Dawn Rickabaugh - Note Queen

Yeah, sounds kind of fancy, doesn't it? The reason I'm so excited is that I really love talking to people about investing in (or divesting themselves of) property in this market. My whole joy in life is putting real estate transactions together completely outside of and apart from the institutional lending community.

When cash or cash-to-new-loan isn't working, that's when I get the chance to shine. (But seller financing isn't just a desperation tool, it can be a great estate planning tool for retirement, as well).

No qualifying for financing, no asking for a short sale . . . I don't know, I just think closing escrow is a whole lot more fun when I get to say when it closes, not some catatonic organization desperately in need of a liver cleanse. I feel more powerful that way, plus my blood pressure is more stable.

So, here is the link to the REICLA so you can attend if you want. According to the "flyer:"

Dawn Rickabaugh, Broker/Owner of Rickabaugh Realty, is known as "The Note Queen" because of her passion for real estate notes and the installment sale. She loves the dance between property and paper, and thrives on putting real estate transactions together without so much as a nod from the institutional lending community. For the last 5 years she has been buying real estate notes, buying and selling her own seller-financed properties, and helping others close real estate transactions through a variety of creative strategies as an investor and as a broker.

Dawn wants you to be able to be successful so she can buy your notes. When you learn how to do this, it is a win-win situation for all parties. Dawn is not selling any package-just her service.

You will learn how to:

• Do less and get more by becoming the bank on properties you already own
• Have twice as many buyers looking at your property
• Get top dollar by offering terms
• Close escrow quickly
• Get out from under heavy mortgage payments without short sale or foreclosure
• Sell, carry the financing, and still walk away with cash at closing
• Buy property without qualifying for bank financing
• Structure the sale of your real estate note to meet your financial objectives

I look forward to meeting you there, or on cyberspace, when you're interested in having a conversation about ways that seller financing techniques can help you get what you want regardless of what's going on in the market at large.

I had a really nice email recently that I'll share with you. It's always gratifying when someone appreciates the work you've put into something, like this Note Queen blog:

Hi Dawn,

A quick note (no pun intended) to tell you what a helpful and informative web site you have put together! I just spend an hour reading every word and I am fascinated. I am preparing offers for several properties with a business partner this week. A seller carry back will be presented as part of our offer so my finding your web site is very timely. Perhaps we can ask you assist in some capacity and do some business.

Thanks again for a great site. The secondary market of note buying and selling opens up all kinds of possibilities. My world just expanded... ;-) Thank You, Mike Hardy - President, Paradigm Mortgage Group Phone (800) 587-4096

Thanks, Mike. It'll be great to get together with you and your partners to discuss the possibilities.

These are really exciting times in real estate, especially if you're an investor. I learned so much and was very inspired by the things I heard at the kick off meeting of a brand new RE Club: Naked Real Estate Investors Club. Rosie Nieto is launching a whole new way to run a club. In her own words:

"You guys, I'm gonna try and do the impossible with my club . . .

I want to create a club that is a true, educational, networking, deal-making, friendship-making environment without all the hype, without all the sales-y, pitchy poo, crap that we have to suffer through in order to continue our education and networking in this industry.

I heard Bruce Norris say the most incredible thing a couple months back and it resonates with what I am determined to accomplish here. When he first started presenting, there was a man who he thought of as a mentor that showed up at his first several speaking engagements. He didn't really know why he was there, but he supposed that the man was just trying to support someone who was doing an honorable service to the industry.

THAT'S IT! This is what I am setting out to do. I can't stand the BS that is being feed to all of us investors by some events and gurus. We are here to be of service to others and to: "Support Those Who Are Doing an Honorable Service to the Real Estate Industry."

I absolutely love Rosie . . . she is such a delight. Not only is she fun and crazy and committed to learning, but she has the heart of a lion. Integrity saturates her flesh, right down to the bone. She truly cares about people, and is dedicated to avoiding the exploitation of novice investors.

I'm thinking that between now and the end of 2009 will be prime time to adopt a buy-and-hold mentality. My own personal goal is to pick up at least 6 properties (maybe more) that will stay in my family's wealth portfolio long term. One down, 5 to go . . .

If you're serious about learning strategies to help you take advantage of this real estate market, tap in and stay tuned to what is happening at the Naked REIC: The Bare Truth About Real Estate Investing.

Her personal blog is also a great resource.

I know wine goes well with a lot of things like cheese, crackers, fruit, dark chocolate, love . . . it's just that I didn't know it went well with a nice chat about seller financing. And actually, the more wine you drink, the better the conversation gets and the more brilliant you feel . . . that nice fuzzy feeling of, "Wow, we've really shared a nice connection here . . ."

Last night I attended a wine tasting event put on by the PFAR Charitable Foundation (Pasadena-Foothill Association of Realtors). The evening couldn't have been more beautiful as we watched the day fade over the Brookside Golf Course from the back yard of one of Pasadena's highly desirable homes.

I was all dressed up, and if I hadn't spent the evening sinking into the lawn with my stiletto heels, I'd have almost felt sophisticated.

I ended up being able to catch up with some people I haven't seen in a while, and had some nice conversations that I really didn't expect. Even just a couple of years ago, I couldn't seem to hit a single chord of resonance in this type of crowd when I would talk about notes, seller financing, carrying paper, creative financing. I'd usually get a sort of disinterested stare and I imagined them thinking, "This one needs to get locked up."

But as it turned out, I had more than one conversation last night where we were on the same page. It was nice.

One mortgage broker was interested because he owns some apartment units and would like to buy the ones next door, but the owner doesn't want the capital gains hit, and doesn't want to exchange into any more property. He owns it free and clear.

The broker got very excited when I told him that the installment sale was a perfect solution, and that I'd be happy to come in as a consultant to facilitate the deal coming together. The broker can put 20% down, so the seller can safely carry the balance in a first deed of trust.

And, he should be happy to do this when he realizes that the installment sale lets him defer capital gains. He'll only pay on the principal he receives in any given year. The rest of his money sits in the property working for him, and collecting payments on a note is easier than managing property and paying property taxes and insurance.

It'll be fun to meet with him next week. Helping people put or keep deals together by thinking outside the box is one of my all-time favorite things.

Related Reading:

• Become the Bank on Your Own Property and Kiss Your Hassles Good-Bye!
• What You Don't Know About Notes Can Cost You Listings, Sales and Closed Escrows

"Conspiracy" is a good word to use if you want to get some attention . . . did it get you to read this post? If what's going on with all the foreclosures, failed short sales and mismanaged REO's isn't a conspiracy, well then . . .

Well, I guess I really hope it IS a big conspiracy because I don't feel happy thinking that so many high-paid, Harvard-trained market makers are so stupid. It's more fun to think that some Reptilian alien race has taken over in a sinister plot to humble the US of A by creating a telepathic mind link to all those high-powered Wall Street types who were caught without their aluminum hats on.

OK . . . that was probably more than you wanted to know about the workings of my mind, but before you roll your eyes and click away to the next blog, let me tell you something about a market snapshot I just took.

I've been talking to a real estate broker over in the South Bay area who has been doing probate work for over 25 years. He's very experienced, well-respected, and carries at least 20+ probate listings at any given time all over L.A. county. I noticed recently that he was sending out distressed email flyers to other real estate agents saying, "Freaking Bring Me a Buyer, Will You??? The probate attorney wants to get paid!"

In all seriousness, the properties that are fixers are really hard to sell at "market" because FHA won't lend on fixers. He was begging me to submit something so he could move his process along, so I did - all cash offers on behalf of some investors that I know, but guess what? At half his listing price, or less. Why?

Case in point:

• 3 bedroom, 1 bath home, 1,080 sqft in Los Angeles 90002
• Listed currently at $224,900
• 265 Days on Market
• 4 comparable properties ACTIVE between $149,000 - $168,900
• 3 PENDING properties from $113,900 - $169,900
• 1 SOLD in the last 4 months at $160,500
• Everything else is EXPIRING unsold

When I ran a title search to see what was closing, I saw that out of 18 deed transfers, 13 were obviously trustees deeds. That means that 72% of the property transfers were from banks foreclosing and taking back property. So anyone trying to sell a house in that neighborhood was competing with REOs who really do have to sell at some point, whether on the open market, or at an auction (where they'll get even less).

Umm, when Trustees Deeds represent almost 75% of property transfers, there's a problem, and one that will continue to feed on itself in a negative fashion, with or without Reptilians.

So here's where I'm saying to this probate attorney,

"Frank, (his name has been changed) you've got to get some of your clients to consider carrying paper on this stuff. They could use Seller Financing to get a decent price, and if we underwrite the deal properly, they can sell the note and still be better off than taking the low-ball cash offers an investor is going to make. Even taking .80 cents on the dollar on the note, they're going to probably walk away with at least $25,000 more, bottom line."

I think I got his attention, so we'll see where that conversation goes. But I need to go . . . this post is already too long.

So, make a comment, will you? Or email me to explore this whole idea.

Can the housing market go down another 10% or 20%? "Sure," grumbled Robert Toll, CEO of Toll Bros.

The head of the nation’s biggest homebuilder had reason to be grumpy . . . Toll Bros. just reported its third straight losing quarter. Revenue has fallen 30% from this time last year. Toll went on to say the housing market was in a “depression” and that recovery could be up to three years away.

“I believe the industry will continue to face rising pressures,” echoed D.R. Horton CEO Don Tomnitz, “for certainly the next 12-18 months. 2010 will be the earliest we get a more solid homebuilding environment."

So how did San Marino do in March of 2008 compared to the national decline of 14% for the month of March, and the home builders' stresses?

Well, any time you see such a dramatic reduction in inventory, you know changes are afoot. 14 homes sold in 91108 in March of 2007, only 6 in March 2008. That represents a 57% decline in the homes sold. Holy cow.

However . . . The odd odd thing is that prices are going up, on all accounts. Median home price in San Marino for 2008 was $2,100,000, up 57% from March 2007. Weird, isn't it? I don't know, I guess for the short term I'd have to say that sellers are better off now than they were last year. But it's kind of like a particular stock making a large leap in trading price on low volume . . . it may not have the support it needs overall.

So will the home prices last?

I mean, in what other city are sellers getting MORE than 2007 prices??? Crazy! Perhaps God loves San Marino . . .

I'd have to say I'm not so sure. It feels like that odd green air just before a tornado touches ground . . . things are just a little too quiet.

If you are going to need to sell within the next couple of years, SELL NOW!!! Or be prepared to wait at least another 3-5 years for things to turn around.

How can prices continue to rise when foreclosures (vacant properties) will represent 75% of the transfers recorded in L.A. County within the next 6-9 months??? Most people tend to think that some areas are divinely protected, and some really do seem to be. The thing is, there are national and even global influences yet to shake out, so don't get lulled into a sense of security just yet.

If you need to sell within the next couple of years, sooner is better, and price it right out of the starting gate, for heaven's sake. Chasing the market down isn't nearly the wonderful exercise it sounds like it should be . . . Pilates is way better.