Thank you for downloading the Hawaii Real Estate Investing White Paper 2011 Edition! Real Estate Investing, the timeless investment strategy of the ultrawealthy has come a long way over the last few years. But it continues to be the main source of wealth generation for the wealthiest individuals in the world. Because of this, it s allure never stops. However, the mortgage and housing crisis that occurred in the US from 2008-2009 has changed the game for many investors. I bought my first property in Hawaii in 1993 and have been successfully flipping houses professionally since 2002. I have seen every market trend since then, and have learned a lot along the way. Fellow investors that I ve worked with along the way have come and gone, and today only the smartest and savviest investors have survived. Fortunately, most of them are my students that I ve been teaching along the way to follow the techniques and procedures that I ve learned that work in most any market, up or down. There are however, some minor details that have changed the game, specifically as it relates to Hawaii over the last few years. I felt I had an obligation to shed some light on these through this white paper, and hope you are able to take a few of the ideas in it, and apply it to your own Real Estate Investing strategies. Who is the White Paper for? I primarily wrote this for two types of people. 1. Someone who is interested in becoming a Real Estate Investor and would like to get an edge over the competition in todays market. 2. An investor who may have had a deal or two under their belt and is looking to learn some techniques that are working in todays market, to help Tweak their strategies and possibly improve their bottom line. I know when I was first getting started in Real Estate Investing, I would have spent a mortgage payment or two just to gain an edge and make all of my deals more profitable. Well, in this white paper, I m going to do that just for you. Enjoy the white paper, and thanks again for downloading! Thank you for Downloading My Real Estate Investing Guide Michael Mazzella, CEO HonoluluMentor.com
FUNDAMENTALS One of the biggest keys to my success over the last decade has been keeping an active funnel of Real Estate Investments in my pipeline and by that, I mean always having potential deals that will soon come to the table. Not that they all need to be acted on, because obviously there are many different factors that may be at play in determining the timing of a deal, but is important to always have deals that will be coming to different stages in the coming months and years, ultimately resulting in a payday, once we ve purchased, rehabbed and flipped it. Real Estate Investing is not an immediate road to riches, but with time and effort it will pay off. One of the most important principals that can help you functions of leverage it takes time and effort, and most importantly it takes leverage. Leverage can be applied in many ways and in many circumstances. When people think about leverage in Real Estate Investing, they most often think of using OPM or Other People s Money. True, that is one of the key uses of leverage when financing deals, but another key that I use leverage for in Real Estate Investing is keeping my funnel full. That most often comes from leveraging relationships. You see, what has truly helped me to keep a full funnel is talking to and having an open relationship with anyone and everyone that can bring me a deal. So who are the people that can bring me a deal? Anyone! But there are a few that have a little better leverage than most when it comes to bringing deals. One of my most successful relationships that I have is with someone that always has their eye on properties that meet my preferred investment profile. He happens to know quite a few people in the real estate industry and has a knack for bringing me the best deals. I call him a Bird dog, because he s always out there finding the deals that I want. Do I pay him for his services? Absolutely. Whenever a deal closes that he has brought me, he gets a chunk of my profits. Why is it worth it to me to do this? Because of leverage. There is no better leverage than having someone bring deals to you! Of course it s a win/win situation, because he gets paid and I get paid! So leverage in Relationships is one of my key techniques for successful Real Estate Investing. Finding the Right People My second key technique that is keeping my funnel full in this market is tapping into people that have an intimate knowledge of properties, neighborhoods and streets.
I ve got about 50 different methods that I share in my Millionaire Mentor course, but a few that have worked especially well for helping me find deals in this economy especially are: - Postal Deliver Men (or Women!) - Bail Bondsmen - Board Up Services Now you may not think that the Post Man can play a role in helping me find properties, but when you think about the fact that this is a guy that goes to the same neighborhood day in and day out and knows pretty well what is going on with all the houses on his route. If you can develop a relationship with a postal delivery man (or woman), you are going to have a golden opportunity to find properties that are good candidates for investing. Bail Bondsmen, obviously are usually pretty familiar with a distressed situation that we may be able to create a win/win opportunity for his unfortunate clientele. I have helped more than one distressed owner out of a situation that could have resulted in a damaging foreclosure that could have resulted from a homeowner being incarcerated. One of my underlying philosophies in life is to always create win/win situations. Finally, Board Up services are specifically for closing up houses that may be in distress or disrepair. Pretty much every single one of their customers are in a great position to be helped by a Real Estate Investor. If you can develop a relationship with one of these services or one of their employees, you can get some really good insider knowledge on properties out there! Pre-Foreclosures My third key technique for keeping my investing funnel full of good deals is Pre- Foreclosures. The Foreclosure process in Hawaii has undergone some changes in 2011, and it s actually turned into a boon for investors! New Hawaii Foreclosure Laws In 2010, there were 12,425 foreclosures in Hawaii; the 11th highest in the nation. On May 5th, 2011, in an effort to combat the predatory lending practices of mortgage banks and in the interest of protecting consumers, Governor Neil Abercrombie signed into law a moratorium on non-judicial foreclosures which essentially denied lenders the ability to foreclose on homes through traditional channels. Instead, lenders are now required to go through mediation that the law created that begins on October 1st 2011. While it sounded good in principle for homeowners, what
it ultimately did was force lending institutions to change from a non-judicial format of foreclosure (which didn t require the review of a judge) to judicial foreclosure. Fannie May, the government backed mortgage giant then directed lenders to move all Hawaii Foreclosures into the courts rather than use the mediation system the law created. What this has done is created a huge backlog of judicial foreclosure cases that will take the Hawaii courts system months or even years to work through. This was obviously not the intended result of Gov. Abercrombie s law, but it is happening none-the-less. What this means for Hawaii Real Estate Investors This move creates a unique opportunity for Hawaii Real Estate Investors. Because of this delay, this will ultimately result in a backlog of foreclosures and ultimately result in homes being available in the Pre-Foreclosure status which is much easier for an Investor to salvage. (read, less paperwork!) When you find homeowners that are in a pre-foreclosure status in Hawaii, you now have a much better window of opportunity to move on purchasing that house, ultimately saving the homeowner from having to go through the lengthy, painful process of foreclosure (especially if they go through the state courts) as well as having a property that will have been possibly saved from being uninhabited and in disrepair. 10 Surprising ways to find High Equity Real Estate Deals Let s face it, Real Estate Investing is filled with highs and lows. In the ever-changing market place there are always new variables that pop up that catch unsuspecting Real Estate Investors by surprise. One of the biggest challenges that investors are facing in this market place today is finding high-equity deals. The decline in home prices has definitely contributed to this, but there are still many that are available! Here are 10 of my best ways to find High Equity Real Estate Deals in this market: 1. Probate Court - Yes, the probate court still works for Real Estate Investors! With an aging population and the value of Hawaii Real Estate that has skyrocketed over the last 50 years, there are many, many high-equity deals out there that come through the courts that families are glad to sell below market value to split the profits among the family. I explain in my HonoluluMentor course some of the best secrets to navigating the bureaucracy of the courts system and unique and respectful ways to approach families in this situation. 2. Evictions - Property Managers are very valuable sources of finding deals. I can t count the number of deals that I ve gotten because of a tip from a Property Manager.
They know the owner, they know the property and they know the history. If you explain to a property manager that you are looking for homeowners that are ready to get out of the rental business (usually because they ve had a bad tenant or two) they are typically very eager to help you out. In my HonoluluMentor course, I explain 3 key factors that have helped me build bridges with a few Property Managers that send me deals of homeowners that are tired of dealing with renters on a nearly quarterly basis. 3. Pre-Foreclosures - As I alluded to above, the foreclosure business in Hawaii is in a difficult spot right now. Banks don t want to go through the mediation now required for a non-judicial foreclosure and the state court system is back-logged for months or possibly as long as two years with handling foreclosures through the judicial system. This is creating a much longer window for pre-foreclosures, as well as public records of properties that are going through this process. Pre-Foreclosures are one of my favorite methods of investing because I get a chance to help out homeowners and make a profit at the same time. I spend a lot of time teaching the fundamentals of this in my course. 4. Departing Military - Hawaii is unique in that it has a large population of well-paid, responsible military members. Many of them purchase homes while they are here and when they depart the islands they are looking to sell in a short time. I have multiple students that have profited from departing military members who had highequity properties. 5. High-end homes - This is one of my favorites. High-end homes in Hawaii that are between 10 and 20 years old are a sweet spot for Real Estate Investors. They are typically very high equity, if distressed, the owners are typically willing and able to work out a deal that works well for both the investor and the owner. 6. Divorce Attorneys - Divorce attorneys are often looking for investors to help their clients out. Sometimes in the course of a marriage split, it would be more beneficial to the couple to sell their property rather than have one party keep it. There is an entire module of my Honolulu Mentor course that is dedicated to this topic. 7. Social Workers - Social Workers, like Divorce Attorneys are often very knowledgeable on a situation and often know of families that are distressed and need to sell their house. If you can be the go-to Investor for a Social Worker and can assist in helping his or her clients out of their situation in a win/win scenario, you will find that you will become quite popular with Social Workers. If they can help their clients out in any way, they are happy. Being able to buy a home from a distressed family to relieve their pressure can be very beneficial. 8. Bankruptcy Attorneys - Like Divorce Attorneys, Bankruptcy attorneys know where situations exist that could use a quick buyer of a property. This can be a win all the way around, because if a family can free up their mortgage payment, they may in fact be able to avoid bankruptcy all together.
9. Nursing Homes - Nursing homes are always familiar with the situations of the families of their patients and residents. If you know of anyone that works at one of these institutions you may be able to find a family that is looking to sell an older property. Usually these are very high-equity deals. 10. Storage Companies - Oftentimes you can find notices on bulletin boards at Storage companies that are auctioning off the articles contained in a unit that has gone unpaid. A little gumshoe work can pay dividends because often, if someone has stopped paying for their storage, they may have bigger problems, like struggling to pay their mortgage. Going Forward Real Estate Investing will continue to be one of the most important strategies to attaining significant wealth. Implementing these strategies is going to help anyone from the newest investor, to the seasoned pro expand their game, fill their pipeline and Would you like to learn more? Please check out my website at http://www.honolulumentor.com. There you can find more articles and information about Real Estate Investing. If you are new to investing or would like to be trained as an investor, I open up my doors to 4 new students each month through my Millionaire Mentor course. I have trained hundreds of Real Estate Investors over the years and partner with my former students on a regular basis. One of the biggest comments I always hear from my students is that they could have never learned what I teach from a seminar speaker on a stage. Because I am an active investor and in the trenches each and every day, students learn more from my course and a month of my mentoring faster than any seminar can ever teach. My Investing Company is called Turtle Bay Land Company, and you can learn more about our investments at http://www.turtlebaylandcompany.com Also, follow photo s, videos and antics of our Real Estate Flips on our active FaceBook Page at http://www.facebook.com/turtlebaylandcompany
About Michael Michael Mazzella is a nationally known Real Estate Investor, author, and millionaire mentor who bought his first property in 1993. After flipping a foreclosure property for a quick profit, Michael gave notice at work and has been happily unemployed ever since. The rest is history. Today, Michael is one of Hawaii s most active real estate investors, and owns residential and commercial properties from the Hawaiian Islands to the US East coast. Michael invests to win - he does not follow the herd. Over the past decade he has developed and refined his own savvy investing strategies, in both up and down markets, and as a result of these techniques, has never lost money in a deal. In 2004, Michael started a training company, (www.honolulumentor.com) and began sharing his strategies, which are not taught anywhere else. Michael is also a highly sought-after speaker and mentor, and has trained thousands of students across the nation. Graduates of his Millionaire Mentor course enjoy a high success rate, and include an expanding list of real estate millionaires. Rather than using banks, Michael uses cash from private individuals to find his investing operations. His private lenders earn up to 12% while their investment is secured by real estate. If you would like more information about joining Michael s elite team of lending partners, contact him at Michael@TurtleBayLandCompany.com. Michael lives in Honolulu, HI, with his wife and 3 children. He hosts a weekly radio & television show, and enjoys working out, hiking and playing with his children.