Those that know me intimately know that I rarely ever watch television.  I typically work from about 6:30 AM til I retire - whether that is 8 PM, or 4 AM, or anytime in between.  I do read papers, and I do subscribe to certain internet resources, but seldom turn to TV as a source of either education or entertainment.  So, last night as I found myself returning to my hotel room with a desire to be mindlessly entertained while finishing my burger and shake, I turned the TV on. 

I was in "shock and awe" as I saw that infomercials had changed gears completely.  I remember years ago when a moderate few was the count of thirty-minute real estate investment programs.  But, wow.  Last night I discovered that every channel except cartoons and a Spanish-speaking drama channel were dedicated to either exercise equipment or real estate investing opportunities.  No wonder I am seeing so much confusion among new investors that inquire with our company.

In response to this new epiphany, and the questions I keep receiving from people craving to increase their ROI and exploit the current real estate market, I've decided - in my somewhat limited capacity - to comment on the difference in investing into hard money lending and that of actual hard real assets (real estate).

First, allow me to say that real estate is a safe bet almost every time - providing the price is right and you are willing to allow it to mature in value (either organically or through strategic improvement) before liquidating.  In fact, I am familiar with a young couple who just became millionaires overnight because their remaining parent died and left them with hundreds of acres of developed land in the center of L.A. - This land was purchased for a song in the 1940's and has been held by the family since.  THIS IS REAL - REAL ESTATE INVESTING.

But let's be realistic.  In this day of quickie burgers and microwaves, it is difficult for any new investor to imagine buying a piece of investment real estate with the vision of it being in the family for generations to come.  WE are a quick-in, quick-out, make-that-money, generation.  So, with that said, I would like to comment about the pros and cons of real estate investing as a SOLE investment option - As I see it.

The pro's of buying foreclosures, preforeclosures, short sales and other discounted real property:

1)  If the price is right the profit on a transaction can be substantial upon liquidation
2)  You might be helping to rescue someone from certain financial collapse
3)  There are certain tax breaks for real estate ownership
4)  It just plain feels good to be a property owner
5)  Donald Trump made his billions in real estate

The Cons:

1)  If the price is wrong, or the market is wrong, or the geographic area is wrong - you could have just bought an albatross.
2)  You better love being a landlord
3)  With today's gas prices, the cost of property improvement is probably 50% higher than it was just -4- years ago.
4)  There are tax responsibilities for property ownership
5)  Donald Trump is more of a skilled negotiator and overall jerk than most real estate investors are willing to become.

Now, let's look at what kind of pros and cons that Hard Money (trust deed / private mortgage) investing presents:

1)  Trust Deed investing is an investment secured by a Real asset but does not require direct ownership
2)  Hard Money investments are held against low Loan-to-Value ratios, giving the investor the opportunity to liquidate and retrieve investment funds if borrower defaults.
3)  Investor receives immediate monthly returns in the form of payments from the borrower.
4) No property taxes, management or transaction fees
5) Strong, fixed-rate returns for determinable and pre-stated periods of time.
6) Investor chooses where their money goes based on investment opportunity presentations.
7) Investor can earn additional income through occasional late payment fees
8) Hard money investing represents a relatively passive income - unlike real estate investing which demands hands-on involvement.

The Cons:

1)  Cash remains in investment until end of term (typically 3-60 mos.)
2)  Borrower can default resulting in foreclosure of property, which means the property is either put into the investor's personal ownership portfolio or liquidated at below-value price to recapture investment funds and costs.
3)  Foreclosure may cost the investor until property is sold or acquired by investor.

Another thing to consider in Trust Deed / Private Mortgage / Hard Money / Private Equity investing is that unlike a purchased property that typically holds a debt for the investor, a hard money investment holds no debt for the investor (unless the investor were to incur such a debt in order to participate - this would not a suggested practice.)  As a result of this lack of debt, the investor is making 100% profit on their return.

Now, don't take me wrong.  I believe, if there is an appetite and a will, real estate is an excellent component to a well rounded high-return portfolio.  Yet, I will confess that 80% of my investment funds are in hard money investments rather than real asset investments - it just makes more sense.  I hate being a landlord, and I hate paying property taxes, so this is the right choice for me.

If you are interested in learning more about hard money / trust deed / private mortgage / private equity investing, please visit one of our sites:  HTTP://www.TheEquityExperts.com or HTTP://www.ASafeWay2Invest.com

Til next time!
Brandon Thienes, Hard Money Specialist

An interesting and little known dilemma that all private equity lenders (hard money lenders) face on a regular basis is the lack of really good qualified projects and borrowers.  Few people, investors or borrowers, realize that it is only one in dozens of loan requests received that are accepted as fundable (at least by genuine lenders).  The remainder are basically pipe dreams or rescue operations that offer little, if any real security for an investor.

Some companies (I call them fee mongers) take advantage of these dozens of worthless opportunities by charging application fees, due diligence fees, commitment fees, etc. with promises ...<< MORE >>

I find it very interesting that less than 5% of investors nationwide understand, or perhaps even know about the value of trust deed / private mortgage investing. Yet, more than 50% of non-residential mortgages throughout the U.S. are actually private.  That means that there is a continuing market for our services and products, yet there are so very few individuals, trusts, companies and investor groups that actually participate in such vehicles.

As a result of such a small consortium of informed private equity investors - most of whom keep their investing secrets to themselves - I find myself spending about 80% ...<< MORE >>

Author:  Brandon Thienes

As my last entry for 2007 I listed twenty or so reasons that New Mexico's economy continues to evade the national recession-istic economy.  As the new year has begun, there are even more reasons to celebrate New Mexico and its potential as an investment haven.  I am listing below a few more reasons why I am happy to be in the Land of Enchantment.

1*    Development of the New Mexico Spaceport, "Spaceport America" 100,000 square-foot hangar and terminal facility is scheduled to begin in 2008.  This venture between the state of New Mexico, and Virgin Galactic owned by Billionaire Richard Branson will be "The world’s first purpose-built commercial spaceport is designed to convey the thrill of space travel while making a minimal impact on the environment." The terminal and hangar facility are projected to cost about $31 million, and will provide a destination experience for visitors to Spaceport America.  This venture is anticipated to bring a large consortium of visitors, scientists and customers.

A study conducted by New Mexico State University projects that by Spaceport America’s fifth year of operation, it will employ 2,300 people with a payroll of $300 million. Download the NMSU study.

Futron Corporation predicts that by 2020, Spaceport America will employ more than 5,000 people with an excess of $1 billion in total revenues. Download the Futron study.

2*     International financial giant Fidelity investments has announced the construction of a $15MM, 200,000 sf.  office just outside of Albuquerque to employ over 1200 people with average salaries of $60k.

3*    The following state infrastructure investments are planned for the coming year:

        $10MM for roads to the NM spaceport.
        $14MM for state fairgrounds renovations
        $ 6MM  for renovations to UNM's basketball arena
        $ 5MM  for renovations to UNM's football stadium
        $19MM for an arts complex at NMSU
        $12MM for construction of a dental school at UNM
        $79MM for assorted university and public school upgrades
        $  5MM for substance abuse facility construction
        $  5MM for film promotion
        $70MM for film incentives
        $28MM for misc. state and prison infrastructure

4*    Aquatic Consultants, a national lake and pond consulting firm is breaking ground on a $4MM 16,900 sf. office 
        building to house their growing practice.

5*    Albuquerque is renovating and expanding it's fire academy at a price of $8.5MM

6*    Presbyterian Healthcare is building an additional $7MM medical complex to meet the growing demands of the 
        Rio Rancho (Albuquerque) suburb.

7*    In spite of media reports of the downturn in national real estate, Albuquerque remains strong.  The last year 
        that Albuquerque showed a drop/decline in our housing market was in 1988 when we had a 2% decline.  
        The average sale price of homes in Albuquerque between Sept. 06 and Sept. 06 increased $6,413. (AMBR 
        statistics).

8*    Venture capitalists have committed to pour in $121.7MM in investment funds into New Mexico 
        companies during the first quarter of 2008.  Here are a few of the recipients:

        Aspen Avionics
        Wellkeeper - developing wireless oil well monitoring systems
        Altela - Cleaning brackish water produced by oil & gas drilling
        Enerpulse - developers of highpower sparkplugs.
        

Once again, I cannot reiterate the wonderful things happening in New Mexico, and I want to invite investors and investor representatives both to consider working with The Equity Experts as you look into the benefits and profits to be made in our wonderful state.

til next time, don't forget to visit our site:  TheEquityExperts.com

Brandon Thienes

A couple of weeks ago, an investor of mine asked why the real estate numbers in New Mexico were so weighted compared to other Western States, and the country as a whole.   I gave a few brief examples, but since that time, I've done a bit of homework in order to better answer his question.

I thought I would post my final entry by recapping a few reasons why this little recognized planet we call New Mexico is a forerunner in positive economic and real estate statistics.  Here's a few reasons why NM will continue to be a good investment for ...<< MORE >>

According to the most recent data released by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, the only region of the United States that had an actual housing sales increase in November of 2007 was the Western Region.  Considering that home sales and foreclosures are down in California, Nevada, Arizona and Texas, this leaves the bulk of the increase to Utah, New Mexico and Idaho.  In another recent article I read, it was stated that Nevada is once again the fastest growing state in the country, while New Mexico is the 13th.  Yet, Nevada's overall ...<< MORE >>

In this day of sensationalism that has pervaded our marketplace, entertainment, churches, etcetera, it is acceptable to have a numbness toward sensationalism in the news media.  One such area of sensationalism is the issue of Sub prime mortgages and the proclaimed downfall of the mortgage world as it has ever existed.

I've made several commentaries on this issue, but have held my tongue regarding much of my opinion because personal experience has told me that the masses prefer hysteria to logic.  So I just plot along doing my job thoroughly and integriously while I hear rumors of Rome burning.

However, I read ...<< MORE >>

I continue to receive daily updates on the legal battles and legislative maneuvers being stimulated by our current mortgage industry correction.  I am a bit disturbed about the fact that all of the blame seems to rest on those who are on the front lines of the mortgage industry.  Are mortgage professionals just inherently evil?  Are we so desperate to fund our lifestyles that no borrower is safe from our unjust and deceptive ways?  What about the lenders who push their programs down our throats and turn blind eyes to certain underwriting details that should be blatant red flags?  Is ...

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