Do you ever lie?

No, I’m not talking about lying to the tax man, lying to your boss, or even lying to your spouse (shame on you!) I’m talking about something potentially much worse.

Lying to yourself.

Most of us do it all the time. We tell ourselves one thing, and try very hard to believe that. Really, Brandon, it’s okay… that extra hot peppermint hot chocolate from Starbucks isn’t going to mess up your diet… it’s such a small drink anyways…

Can you identify?

However, while lying to yourself about nutrition might be bad – lying to yourself about your real estate investing might be even worse. As an investor, I know I’ve done this multiple times and I’m not proud of it. However, I’m slowly learning my lessons and learning that the best way to succeed is to tell the truth, the whole truth, and nothing but the truth when looking at a real estate investment.

This post is going to look at 3 big lies that new investors tell themselves, and how you can learn to overcome these lies to succeed in real estate. Let’s get started.

1.) “I Don’t Know Enough”

Education is one of the most important steps you can take as a beginner investor which is why we released “The Ultimate Guide to Real Estate Investing” for free to everyone who wants to read it. Since coming out, this online book has been read by tens of thousands of people, helping people learn the first steps needed.

However – many new investors stay in this phase indefinitely, believing they simply don’t know enough to get going. However – it’s not a lack-of-knowledge that stops people.

It’s fear.

The truth is – no one knows “enough.” This is a learning process for our whole lives. I’m sure even Donald Trump is learning new things every day!

Don’t lie to yourself – if you’ve read the books, interacted on the forums, and read the blogs here – you probably know enough to at least take the next step. For advice on getting moving past this education, check out “The ONLY Step You Need to Get Moving in Your Real Estate Investing” or “How to Start Wholesaling: Getting Past The Education and Into the Field

2.) “I Know Everything!”

On the other end of the spectrum is those who feel they have it all figured out.

They’ve read a book (well … skimmed it) and they watched a couple episodes of Flip That House so they are ready. They don’t need to talk with experienced investors about their plan – heck, they don’t even need a plan. It’s easy – they got this.

While it’s dangerous to stay in fear for your whole life -it might be more dangerous to venture out in the world of real estate investing with no knowledge and just passion.

I talk with a lot of investors who are really excited to get going – and they are making offers on properties and trying to push forward – but don’t understand the basics. If they are lucky enough (or dumb enough) to actually land a deal – they probably are not going to succeed. There is a balance that these investors refuse to believe.

Don’t lie to yourself – you need to learn the basics. Go slow and steady and invest at your knowledge level.

3.) “This Deal Is Great!”

Most deals are not great.

Many investors look at a property and instantly think it’s a good deal just because it’s ugly and has the word “REO” in the property description. Excitement sets in and the lies begin.

“This only needs paint and carpet!”

“Everyone says it’s too much work… but I can do this easy!”

“This project will only take a few weeks to finish!”

As I said – most deals are not good deals, and most projects take more time and more costs to complete. You need to be honest with yourself on this. Will it really be that quick? Does it really only need that much work?

Before you go out and try to invest in a piece of property, it’s important that you are conservative in all your numbers and liberal in all your time estimates. I generally recommend that new investors double the amount of repairs costs they think a project will take, and double the timeline they plan on completing the project in. This could be for flips, buy and hold, commercial, notes, whatever.

Don’t lie to yourself about the numbers because the numbers don’t lie. (Click to Tweet This Quote!)

How to Overcome Your Own Lies

So how do you deal with these lies? When we’re lost in the moment, filled with excitement and anticipation, what’s the best way to stay grounded?

It’s actually quite easy – reach out to other seasoned investors.

Really, it’s that simple. Talk with several experienced investors about your deal. Often times investors are afraid to ask for other’s opinions because they don’t want to be shot down.

However, if you are asking several seasoned investors for their opinion on your deal, and you are met with criticism on those deals, assume that you probably have been lying to yourself.

This is one of the largest benefits of the BiggerPockets Forums. Go post your deal details and ask what people think – and then listen. They’ll tell you whether the deal is worth pursuing or worth dumping. Listen to them!

What about you? What lies have you told yourself as an investor? Or what have you heard other investors tell themselves? Let me know under this post in the comment section!

Photo: Michiel Jelijs

The post 3 Lies New Investors Like to Tell Themselves is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

When the Foreclosure Era began in 2006, Sean O’Toole had spent five years buying and selling California foreclosures. He had a ton of foreclosure data so he shelved plans to start a general property listing site and launched one in 2007 devoted entirely to foreclosures, providing data from public sources exclusively, ForeclosureRadar, which became popular with investors in California and Sean became a national media favorite. Today Sean has created a new site, the site that he intended to start initially back in 2007 – PropertyRadar which does for all properties what ForeclosureRadar does for foreclosure, providing investing professionals with the data they need across all property types.

Sean left no doubt about how he viewed his mission when he wrote, “The foreclosure process has been shrouded in darkness for too long. Get-rich-quick gurus and disreputable list peddlers have thrived in this darkness, manipulating consumers and real estate professionals alike. People who needed help were hard pressed to get it. We are ending this.”

I wanted to speak with Sean today and get his opinion, from his unique position, on the current state of the US Housing Market.

The Interview

You had a driver’s seat in the whole Foreclosure Era, maybe more so than anyone in the whole country. Looking back on what foreclosure did to housing in America, what’s the takeaway? How did those six years of distress sales changing housing in America? What are the good things and the bad things?

I think the most surprising thing to me is that anyone would think foreclosures caused anything in housing. Foreclosures did no damage to our markets. What did damage was excess credit, excess lending. Foreclosures were just the result. People keep looking at foreclosures as the disease. They are just the symptoms.

We’re making the same mistakes now that caused the so-called foreclosure crisis. We’re putting people into loan modifications that are far worse that the worst of the worst pay option ARMs, yet we seem to think they are a solution.

The other thing that drove prices up to a point of being unsustainable was pay option credit, and look at what we are doing to interest rates. We are driving interest rates lower and lower and lower, creating artificially higher prices, but is a 3 ¾ percent on a thirty year mortgage really sustainable long term? Should government be subsidizing those loans?

In some ways, we are in a less healthy position now than we were in 2007. The bigger surprise to me is that nobody learned anything from that, and instead, we are taking away lessons that are worthless. For example, people point to the fact that we made “pulse” loans in 2007, meaning anyone with a pulse got a loan. That was absolutely the worse time to give anyone a loan, not just somebody who had a pulse. We were lending at unsustainable high prices. Yet, at the bottom of the market, when prices were so low you could have done 100 percent financing to somebody with bad credit and never lost a dime, it was very, very hard to get a loan. The problem with making pulse loans in 2007 wasn’t that people couldn’t qualify, it was that the price was too high.

But that’s not the lesson we took away. The lesson we took away is that we had to drop prices because we made loans to people who couldn’t qualify. We had to drop prices because they were too high to be sustained by the incomes of the buyers.

When you talk to people about their expectations, they end up saying they need to get back to where they were in 2005.

Where they were in 2005 was really, really unhealthy for our economy. When you put that much on a house, our incomes nationally need to double to be back to those price points with a healthy economy. That said, we’re trying to get back at those price points with unsubsidized lending, unrealistic loan modifications and other band-aids that fail to see the real problem, which is that those prices just aren’t affordable by the income we have.

Small investors have mushroomed and they are still growing in numbers today. Do you see them surviving? Will investor small or large continue to account for 20 percent of home sales?

Why investors came into their own in California and other markets when they did is because real estate was actually a good investment. What I think the National Association of Realtors and others have missed is that lower prices actually make real estate a better investment, not the other way around. If they don’t understand real estate investors, they are making a fundamental error because we are never going to have more than two thirds of the country as homeowners, not on a long term sustainable basis. It just doesn’t make sense. It doesn’t make sense to own a home for two or three years. It’s a poor investment decision. You may get lucky through artificial appreciation in a two to three year period, but anyone who is planning to move or has a short-term job, they should be renting.

So do you think that the numbers of small investors will return to the level of 2007 or 2008?

What we’re seeing right now is a rise in price. In California, we are certainly pushing the bounds of what is possible, and maybe a little beyond that. Buyers do what buyers have always done, which is buy as much house as their banker tells them. They did that in 2007 and they do that today, and that’s what prices reflect.

The other thing that prices reflect when the bankers aren’t out of control as they are now and they were in 2007 is they reflect the return on investment. Hedge funds came into all these markets across the US in a big way because they realized return on investment was too high. Sacramento, Riverside you could buy houses with 10 percent return on investment all day long. So they came in and pushed prices up dramatically very quickly because they realized they should back up the truck until return on investment was below seven, in which case they should stop.

So coming back to your question about investors as a share of the market, as prices go up, return on investment goes down. This year I expect to see prices go up and return go down. Return on investment and affordability are closely linked. It really comes down to income, affordability and what a person can pay for rent.

People got confused that investment is appreciation. That that’s where you get your return on investment. The real source of return on investment is return on rents.

The post How Healthy is the Real Estate Market? An Interview with Sean O’Toole – Round Two is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

Recently some posts have referred to the Dalbar annual study of investor behavior. I have been following this annual report since its inception and thought I would add my thoughts about it here.

The Dalbar Audience

In order to understand the report first one must take a look at its intended audience. This report is a proprietary illustration sold to the financial planning industry. When you purchase this report, they will brand it with your name, company, etc. It is intended for investment advisors to send out to clients. So at its base it is a marketing piece. Despite this, it does have some interesting data in it. However, the conclusions it was designed to illicit are not necessarily the interesting part and in my opinion are only a partial explanation of what the study demonstrates. This year was an interesting twist in that the report spent much time describing what it calls “allocators,” which are really active investment advisors and funds that allocate capital between different classes of investments. In practical language most of these advisors or funds divide the capital between different mutual funds [bonds, equity, international, industry specific, etc.]

The Top Line Numbers

This year, as it does every year it reports investor performance compared to the performance of stock indexes. I will only use the 20 year data, as anything less adds in noise of short term movements. The indexes they use are the S&P 500 and the Barclay Aggregate Bond Index. For the 20 years ending in 2012 they report average annual returns of 8.21% for the S&P 500 and 6.34% for the Barclay Bond Index. Average investor returns were 4.25% in equity funds, 2.29% in asset allocation funds, and .98% in fixed income funds. So the underperformance for those that were in equity funds was 48% or 3.96% annually. It was even worse for those in asset allocation funds [that generally mix stocks and bonds] and fixed income funds. I will let those numbers sink in a little.

Why the Underperformance?

This is where the analysis in the Dalbar report shows its bias. According to Dalbar the investor results are such because of “bad” investor behavior. For the first time they talk about poor “asset allocators” as part of the problem too [they add that sometimes the asset allocator is the investor]. While there is some evidence of investor behavior creating some of the underperformance, it certainly is not anywhere near the whole story. They present fund retention rates [how long an average investor remains in any particular fund] and they are eye popping numbers. Currently, retention rates have rebounded to 3.7 years!. Retention rates peaked at 4.2 years in 2004-2005-2006, dropped to 3.1 years in 2008, and then starting rebounding to its current 3.7 years. The 20 year average is 3.3 years.They point out that these time periods aren’t long enough to take advantage of the benefits of investment markets.

What the report leaves out is the sequence of return issue. The fact is that when markets go up, the individual investor does close to the index returns. Where the real issues occur is when the market goes down. Investors make their mistakes mostly in down markets [as well as many of the so-called asset allocators]. But even more important is the sequence of returns and when the investor makes their investment. In the Dalbar study it points out that the average investor does better than the systematic investor applying the dollar cost averaging strategy; 33% better.

Sequence of Return Risk Revisited

I have written on sequence of return risk before, but this takes that analysis further.
To demonstrate the reasons we take an exaggerated example. Suppose the stock market doubled in year one and then stayed flat for nine years. Over the 10-year period, the market return is 7.2% a year (“rule of 72″). If an investor invested $1,000 every year in an index fund that exactly matched the market, the investor would have $11,000 at the end of 10 years. Only the first $1,000 doubled. The other $9,000 had a zero return. As a result, the investor’s dollar-weighted return is only 1.7% a year for 10 years.

The big difference between the market’s 7.2% per year return and the investor’s 1.7% per year dollar-weighted return isn’t caused by any performance chasing or bad market timing. The investor is just faithfully investing in an index fund for the long term. When the market did well in year one, the investor simply didn’t have much money invested to catch the good return.

Now suppose the stock market stayed flat for nine years and then doubled in year 10. Over the 10-year period, the market return is still 7.2% a year. If an investor invested $1,000 every year in an index fund that exactly matched the market, this investor would have $20,000 at the end of 10 years, resulting in a dollar-weighted return of 12.3% a year for 10 years. It’s higher than the market return because in the year when the market return was high, the investor had $10,000 invested versus only $1,000 invested in the previous example.

Depending whether the market had higher returns in the beginning or in the end, investors are seen either as dumb or smart even when they made no effort to time the market.[Thank you Henry Sit, "The Finance Buff" for that example].

So our investors over 20 years are suffering from the fact they had more money invested in the last 10 years of poor index performance than the first 10 of great performance causing some of the overall underperformance.

Market Variation is the REAL VILLAIN

What all those financial advisors [asset allocators] haven’t come to terms with is the implications of market variation. The market has dramatic down drafts on average twice a decade, and it has long term bull and bear markets that last on average 20 years [but this is highly variable too]. This high variation does little damage to institutional investors with long investing time spans, but creates extreme risk with the average investor that has 20-30 years of real investing time. Dollar cost averagers underperform those that don’t invest systematically despite the academic theory that they will over perform market timers.

Nowhere does the Dalbar paper discuss real reasons why the average person is in specific funds for less than 4 years. The vast majority of people invest in their companies 401K plans. So when they move jobs or get fired [usually in a recession] they need to move their money into their next companies plans or access money to make it to that next job. People are sold using the average rate of return charts that seem to indicate constant upward movements and most aren’t mathematically astute enough to understand that average rates of returns do not adequately express how much your money is growing [compound returns are needed]. So it is not surprising that some, perhaps a majority of folks are not psychologically capable of withstanding long term bear markets especially the mind numbing market crashes that occur during them.

Sequence of return risk is the hidden secret of the mutual fund industry and you will be well served to fully understand its implications to your retirement investing. You should now understand that by simply complying to dollar cost averaging strategies or simply being consistent serial investors are not the panacea that their proponents proclaim.

Photo: kenteegardin

The post The Dalbar Studies is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

I remember the feeling. Finishing the last question on my exam to qualify for my real estate salesperson license, and hitting “Submit”. Moments later, I felt the great sense of relief finding out I had passed. But, now what?

I know there is tons of debate on whether or not you should get your license as an investor, but I’m not going to argue that point in this article. Let’s just assume that you are on the side of the debate that believes it ‘is’ worth it.

I also want to mention that things may be a bit different from state to state, however, I believe the overall arching concept is true. In the state of Michigan where I have my license, after passing the exam….

The very next thing you need to do is find a “sponsoring broker”.

What is a “Sponsoring Broker” in Real Estate?

This is a person/company who has their broker’s license. They essentially, for lack of a better description, bring you under their wing and take on responsibility for you. If you screw up and so something stupid, they are going to hear about it. Because of this liability and risk, these are also the people who you need to pay in order to have sponsor you. Sorry, they don’t do it out of the goodness of their hearts. How much are they going to charge you?

(Side note: I’ve seen the term “broker” and “sales agent” mixed together, but here in Michigan, there is a massive difference. You can NOT all of a sudden become a “broker”. In order to obtain your broker’s license, you must have experience as a “sales agent” (the exception being lawyers I believe)).

Real Estate Brokerage Cost Structures

There is really no point in discussing ”how much” you are going to pay since there is a virtually unlimited amount of prices, but the key component here you will need to consider is what structure do you want? There are two primary overall structures your sponsoring broker should allow you to choose from.

1. Flat Fee. As the name implies, you pay your broker x-amount every month. It’s a fixed number so your monthly planning for ‘cost’ is much easier.
2. Commission Split. This option really varies from broker to broker, but a popular one it seems is the 70-30 split. Meaning, for any commission you bring in as an agent, 70% goes into your pocket, and 30% goes into your broker’s pocket.

What is the best path for you? If you plan on selling lots of houses and making a core component of your business “revenue from commission”, then I’d just pay the Flat Fee. If you obtained your license more for the freedom it allows and access to the data, then I would go with the Commission Split option as that usually carries no flat fee or an extremely lower one compared to the Flat Fee option.

Related:Why I Love the Fees that Accompany a Real Estate License

Real Estate Brokerage Education Services

This may seem out of place, but getting your real estate license does not teach you anything about how to “do real estate”. Sure you’ll learn about all the laws and state regulations and requirements… but… how to fill out a purchase agreement? How to run a market analysis? How to work the MLS? how to market/advertise? Forget about it!

You need to factor in what kind of education will be available to you. It doesn’t necessarily have to be required or anything like that; however, having access to some education should be a variable you consider. This could be some online courses, pamphlets, or actual sit-down classes. They want you to succeed (remember, it puts money into their pocket when you do!), so there should be some education options available.

You Are the Interviewer, Not the Real Estate Broker

No broker is alike. They all have their own structures and policies. Just like if you were getting a bid on a rehab project, the same strategy should be used here. I’d sit down with a minimum of three brokers before making my decision. Brokers are competing for you, so they will be selling themselves and their business to you. You don’t need to sell yourself to them. This doesn’t mean you should walk in without brushing your hair and with food stains all over your clothes, but assuming you show up and conduct yourself in a professional manner, they want you apart of the team (again, they make money of you!).

To this day, I still get post cards in the mail from various brokerages marketing to me to switch from my current broker and go with them. It’s very common place for brokers to compete for agents, so when you sit down with them, don’t be shy! Ask questions regarding their fees, education, and whatever else you deem necessary.

Related: Pursuing Real Estate Investing Freedom? Consider Getting a Real Estate License!

Brand Name Real Estate Brokerage?

Remax? Century 21? Keller Williams? Do you need to go with a big name company? There is no right or wrong answer to this. Each has its pro’s and con’s. The brand name places are going to have higher fees and such; however, the flip side is they are brand names, so when you hand someone a business card with their name on it, you’ll look much better than someone with a little brokerage that no one has heard of.

I personally am with a little brokerage made up of four people. The broker and three agents. For me, I don’t care about the name recognition. At the end of the day though, if you come across as a caring professional, the name of your brokerage isn’t going to matter. Treat people right and the rest will take care of itself.

Real Estate License Hidden Fees

This has nothing to do with finding the brokerage, but it is still a step of something you need to do. I’ve already talked about the brokerage fees, but guess what, there are more! Outside of your brokerage fees, you’ll need to account for all the fees that go with the organizations/associations/groups. For example, I have fees that I must pay to the Grand Rapids Association of Realtors (GRAR). It doesn’t matter ‘what’ brokerage I am with, these fees are paid regardless.

Point being, when you are setting up your spreadsheets and/or bookkeeping software, don’t forget to add in these numbers when doing your financial forecasting and planning.

Did I Miss Anything?

Did I leave anything out that would be helpful to the person who just passed their real estate license exam? I’m sure I did! Please leave your suggestions below in the comments section. Maybe you have a great question to ask brokers when you are interviewing them? Please share with us all!

Photo: Erich Leeth

The post You Just Passed Your Real Estate License Test. Now What? is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

One of the greatest fears in real estate investing is talking with sellers. Many people work in a cubicle type environment and barely talk to co-workers all day, much less strangers. Unless you’re a very successful sales person, the thought of talking with someone you don’t know, much less asking them for something, can be painful enough to stop your investing career before it’s even begun.

There are a number of places this fear comes from:

1. lack of practice
2. lack of confidence
3. you’re uncertain of what to say

How Do You Fix Those Fears?

1. Practice. – Yup, gotta do it. Gotta talk to sellers. Start out with a goal of talking with at least 3 sellers each week. How do you find them? Call for-sale-by-owners. Call sellers who list their homes on Craigslist, Trulia, Zillow, et. al. The purpose at first is not to buy anything (though you just might!), but to learn what sellers say, ask, and want from you. From that information, you will create your process.
2. Lack of confidence pretty much comes from a lack of practice in talking to sellers which, by the way, creates the fear that you don’t know what they’re going to ask and/or you won’t know the right answers. To overcome this lack of confidence, you must talk to sellers where you will learn how to answer their questions.
3. If you’re uncertain what to say, you haven’t talked to nearly enough sellers. Refer to numbers 1 and 2 above. Before picking up the phone, have a list of questions you will ask the seller and a list of answers you will give to their questions. Once you’ve talked to at least 3 sellers a week every week for several months, you’ll realize that they all ask pretty much the same things and that being able to confidently talk to sellers is easier than you expect.

Some Universal Truths About Dealing With the Public:

• We are ALL in sales.
• Gaining a genuine connection with a customer is a MUST.
• The customer has intelligence and doesn’t need to agree with you 100 percent of the time.
• They must trust that you have a well designed solution to solve their problem.
• Your confidence in what you do, along with your human touch and presence, is the most powerful tool you can have in overcoming objections.
• True success takes practice, patience, tolerance, and a sincere desire to help others.

Spend Time With Your Customer.

As investors, most of us offer some very creative solutions to our clients. It’s important to spend the necessary time to make sure that they understand what you’re offering and why. This time is where you make your money. These are the minutes and hours that are the most vital to the success of your buying business.

Oftentimes, we move too fast. Either we’re nervous and too anxious to get away from the conversation or, because we know what we’re talking about, we expect the seller to understand as well. Remember, most people sell a home only 2-3 times in their lives, so they truly are seeking guidance in a process that most don’t understand and are intimidated by. Slow down in this part of your buying process. Make them feel comfortable and confident in your skills and ability. Treat them with the respect they deserve and by recognizing the importance they are to you and your business.

Related: How to Negotiate: 7 Real Estate Negotiation Tips

Don’t be Afraid if you Don’t Know the Answers!!

If you don’t have an answer, say so! “I’m really not sure on that. Let me find out and I’ll call you back.” “I haven’t been asked that before. Let me do some research and I’ll get right back to you with the answer!”

Don’t you respect that from others? We can’t really know it all, and I doubt that most people expect that of us. I used those answers A LOT when I was first starting out. I let clients know that I am always happy to research for them – and I am! Researching the answers to their questions is how I learn 90 percent of my business. Truly. For 10 years, we have focused on structuring our companies to meet the needs of our local population. We wouldn’t know what those needs are if we didn’t listen to their questions and concerns.

Be thrilled by their questions, especially the ones you don’t know the answers to. That’s where you learn; that’s where you grow. And, a year from now, you’re going to know a whole lot more about this business than you do right now because you took the time to learn the answers to all those questions. That’s exactly how you become the expert. No one is born an expert.

Related: 7 Things That Make You Look Ugly as a Real Estate Investor

Don’t Leave Them.

Let them know that, even if they can’t accept the offer you’re making, you are available to answer other questions they may have as they go through the selling process. Remember, you’re not just speaking to that one client, but they can refer you to their friends, family, and co-workers if you make a positive connection.

A lot of potential clients have called us back months (even years) after our initial negotiations to see if our offer still stands. Others, who didn’t take our offer, have sent us referrals that turned into great deals for us.

Take your time with your client because this is where the trust is gained and the money is made. You spend your money, time, and energy to find the customer, don’t waste it by rushing through the most important part of the deal – negotiating. Every customer DESERVES the time and attention needed to understand exactly what you can offer them and what the consequences/benefits are in each offer you present.

Finally, and I believe the most important part in overcoming fear when dealing with sellers is to realize:
It’s not about you; it’s about them.

When you absolutely recognize this, you will start focusing on your seller -

• What do they want?
• What do they need?
• What are their fears?
• What are their concerns?

When you reach their core, you begin not only creating a way to meet their need, but your conversation revolves around solving their need and they begin to understand that you are truly offering a solution. Once your thoughts become about how you can solve their problems instead of your own, a whole new level of success opens in your investing career.

Comments?

Photo: Loretta Prencipe

The post Overcoming Fear of Talking to Sellers and Their Objections is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

There’s a lot of talk in the investor world about “Getting the deed.” But when you’re purchasing a property or transferring ownership, how does all that title speak come into how you structure the deal?

Disclaimer: I’m in Arizona, so some of these specifics may be a little different in your neck of the woods. But, here’s some more in-depth information about those prized pieces of paperwork and how they’re used.

Can I get a Bargain on this?

In general, there’s a couple different types of Deeds: Patent Deeds and Conveying Deeds.

Patent deeds aren’t something that we’re dealing with most of the time, as they are used when transferring real property from the state or federal government to individuals.

Now, conveying deeds are the ones we’re more used to hearing about and using, and including Bargain & Sale, Special Warranty, and General Warranty Deed.

Can I get a Bargain on this?

Bargain and Sale deeds is a fancy way of saying the government or private person is selling a property with no warranties and usually under market value, like in the case of a foreclosure. This type of deed is of lower quality than other deeds, because they don’t come with all the same protections for the Buyer as say a Warranty Deed, and limits the liability of the grantor (the person GRANTING the deed to the new person).

This includes:

Sheriffs Deeds – In the case of a foreclosure where there was failure to make payments
Treasures Deeds– In the case of foreclosure with failure to pay property taxes
Executors Deeds – In the case of probate to settle the estate
Trustee’s Deeds – In the case where property is placed with a Trustee to offload, usually in a Deed of Trust foreclosure or bankruptcy

Does this Warrant a Better Deal?

A General Warranty Deed is preferable to the Bargain & Sale type deed, as the person granting it (“Grantor”) fully guarantees clear title. This does NOT cover the physical condition of the property, though. But, this type of deed does offer more protections for the person buying the home.

In a Special Warranty Deed, the Grantor takes responsibility for any other encumbrances and defects that may come up only during the time they owned the property. These types of deeds are used mostly in Land Contract transactions or in the case where a Trustee conveys property.

Other Types of Deeds

These are other more specialized Deeds that we as investors will see and utilize throughout our deal making adventures. They include:

Correction Deed – just like it sounds, a deed that is used to correct or supplement the original deed and is re-recorded.

Disclaimer Deed – This is mostly used in situations where you have a husband and wife and one spouse releases their interest in a property. If you’re buying and selling 50 houses a year, your significant other probably doesn’t want to tie themselves to every transaction. So in those cases, you can have the title or escrow company have a Disclaimer Deed prepared at the time of closing. These types of deeds contain no covenants or warranties and prevents the person signing off on the property any rights to future claims.

Quit Claim Deed – These are often used to quickly correct defects on title or release minor interest in real estate. They’re used for example in quiet title suits and may be brought in to play to erase easements, release interests and clear title, which is really helpful if you’re trying to sell the property and something erroneous has popped up. These types of deeds do not have any covenants or warranties, and don’t provide much protection for Grantees (the person who is receiving the Deed).

If in doubt, it’s always good to call your local Title/Escrow or Attorney, whichever type of closing state you’re in. If you let them know what you’re trying to accomplish, they can go over your options and set your transaction up properly.

What type of conveyance do you use most in your business model? Do you get creative with your conveyance strategies?

Photo: Meredith Harris

The post What “Deed” You Say To Me? Watch What You’re Conveyin’ is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

On today’s episode of the BiggerPockets Podcast, we are joined by Arizona real estate investor Tracy Royce to discuss all things related to short sales, getting started, and the best ways to run your real estate investing business.

This show has a ton of tips for finding the best way to help sellers who are underwater on their mortgages and still make you a profit as a real estate investor, as well as great strategies for using virtual assistants to lighten your work load and other tips for those who are just getting started.

Listen to The Show on iTunes (Preferred Method!)

Click here to listen on iTunes.

Listen to the Podcast Here

In This Show, We Cover:

• How to get paid to learn about real estate
• How to parlay your talents into a job with a real estate investor;
• How to “shift” with a changing market and recognize future trends
• How to use virtual assistants in your real estate business
• Goals: Good, bad, and ugly
• Getting started with no money by using technology and social media
• What a short sale is and the short sale process
• How to find a great short sale agent
• Tips for getting your short sale offers accepted

Books Mentioned in the Show

The Four Hour Workweek by Tim Ferriss
Shift by Gary Keller
Atlas Shrugged by Ayn Rand
Think and Grow Rich by Napoleon Hill
E-Myth Revisited by Michael Gerber
Winning by Jack Welch

Links from the Blog

Odesk.com
eLance.com

Tweetable Topics

“When investing in real estate – you have to start out in the mail room.” (Tweet This!)

“Don’t expect to get rich tomorrow. You gotta put the work in, you gotta hustle.” (Tweet This!)

“If you want an easy job, Sell kittens at a pet shop. Real estate investing isn’t easy.”(Tweet This!)

“If you put more fishing lurers out there, you are more likely to catch things.”(Tweet This!)

Connect with Tracy

Tracy’s Website www.RoyceofRealEstate.com
Tracy’s BiggerPockets Profile

The post BP Podcast 019 : Short Sales Tips, Starting Out in Real Estate, & Working w/ Virtual Assistants with Tracy Royce is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

What are partnerships?  Have you ever thought about what it really means to have a partnership and what does it mean in the real estate business?  I can tell you that partnerships can be both hard and easy and sometimes in the same day!  While there are many different ways to make money in real estate and structure partnerships around each, I am going to focus on partnerships within your business.  The business of being a professional in the real estate investment sales world.  For starters, I’ll give you the quick text-book definition of a partnership:

Partnership –  An arrangement by where parties agree to work together to advance their mutual interests.

That is a pretty formal way of saying I agree to do my part if you agree to do your part.  And…there is where the problem exists in most partnerships.  The word “IF” is involved!  It is a funny little two letter word that is responsible for the down fall of more partnerships than any other cause .  Of course, I don’t have the scientific data to prove this, I am just making an educated guess from having been involved in a few!  I’ll never forget one piece of advice I received from a mentor a few years back.  We were talking about the future and where I saw myself in 5, 10 and even 20 years and he made a statement of fact so concrete he didn’t even try to qualify it:

“All Partnerships End.  You Get To Choose If They End Good Or Bad!”

For a guy who is in a partnership with his brother and dad that was shock to hear.  Especially with how casually and matter-of-fact that he put it.  But my mentor was no dummy and he had been through several business cycles including successful and failed business partnerships so he knew what he was talking about.  He also knew my brother and father very well so he was not just talking blindly.  He was really trying to help and his advice still serves us well to this day.  If you are going to form a partnership, do it right.  Do it well. Be respectful and always prepare for what is next.

What Makes A Great Partnership in Real Estate

First and foremost, any great partnership can thrive if the parties involved give each other the room they need to operate.  Partnerships exist so that each person is able to concentrate on their strengths and hopefully the partner is able to concentrate on your weakness.  A really well thought out partnership will come together because each party brings something to the relationship that their partner needs.  If that is the case, then the only way for a partnership to work is to get out of each other’s way and let everyone do what they do best.  So partners have to be mindful of what they do well and what they do not do well and be willing to admit it.  Failing to admit weaknesses and then bringing in a partner only to tell them how to do their part will be a deal killer…quick!

Communication in a Partnership

What do You Bring to the Table?

The third component of a great partnership is to hold yourself accountable for your expertise or the talent that you bring to the partnership.  Going back to the definition, you have to remember that the point of the partnership is so that everyone thrives.  A mutually beneficial partnership means that everyone is acting in a manner that lifts the whole company up.  Each partner is working hard and doing their piece to be successful.  Again, it may sound almost basic, but too often, partnerships are formed as a crutch.  They are formed as a way for one partner to leverage the work of others so that they can do less!  I’m quite sure we have all seen this and know it to be true.

Nash Equilibrium

Lastly, when talking about partnerships, especially when formed to build or grow a company, I am always reminded of the movie “A Beautiful Mind” and the game theory called a Nash Equilibrium.  Simply put, it states that any two people are in a Nash Equilibrium when they are making the best possible decisions they can based on their belief that everyone else involved is also making the best decisions possible.  No one should enter into a partnership to go backwards.  We only enter partnerships to improve our own position in life whether it be financial independence or to gain control over our time, etc.  Why else would we enter into a partnership?  So, consider a partnership like playing a game.  A game that each of us individually wants to win.  When we enter into a Nash Equilibrium, then we are all trying to win individually, but we only make decisions based on the belief that everyone else is trying to win as well.  When this is done in concert, no one makes a decision that is not good for the group.  In essence, we all win!  Is that not the purpose of forming a partnership in the first place?

Summary

To recap, great partnerships exist because we all have particular talents and we all have skills that need improvement   The quickest way to improve our talents is to focus on our strengths and surround ourselves with others who are stronger in the skills that we need to improve.  That is a great partnership.  After it is formed, we need to always be mindful of what we bring to the partnership and make sure we bring it full force every day!  Then we need to have very clear and open communication including taking time to get away from the company and meet as partners to discuss issues in a different environment.  This allows for open and honest communication.  Finally, we need to remember that the partnership will work best if we are holding our selves accountable for doing our part and making decisions that are based on what’s best for the partnership.  While it may all seem basic, there is a reason my mentor told me all partnerships end.  Remembering that line, I remind you that we get to choose if they end good or bad and that choice starts with how we act each day.

I would love to hear about your experience with partnerships or you thoughts on how to make one successful! 

Photo: buddawiggi

The post How To ‘Survive and Thrive’ With a Real Estate Partnership is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

Last week, in my BiggerPockets podcast interview (which I thoroughly enjoyed doing), I mentioned something that I thought about for days after. The more I thought about it, the more profound it really was.

What was mentioned was that it is time for many people to step away from the computer and take their education to the next level. That’s accomplished by getting out into the real world and taking action.

It doesn’t have to be huge action. You might still be in the beginning stages of getting educated, so it obviously wouldn’t be wise to go out and buy a house without having a well thought out game plan.

Too Many People Stay Where They Are Comfortable

The reality is that too many people stay right where they are because it is comfortable. You might find yourself wanting to learn, learn, learn, without any real guidance or ideas of what exactly needs to be learned.

Sometimes we have an idea, no matter how vague, of what we need to learn and set out to learn it. We read (most of us actually devour because we are so fired up to get into flipping houses) everything we can find on the subject matter on the internet, in books, in courses…and all places we are comfortable looking for the answers.

There’s not a problem with that. The problem lies in our constantly thinking we’ve learned something because we’ve read about it. We might learn it to some extent, but the retention of the ideas or at least some of the ideas is not even close to being good.

We learn what we think we need to learn and the next logical step is to use what we’ve learned. But NO, we couldn’t do that. That would be uncomfortable, at least to most of us. It much easier to just assume there is more to be learned on the subject or something else that we need to learn to make sure our education is well rounded.

It’s just easier to do that, but we’re not accomplishing what we really want to be accomplishing.

We want to become successful real estate investors, not just students.

Everybody has heard of the people who never seem to make up their mind on what they want to do and just continues to collect college degrees. They’re called “career students”.

I think when it comes to really making a go of this business, the majority of people actually become this “career student”.

I’m sure you’ve heard of (and maybe you’ve done it) people that have paid upwards of $20,000, even $50,000 on education to learn how to flip houses!

Maybe they feel that if they spend that kind of money it will make them work harder at it. But alas, it is just to allow them to stay in their comfort zone for even longer.

Here’s How To Fix The Problem

Step away from the computer.

Click the mouse a few times and hit the power button. Push your chair back and stand up. Walk away.

Get a snack and grab your keys. Get outside!

Yes, that place that everyone is saying kids don’t venture into anymore. That place where people are making things happen. Where people are hustling and taking massive action.

You might feel like an odd ball and that you don’t know what the heck you are doing, but I guarantee you that if you force yourself out there you will start to see everything come together.

Don’t worry, I’ll talk about where you should go shortly. Don’t want you just going to a bar or something.

There will be clarity.

Where To Go, What To Do

Find investors that are actively flipping houses. Take them to lunch. Enjoy their company and make sure they enjoy yours.

Please, whatever you do, DO NOT go begging successful investors to help you.

We are busy people and most of us don’t want to share our trade secrets. You have to build relationships and you don’t do that by asking people to give you stuff (whether that be advice, ideas, help, whatever).

The goal is to just befriend them.

The best way to get a serious investor to take notice and want to work with you, is to attract them. You attract them by showing that you are a hustler. You aren’t like the others that just stay behind their computer and want people to give them the keys to success without putting in the work.

And regardless of what so many will have you believe, there is a lot of work involved.

We tend to see and hear about success stories and just assume that it happened quickly. We don’t know about the hundreds and thousands of steps the people have taken to get to where they are.

Where To Find Successful, Local Investors and Other Things To Do

Finding and getting to know serious, active investors should be a top priority, but isn’t the only one as you venture out into the real world of house flipping.

Here are some other things you should do (and some are great places to find these serious investors):

• Visit local Real Estate Investor Association meetings
• Drive through different areas of town and look for rehabs (roll-off dumpsters are usually dead giveaways)
• Try to determine which areas you want to invest in
• Stop at rehabs and talk to the contractors, look at the work being done
• Stop at rehabs and get contact information for the investor that owns the house
• Go to the big box stores and make lists of expensive, yet nice materials to use for your flips
• Make some calls to local real estate agents and find some that work with investors – take them to lunch
• Talk to other investors and find out who they use to close their deals, go and talk with them (learn the process)
• Talk to some hard money lenders and find out what terms they want
• Schedule to go and look at some bank-owned foreclosures (try to see the ones in the worst shape)

Conclusion

Don’t become stuck behind the computer. Get outside and make connections. Get out there and discover your farm area and meet the people that will make up your team. Build to where you are getting actual things done instead of just learning things that will soon be forgotten because you aren’t implementing them.

One last note: Don’t let worry and fear stop you from getting out there. Don’t let your fear convince you that there is more to be learned first. You don’t have to know anything about the business to get out there and start talking to people and looking at houses.

Please share any other ideas of things you can do outdoors with regards to taking action and getting a real education. You can share them in the comments below. Every one left is much appreciated, not just by me, but everyone that is planning to do the right thing and head out there, into the wild.

Photo: Luigi Crespo

The post How To Take Your House Flipping Education To The Next Level is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

One of my blog readers emailed me to ask:

“What do you think of owning out-of-state rental property? I live in WA state, and inspired by your blog posts, I am looking for rentals to invest in Atlanta. Do you think this is practically do-able?”

The short answer: It’s definitely do-able. But it may or may not be something you WANT to tackle.

Plenty of people are successful out-of-state landlords. Plenty have also gotten burned by the process, which turned out to be more difficult than anticipated.

Here are a few questions I’d encourage the reader to consider before taking the leap into out-of-state landlording.

#1: Have You Ever Owned a Home?

And I don’t mean, “Have you ever owned a new-construction condo?” I mean, have you ever owned a structure that needs pest control, termite treatment, roof shingle repair, gutter cleaning, hot-water-heater replacement, dishwasher installation and midnight plumbing?

I made the mistake of becoming a landlord with my very first property. I had never owned property before, and suddenly I was responsible for overseeing the renovations on a 100-year-old triplex AND simultaneously managing three units of tenants who had grown accustomed to the previous lackadaisical landlord.

That experience gave me a quick crash course in home ownership (who knew you needed to think about drainage?). My only saving grace was my flexible, work-from-home day job, coupled with the fact that I lived across the street (and later moved into one of the units). Even still, I wanted to rip my hair out.

If you’ve never owned a home before – not even your primary residence – I’d caution you against becoming an out-of-state landlord with your first property.

And I’d very strongly caution you against buying an out-of-state fixer-upper.

Which leads to my next point …

#2: Do You Have Landlording Experience?

If you’ve never managed tenants before, I’d generally encourage you to try landlording in your own backyard before venturing into out-of-state property investing.

Notice that I said the word “encourage.” I DO think you could become a successful out-of-state landlord on your very first investment property, particularly if you have a trustworthy team established in the area where you’ll be investing. At minimum, you should have the world’s most awesome property manager, a good real estate agent who has experience working with buy-and-hold investors, and a trustworthy contractor.

I’ll award you extra bonus points if you’ve had exposure to the daily life of property investing (e.g. if your parents were landlords and you grew up watching their experience). If that’s your situation, you probably have a decent idea of what to expect.

#3: How Strong Is Your Team?

Do you understand the neighborhoods in the area that you’re eyeing? Have you ever visited the area? Do you have a strong idea of the neighborhood and tenant profiles?

Do you have a trustworthy, experienced property manager on speed-dial? Are you fluent in “construction-speak,” so that you can understand the jargon that contractors use? (Pop quiz: Do you know what a joist is? How about a toilet flange?)

Is your cash flow strong enough that you’ll be able to withstand lower rents and higher maintenance/vacancy costs than you anticipated?

Do you have a mentor who you can consult when you need help? Perhaps a friend with experience managing properties, or a parent or uncle/aunt who has been through this experience in the past?

This sub-section of questions is probably the most important. If you’ve never owned a primary residence home before, but you have the world’s most trustworthy mentors and managers, plus a deal that cash flows like crazy even with the most conservative estimates, then go for it. Buy an out-of-state fixer-upper rental, and enjoy the profits.

But that situation is rare. As a novice, you’ll most likely find an average deal managed by an average team. And in that situation, I’d encourage you to first own your primary residence, then try becoming a landlord within your own state, and then only graduate to out-of-state rentals.

****

BiggerPockets readers, what do you think? Did you own an out-of-state property early within your landlording career? What would you recommend to a beginner who wants to be an out-of-state landlord?

Photo: Ryan Dickey

The post What Do You Think of Beginners Owning Out-of-State Rentals? is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

I think most real estate investors would agree; you just never know what is going to happen in this business on any given day. Or another way of putting it would be “there’s never a dull moment”.

It doesn’t matter if you invest in single family homes, commercial properties or really even if you are big or small as real estate investing companies go. You know how important it is to educate yourself and become a master problem solver. Even then, there are just some things you can’t predict or prevent.

The Whole Story of Cabbages, Onions and …. Pot

I know someone very well that got a big surprise a while back. This gal works for one of the larger real estate investors in my city who owns 200+ houses, apartment buildings, various commercial buildings as well as office space and office warehouse combination types of buildings.

She had an appointment that morning to meet with someone to rent some commercial space which was located in the same complex where her office is located. So she picked up the keys to the unit, and walked the short distance to wait for the perspective tenant.

Once she arrived in the area, she saw two things; a number of men with big letters on their jackets AKA the “DEA”, and one of her current tenants. She heard the fellow from the DEA ask the tenant if he was the property owner to which he pointed to my friend and said, “No; she’s the one you want”. OK; that’s not exactly how you want to start your day off is it?

My friend introduced herself and said “I’m the property manager. How can I help”? (You can tell this isn’t the first time she has encountered “men in jackets with big letters on them” in her career).

He said. “Do you have the keys to this unit” and she replied, “Yes; they are in my office”. He told her that he had a search warrant and would need to get in the unit. She went to get the keys and when she came back shortly, she told the DEA officer she had just rented this unit 10 days ago. Also about this time she saw a whole bunch of workers sitting on the curb that had been handcuffed and were waiting for transport. She did note that they were not the actual people she had rented the space to.

What’s In the Boxes?

You will see from the picture that it really doesn’t look like that much produce (at least to me). But the short version is, there was just under 5000 pounds or about 2 ½ tons of marijuana hidden in those boxes of cabbage and onions. The fellows from the DEA said it had a street value of about $5,000,000. They had tracked this shipment all the way from it point of origin.

The agents from the DEA asked her what story the tenants had told her when renting the space. What type of business did they plan to operate?

She was able to tell them in great detail what they had said, because this landlord has strict policies in place for businesses that have anything to do with cars or car repairs. The tenant’s story had been that they would be doing some restoration of expensive automobiles so there would never be any cars sitting outside (which wasn’t allowed) or any onsite painting which also wasn’t allowed. They had also told her that they would be using it for storage for items used in their other business which was construction.

That sounds reasonable doesn’t it?

Is There A Way to Prevent This From Happening to You?

Not really. It is not that unusual for commercial landlords in an industrial or mixed office/industrial area to rent to “start-up businesses” especially for warehouse space. The criteria for screening these folks can also be a little different too. The landlord does the standard credit report and background check of course. Even though they get a security deposit, there is nothing really to tear up in a concrete block building.

According to my friend the biggest problem with these folks is that they have no business credit history. So if their personal credit history is OK, then they will usually rent to them.

Are There Any Lessons To Be Learned?

According to the DEA agent’s onsite, there was really nothing that the landlord could have done differently to avoid this outcome. They said that the landlord’s role was simply “to do their job and screen the best they could”. Beyond that there was no way they could have known or predicted this would happen.

*One point to note is that these agents told her that these folks are renting just as many single family homes as commercial spaces for their drug activity.

What Do You Do With a Warehouse Full of Cabbage and Onions?

Donate it to a local food bank quickly before it begins to spoil. This stuff starts to smell really bad pretty quickly. I might point out that it was the DEA that mentioned this first. I guess that was the voice of experience speaking.

Has anyone had a problem like this in their business?

The post Cabbage, Onions and ….What’s In That Crate?! A Story of Drugs, the DEA, and Real Estate Investing is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.

A few weeks ago, I painfully lost a deal on a real estate note in Texas.  The client note holder (Mr. B) and I had agreed upon a price, my company had reviewed the documents, and an appraisal and title commitment had been ordered.  Then, the buyer of the property missed a payment, which dramatically switched up the process.

Suddenly, a strong note had become non-performing, which completely changed the pricing and outlook.  The note holder intended to foreclose but I convinced him to talk with the payer about getting back to current status and potentially modifying the conditions of the note, which were both successful.  I told him that we could still buy the note, as it was on a nice house and there was decent equity.  However, we would only be able to buy most of the payments instead of the full note, and wanted to wait until two timely payments had been made.  To me, this seemed more than reasonable and Mr. B agreed.  He was quite thankful for the many hours that I had put in and expertise that I provided.

Then, things turned darker.  When I contacted Mr. B a couple of weeks later to see how things were going, he became non-responsive.  After several more tries, he sent me a short e-mail that he had decided to sell the note to someone else who would buy it right away and buy the full note.  Eventually, I found out that the latter was a lie, as he actually sold a small piece of the note at a terrible price to a competitor.  Regardless, the deal was lost, and I had completely wasted a number of hours.

After something like this happens, I get introspective.  Did I not do a good job of understanding his needs?  Did I upset him in any way?  Were there signals that I missed?  While I’ll never know the truth, I think that all of those answers were no.  What most likely happened is the competitor happened to be speaking with him at the right time, and I should not have waited two weeks to call him again.

What Are Ethics?

My dictionary defines ethics as “the rules or standards governing the conduct of a person or the members of a profession.”  Of course, there is no real definition of what is ethical, and a random group of people might have different views on whether reactions to a particular situation were ethical or not.  Most of us would agree that lying is unethical, but when is the line crossed from puffery and exaggeration to meaningful lies?  To me, always doing what I said that I would is the right and ethical thing to do, but some people feel comfortable saying something and later deciding that it is not important enough to actually complete.  I think that Mr. B was unethical for lying and for not telling me when he decided that he wanted to sell the note immediately, though he has probably rationalized that he was the customer and therefore free to do whatever he wanted.

Dealing with Poor Ethics

Mortgage note buyers, like everyone in real estate or any other business, must periodically deal with slime balls that have no moral compass.  Occasionally, I’ll have a note seller who changes his mind after we have done many hours of work to complete the note sale.  If that happens, I try to understand their current needs and find out what changed.  Sometimes, the client just needs some reassurance or we will have to tweak our offer a bit.  If the client still wants to cancel the deal, then there are a few actions that we can take, like:

1.  Appeal to their sense of fairness and ethics, and remind them that they gave their word that they would sell the note at the agreed upon price.
2. Nicely remind them that they signed a binding contract clearly stating that they would be liable for all of our expenses if they unilaterally cancelled.  At least half of the note holders will re-engage with the note sale, while the remainder will pay the penalty fee, stop corresponding, or say something to the effect of “so sue me.”
3. Threatening legal action is a last resort that I rarely use, and I’ve only gone to court on a deal once.  Besides the obvious fact that it ruins the relationship, taking legal action is costly and time consuming.

In the end, after I have tried just about everything, I may decide to throw in the towel and stop pursuing them.  With most of the clients, I’ll still call them again every few months, and sometimes I’ll land that deal at a later date.  For the rest, I just chalk it up as a cost of doing business and recognize that some people are just plain unethical or, at a minimum, have very different values from me.

Photo: *saxon*

The post Dealing with Unethical Clients: A Story of Deceit in Real Estate Note Buying is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.