if I am advising a real estate broker, I say you do not want to be the listing broker for A. I am also saying to real estate brokers, you do not want to be the buyer's agent for B; because even if you are buyer's agent for B, you have certain duties to the seller. You have the duty to disclose adverse material facts of which you are aware and I think the fact that B is flipping it for a $30,000 profit is arguably something that has to be revealed to A. What I advice real estate brokers are if you are going to be involved in these things at all, you want to be as far away from A as possible and what that means is being the listing broker for B, trying to find C or there is nothing wrong with being the buyer's agent for C trying to buy it from B.

Mark Eibner: Wow. So, I mean in a quick sense or two what is the right way? What is full disclosure? I know we have talked about fraud, where it has to be in the contract, it has to be in the HUD, has to be disclosed to the broker... I mean the same type of guidelines that have to be followed?

Jonathan Goodman: Yes, essentially. I mean, in order for A not to be defrauded; if A signs off on paperwork which says B's goal is to get this under contract and not close until B finds a C, and B will sell it to C at a markup, and B will pocket that markup, then A is making a choice. The A's of the world are also making the best... choosing the best bad option that they have got. The A's of the world are choosing between just abandoning the house, letting it go into foreclosure, deeds in lieu of foreclosure or short pay off, and a two stage short pay off might be the best bad option that they have. So, A has the to fully understand what is going on.

Mark Eibner: Okay. Oh, great John.

Jonathan Goodman: Okay.

Mark Eibner: It is always a pleasure. Thank you very much.

Jonathan Goodman: Thank you Mark.

Posted in Headlines, Real Estate Investing, Title Insurance, Foreclosure, Real Estate Industry

Amy Sheflin talks about using your IRA to purchase real estate and grow your wealth

BrokerIPTV: We are talking today with Amy Sheflin from The Entrust Group and Amy thanks for being with us, appreciate that. Tell me a little bit about The Entrust Group, what do you do?

Amy Sheflin: Well Dan, The Entrust Group was founded in 1981, so we have been around for over 25 years now. We are a nation wide network of 30 offices across the country and we are a self directed retirement administrator. Now, what that means is that we allow people to invest their retirement plan in anything that the IRS allows. So not just securities, not just stocks, not just bonds, but also go bullion, private stocks, and real estate.

BrokerIPTV: Okay. So, we are talking about maybe some alternative ways today in which you can use your retirement to buy real estate?

Amy Sheflin: Absolutely.

BrokerIPTV: All right. Give me an example of how I would buy real estate with my 401k?

Amy Sheflin: Okay. The first step is to call the person who currently administrates your 401k plan. You need to ask them if they allow you to buy real estate with your 401k.

BrokerIPTV: Some do and some don't?

Amy Sheflin: That is correct.

BrokerIPTV: Okay.

Amy Sheflin: So 99 times out of a hundred the answer is going to be no, and that is where Entrust comes in. So, the first thing you need to do if you would like to buy real estate is create a new retirement plan, one that allows you to hold real estate, roll that same money over into that new account.

BrokerIPTV: Is there penalties for doing that?

Amy Sheflin: Absolutely not.

BrokerIPTV: Okay.

Amy Sheflin: It still retains all of the tax deferred advantages of your previous retirement account and that is when the fun begins, that is when you get to go shopping.

BrokerIPTV: Really?

Amy Sheflin: That is when you head out on the market, find that property that is going to make the right deal to help you grow your wealth as quickly as possible. Definitely call our office if you happen to be using us. It is good to just keep yourself educated along the way. There are a couple of things you need to be aware of: for one, you are not buying the property personally. Your retirement plan is buying it. So, from the time that you write that escrow check, make the offer, sign the paperwork, right from the beginning that needs to be the way that it is set up to keep that tax deferred protection in place.

BrokerIPTV: All right. Can this be done with any type of retirement account - Roth IRA, SEP?

Amy Sheflin: Absolutely. We can accept rollovers from any type of retirement account. The important thing to remember is if you are starting with a Roth, you want to open a self directed Roth because you have already paid the taxes on that and you don't want to do it again.

BrokerIPTV: How many people are doing this right now?

Amy Sheflin: I can't give you an exact number on that. What I can tell you is that it is the fastest growing segment of the IRA investment industry. The Entrust group has over 21,000 accounts now and over three billion in assets, so a lot.

BrokerIPTV: Amy, thanks. Great information. I really appreciate it.

Amy Sheflin: Thank you Dan.

Posted in Headlines, Real Estate Investing