I just got off the phone with John McKinley at Security National Mortgage and he shared with me this cool little formula.

If you want to do a quick calculation to know what is the max amount you should buy an investment property for, especially when using a hard-money loan, this is what you do:

MAO = (ARV * 70%) – closing costs – repairs

ARV is After Repaired Value — how much the property will be worth after it’s repaired.

When you do a hard money lone on a house less than $100,000 you are going to pay about $10,000 in closing costs between the first and second loans.

As an example, suppose you are thinking of buying a property with the following parameters:

ARV = $85,000

Closing costs = $10,000

Repairs = $7,500

The MAO [max you should offer] is (85000*.70) – 10000 – 7500 = $42,000

Isn’t that cool!

Del and I are building a new web site http://delwalmsley.com. We want to teach people all over the country about living better and balanced lives. Which of course includes financial independence, and physical fitness, and relationships, and all the things we need our lives balanced in.

Check it out as we build it and let me know what you think.

Had a great interview with Brant Phillips about flipping houses, which I’ve never done, and was curious about. He taught me much and will teach you too.

Listen here:

http://eyesoninvestors.com/brant-phillips/

Yesterday I sent an email to 2,400 of our Houston members and asked, “What is your biggest investing challenge?”

This was an open ended question so I summarized the response and grouped them into categories.

Here is the breakdown which I think you will find interesting:

- 56% said financing or getting funding

- 7% said estimating repair and operating expenses accurately

- 4% said evaluating properties correctly

- 4% said fear

- 4% said finding a good vendor

- 2% said the following: accounting, finding buyers for wholesale deals, finding deals, multi-family prices, lack of knowledge, convenient location, making jump to multi-family, and multi-family financing.

If you are having a challenge getting financing listen to my interviews with Quincy Long and Darel Daik.

And if any of you can propose how Lifestyles Unlimited can help you get financed, let me know. I’m looking for either things we can teach or perhaps even a loan product.

I talked with Darel Daik who owns 8 of his own investments and also owns Noble Mortgage. During the course of the conversation he explains that getting loans is just a bit easier, the lenders are easing their requirements.

Here is the interview: http://eyesoninvestors.com/darel-daik/

Quincy Long and I talked about how we can get loans for investments when we don’t have enough of our own capital.

Here is the interview: http://eyesoninvestors.com/quincy-long/

If you are interested in doing wholesale deals to build cash to buy properties, listen to my interview with Chris Funk over on Eyes On Investors.

It’s exactly what he did and he explains it all. Very informative.

http://eyesoninvestors.com/chris-funk/

This interview Matt did with me rocks. He’s a real estate investor super-star and took the time to share profound insights into how we can make money in the new economy.

Matt advises private equity groups who have raised more than $1 billion to buy distressed multi-family assets. He has bought and sold numerous properties since the 1990’s. And he has authored 3 bestselling books on real estate investing.

In this interview you will hear Matt explain what has changed in real estate investing, the economy, and financing, and how to embrace the changes so you’ll be successful.

http://eyesoninvestors.com/matthew-martinez/

Quest shows how much wealth you are building in a field called Unrealized Capital Gains.

This is not equity! It’s quite different so please take just a minute to understand what capital gain is.

Capital Gain is the difference between what was paid for the asset (the basis) and what was received when it was sold (amount realized). The unrealized capital gain is simply the capital gain before the asset is sold, in other words it hasn’t been actualized or realized yet.

To help remind everyone the difference I’ve added some notes to the Cash Flow Calculator in Quest, so now it looks like this:

If you want more details on how capital gains is calculated and used read this article on eHow.

Inspired by Seth Godin’s post reviewing what he shipped in 2010, I created a list of what I shipped. It’s hard to share a list like this. It’s been helpful to recognize how much was accomplished.

What I shipped and helped ship in 2010:

- lifestyles education site (http://lifestyleseducation.com)
- 2 day seminar online
- 2 day seminar training of additional presenters
- new student manual for 2 day class
- purchased another SF property
- eyes on investors site and interviews (http://eyesoninvestors.com)
- lu realty advisors web site
- numerous hub enhancements
- new LU marketing strategy
- new LU web site
- completely revised the property evaluation class
- rewrite of Quest
- rolled Quest out to nonmembers then retracted it 3 months later
- added hard money calc to Quest
- published book Financially Free