12 JAN 2016 · Hello, SDI Nation!  Welcome to the show where Success breeds success.  This is Episode #2 of Self Directed Investor Success Stories. It was December 16, and it was getting cold in Northern California, with the temperature dropping below freezing for a period of the day.  Several people… fewer than usual… were standing around at the courthouse waiting for the trustee sale to begin, each producing a small cloud in front of their faces with each exhale. The same was true for Jake, the member of the SDI Private Equity team whose job is to actually win bids and acquire great properties for the benefit of my clients in the SDI Private Equity fund.  He was cold and it was uncomfortable… but he was ready, because pretty soon, a property on American street would come up for bid. Jake and I had researched that property ahead of time… and many other properties as well.  But buying foreclosures is a tough business… you’ve got to be ready to buy 10 of them in order to buy one of them.  It’s the rawest form of capitalism there is:  Highest bidder wins, and winner pays cash. So that cold morning, when the property on American Street came up for bid, Jake was hopeful we’d get it, even though the odds weren’t in our favor. But we did win the bid on that one… paying $84,000 for this property.  That was on the high side of the acceptable range, but still acceptable.  We’d already gotten a good idea about what it was going to take to renovate the property, resell it and make a nice profit.  We also knew that the house was occupied and would require an eviction before we could begin renovation work. So Jake followed our normal process and visited the property to inform the occupants of what was happening, and to give them some options to make the transition easier.  But it turned out that those occupants weren’t owners… they were renters.  And they really, really wanted to stay in that house. So, decision time.  The choices were simple:  Do we roll the dice and sell the property as a turnkey rental property to an investor?  The payoff would be that there would be ZERO renovation costs for us, as it would likely be an as-is sale.  But the risk was that the pool of buyers who are investors is much, much smaller than the pool of buyers who are occupants, thus a conventional non-investor resale could be easier. I thought it through, and decided that since we are operating in a market- Northern California – that is blazing hot right now, that it may not represent a great risk to allow a very limited period of time – 2 weeks – during which we’d put the property on the market as-is and market it as a turnkey rental.  If it didn’t sell, we’d take it off the market, perform the renovation, and proceed with the original plan. There was only one complicating factor… it was Christmas time.  And even in a hot market, there’s simply far less activity in the real estate market during Christmas and New Year’s. But I decided to take the plunge anyway.  So on December 18 – 2 days later – we listed the property for sale as a turnkey rental. And 4 days later, when I was leaving the theater from having seen the new Star Wars movie with my daughter, I got the email:  We’d received an offer. That was exciting, of course… but the offer was silly.  We were asking $125,000… they offered $100,000.  Total no-go.  We counter-offered at $126 to tell them not to bother us with any more silly offers.  That buyer actually was serious… but just undercapitalized.  Hey, I guess you can’t blame him for taking a shot. But then… just a few days later, we got an inquiry from another agent, leading to a formal offer on the 29th.  Not just an offer, but a full-price cash offer with a 10-day closing date whose only contingency was a walk-through inspection, which happened promptly thereafter. And on January 8… this past Thursday… an attorney showed up at my office in Georgia to help me execute the closing documents for this property in California.  And the next day, the proceeds of that sale hit our account. Bottom line?  We brought in a total net of over 27% on that deal for our clients in just 23 days. That, my friends, was a great way to start out the new year!  Honestly, we expected that this deal would take longer and cost more money, but still be quite profitable.  But faster is better, without a doubt. In fact, on this very day, we’re trying to acquire a property at that same auction… this property is in pretty rough shape, but I suspect things will turn out very, very well… and very quickly… which is a great thing. How about you?  Do you have some great deals of your own working… or maybe are you working with someone who is capable of deploying your capital passively, and generating strong results for you? Folks, there’s great opportunity out there right now.  It seems that bad news is all around us… weakness in China, our own stock market being very negative so far this year… and even higher interest rates from the Federal Reserve… there’s a lot of negativity out there, but here’s the question: How much of that actually matters to your wealth plan, and how much of it is just noise? What can you do to have results like this in your own portfolio? My friends, that’s all for episode #2 of SDI Success Stories. Please be sure you’re on our announcement list by texting the word SDISUCCESS with no spaces or periods to 33444.  Again, text the word SDISUCCESS with no spaces or periods to 33444 to be on the SDI Success Stories private announcement list. Tune in every Tuesday morning for a fresh episode of examples and inspiration that will show you what’s REALLY possible for you as a self-directed investor! And be sure to listen to our flagship show – Self Directed Investor Radio – every Monday, Wednesday and Friday.  It’s available on iTunes, Stitcher and at SDIRadio.com. Ladies and Gentlemen:  Success leaves clues… and SDI Success Stories is where you see those success clues every single week.  Have a great day, my friends!

5 JAN 2016 · Hello, SDI Nation!  Welcome to the inaugural episode of Self Directed Investor Success Stories! Success breeds success, and today, I’ve got a great story… a very fresh, recent story… of success by one of your fellow self-directed investors. Jim is an investor in the Dallas Fort Worth area.  He’s a great guy.  If you just call him randomly on the phone, it’s quite likely that he’ll be busy delivering food for meals on wheels or participating in his prison ministry.  Jim has many of the qualities that we should all aspire to. And one of his better qualities is wisdom in investment selection, as a recent self-directed investment proves. Jim is the user of a self-directed 401k account and he has experience as a real estate investor and has even performed some full fix-and-flip renovations himself.  That means he went out and bought a piece of real estate, put in the money and time to bring into excellent condition, and then resold it for a profit. So this guy is not a newbie in the world of real estate investing. Yet still, he was looking for something a little more “hands off”… something a bit easier, something a bit more passive. And boy, did he ever find it. Jim recognized the profit potential of the very type of investing he’d done himself – real estate fix and flips – but his “real life” left him without time or inclination to be an active real estate flipper himself. His solution? Passive Property Flipping. Passive Property Flipping is a hands-off, “turnkey” type of approach to real estate flipping where the investor – that’s Jim… or maybe even you! – partners with a third party to complete a full fix-and-flip transaction.  Jim provides the capital, the partner provides all of the work, and when it’s done well, everybody is really happy at the end. Here’s how Jim’s deal worked out. On May 28, Jim met his Passive Property Flipping partners for the first time, out in Phoenix, Arizona, the SDI Phoenix team. He met the team, listened to everything they had to say, saw several sample projects and generally did a really thorough job of due diligence on this opportunity. Jim committed to performing a transaction, and by June 16, the SDI Phoenix Team had purchased a property for Jim at the foreclosure auction for $99,000. Now this is where the story gets pretty interesting.  Rather than funding the entire transaction himself, Jim chose to use a hard money loan on this deal, meaning that his direct capital investment was substantially – and I mean SUBSTANTIALLY – reduced. Get this:  Jim’s TOTAL cash invested in this deal was a TOTAL of just under $45,000.  That was everything… Jim’s down payment, all of the renovation costs, hard money payments, and all of the other costs of doing the deal.  Jim did the whole thing for a total of less than $45,000 out of pocket. And when this property sold for $158,000 5 months after it was purchased… the total NET PROFIT on this deal was over $16,700 dollars! Now remember – Jim invested less than $45,000 on this deal… and the total net profit on it was nearly $17,000.  Actually, precisely the cash-on-cash return in this deal was over 37% in five months! That’s NOT an annualized return.  It’s a FLAT 37% in only FIVE MONTHS! Now my friends… I’d like for you to think about that.  In Jim’s VERY FIRST passive property flip transaction, his deal achieved a cash-on-cash rate of return that the S&P 500 has achieved only 2 times EVER. And remember… Jim didn’t do much more on this deal other than to fund the transaction and turn on utilities!  He never had to evaluate real estate values or hire contractors or pick up a hammer or hire a realtor. But he did do one thing I think was smart – he paid a surprise visit to the SDI Phoenix Team to check things out to see how they were going.  Hey… it was his first time doing a deal like this, and his first time working with the SDI team in any capacity… so he showed up in Phoenix one day, totally unannounced, and got the chance to peak behind the curtains. What did he think of that visit, and the broader experience?  I’ll put it to you this way:  Jim reached out to me and the SDI Team to do another transaction almost before his first one had closed! But who can blame him… 37% in 5 months is the type of return than ANY rational person would be THRILLED to experience. Want to learn more about how YOU can follow in Jim’s footsteps and generate strong returns from real estate flipping… but without being involved in the real estate side of the transaction at all?  Good news… it’s easy to get that information!  Just text the word “SDISUCCESS” with no spaces or periods to 33444.  That’s spelled SDISUCCESS.  Text SDISUCESS with no spaces or periods to 33444 right now! My friends, that’s all for episode #1 of SDI Success Stories.  Tune in every Tuesday morning for a fresh episode of examples and inspiration that will show you what’s REALLY possible for you as a self-directed investor! And be sure to listen to our flagship show – Self Directed Investor Radio – every Monday, Wednesday and Friday.  It’s available on iTunes, Stitcher and at SDIRadio.com. And remember:  Success leaves clues… and SDI Success Stories is where you see those success clues every single week.  Have a great day, my friends!