Consistent and Focused Actions Lead to Successful Results

Remember the slogan, “you reap what your sow?” To get the results that you desire, like finding great deals or new investors, you need to stay focused on doing the things – the actions – that lead to your desired results, just like the Law of Cause and Effect.

The Law of Cause and Effect dominate our lives. Everything you want or desire is the EFFECT, and most people fall in love with the EFFECT.

All EFFECT’s are the result of some CAUSE – some action. The question for you is this: Will the CAUSE you are implementing produce the EFFECTS you desire?  Are you taking consistent and focused actions – the CAUSE – to get the EFFECT you want?

If you believe it will, then do not give up on it. It might take time, but if the CAUSE is the right one, then stay with it until or unless you have proof that there
is a better way.

It is so easy to fall in love with the desired EFFECT… i.e. getting rich, having a great relationship or a having a great body. That is easy.

What we should be doing, however, is falling in love with the CAUSE – the actions -all the things we should be doing to achieve the EFFECT. Visualization without action is delusion.

Don’t start worrying about whether or not you will achieve your long term dreams. Maybe you will and maybe you won’t. The much bigger thing to think about is this: Who will you become in the process of going for it. And, if you are doing the right things; doing the right actions on a consistent (daily) basis, the EFFECT will take care of itself. It is all a matter of belief.

We tend to only water the gardens we know that will grow – the gardens where we have planted seeds. We keep watering week after week, pulling weeds and fertilizing, because we believe that what we have planted will grow. If you have planted something, and you are taking consistent, daily action, then you are in the process of having what you want – the EFFECT.

So, make sure you are taking consistent and focused actions so that you get the results you are seeking. Everyone who is at the front of the line started out at the back of the line and the key to success is to get in line and stay in line.

I hope this tip serves you. I look forward to helping you reach for the stars!


Craig Haskell

Warren Buffett’s best investment? – the single-family home!

Warren Buffett’s best investment?  Now it’s the single-family home!

Warren Buffett, chairman and CEO of Berkshire Hathaway, is widely regarded as one of the world’s most successful investors. He recently appeared live on CNBC’s Squawk Box program, Monday, February 27, 2012, for his annual “Ask Warren” three-hour marathon. Among the many topics covered was the housing market. Here is Warren’s latest advice on investing in that area.

Buffett began by pointing out, “…equities are still cheap relative to any other asset class,” but added, “I would say the single-family homes are cheap now, too.” He then made this startling statement:

“If I had a way of buying a couple hundred thousand single-family homes… I would load up on them.”

He admitted that he would need a way to manage so many residences: “… the management is… really the problem because they’re one by one. They’re not like apartment houses.” But if it were practical, he would “load up on them and I would take mortgages out at very, very low rates.”

He then offered an insightful summary of the current situation in the housing market: “If anybody is thinking about buying a home — five years ago they couldn’t buy them fast enough, because they thought they were going to go up, and now they don’t buy them because they think they’re going to go down. And interest rates are far lower.”

Keying off the low mortgage interest rate situation, he pointed out:

“It’s a way, in effect, to short the dollar, because you can take a 30-year mortgage and if it turns out your interest rate’s too high, next week you refinance lower. And if it turns out it’s too low, the other guy’s stuck with it for 30 years. So it’s a very attractive asset class now.”

Buffett was then asked, point blank, if he were a young individual investor who had to choose between buying a first home or investing in stocks, which one would be the better bet? His characteristically direct answer:

“…if I knew where I was going to want to live the next five or 10 years, I would buy a home and I’d finance it with a 30-year mortgage and it’s a terrific deal.”

He followed that with this business idea:

“… if I was an investor that was a handy type, which I’m not, and I could buy a couple of them at distressed prices and find renters — and again take a 30-year mortgage — it’s a leveraged way of owning a very cheap asset now and I think that’s probably as attractive an investment as you can make now.”

And a final note: Buffett wrote in his latest letter to Berkshire Hathaway shareholders: “Housing will come back — you can be sure of that.”

Check out the video:

Is Your Real Estate Investment Structured To Lower Risks While Increasing Profits?

Is Your Real Estate Investment Structured

To Lower Risks While Increasing Profits?



cashflow from real estate investment

One of my most prized skills as a professional investor is my ability to sniff out amazing real estate investment opportunities and then engineer creative and lucrative deal structures to lower investment risks while increasing investor profits.

While choosing a strong market and property are certainly important pre-requisites to a successful real estate investment, I view individual properties as pawns in a larger game of financial strategy; the financial and ownership structures surrounding a real estate investment have more impact on my bottom line than the sticks and bricks in the transaction.   I’ve simplified some of these strategies into sound bites to help you do this.   Even though investing tends to be based on each investor’s personal investment philosophy than universal rules, I call these sound bites “Hassle-Free Cashflow Investing Rules” .  

Hassle-Free Cashflow Investing Rule: Buy what tenants want.

It’s a lot easier to purchase a real estate investment your tenant wants to live or do business in than it is to convince a tenant to want to live or do business in a property you already own.

In today’s buyer’s market, there are a lot distressed commercial properties that need to be repurposed to a higher and better use.  The economic collapse of the community banking business model as well as technological advances in online banking have resulted in a slew of vacant bank properties and very few banking tenants looking to lease them.    It would be a bad business plan to acquire a vacant bank and try to release it to another bank.  My partners and I recently acquired a vacant bank property we are converting to a Class A medical office building because that what tenants in this area are looking for. We started with the tenant and then located the property.  My team brought the active management / sponsorship / development resources to the project and several of my clients provided the passive equity for the project.

Hassle-Free Cashflow Investing Rule: Start with a real estate investment business plan not with a property.

Our business plan is to purchase vacant (bank) buildings and convert them into medical office.  Our real estate investment strategy was to identify a strong primary care physician group to be the anchor tenant and then go shopping for a desirable property together.  The anchor tenant physician located a vacant bank building in a fantastic location where he would love to locate his business.   The property is on a major thoroughfare with good signage visibility, close to a hospital and in a large population center. These are promising attributes for any medical office, but there were positive attributes about this particular property that appealed to the tenant which I would have never thought of.  First, the tenant needed a property that could easily accommodate ambulance access.  Second, the tenant wanted a property in a “health professional shortage area” (HPSA) with a specific HPSA score that increased the amount of government subsidies doctor tenants in this building would receive. If your HPSA score isn’t strong enough you may have difficulty attracting doctors to your building and you may have to lower your rents to do it.  HPSA scores change street by street based on census data.  In effect there is an invisible line down the street that says “this property is more valuable as medical office than the property next door” because of where the line is drawn.

Hassle-Free Cashflow Investing Rule: It’s essential for a prospective landlord to listen to their tenants and discover what they value most.

I steer new investors towards owning houses as their first investment because it is fairly intuitive to understand the amenities residential tenants will pay for and what they won’t pay for (number of bedrooms, proximity to jobs, etc.).  When you are in the world of commercial real estate, prospective tenants are fewer and their needs are more exact.   Instead of starting with a property, it can be much more lucrative to go shopping for a property with a prospective tenant or buy a property with a strong anchor tenant in place and fill up the surrounding vacancies with those types of tenants who have a proven history of success co-locating with your anchor.

Hassle-Free Cashflow Investing Rule: For a real estate investment partnership to be successful each partner needs to offer a resource the other does not possess.

The basis of my value proposition to the primary care “anchor tenant” looks like this:  “You become the anchor tenant in our multi-tenant office building and invite the doctors who receive your patient referrals to lease additional space.  My team will put up most of the money as well as the real estate skills needed to purchase a vacant property, redevelop it into a large multi-tenant office, and then manage the mechanics of the property and a complex financial transaction.  We each bring something unique to the partnership and we’ll co-own the property in partnership together.”   By partnering with my anchor tenant, I am 100% confident our building will have higher rents and a higher rate of occupancy than if I were trying to do this real estate investment on my own.

Hassle-Free Cashflow Investing Rule: Privacy can be a valuable tool in your real estate investment arsenal.

My anchor tenant physician located the property he felt was perfect for his practice.  It became my team’s job as the real estate professionals to negotiate a favorable price and terms with the seller.  We put on our best poker faces and made sure the seller did not know the identity of our high profile physician tenant by writing the offer in the name of an entity controlled by my team.  It appeared the seller was distressed because the property was vacant and the seller’s prospects for finding another bank tenant were slim, but if the seller knew who our tenant was our intended use of the property the price would have surely gone up.  It was easier for my team to negotiate aggressively with the property seller because we were not as emotionally involved with that specific property, as our anchor tenant was.

Although we had a property identified and an anchor tenant lined up, there were still miles and miles to go before we had a viable project.  It took a lot of time and resources for my team to develop financial forecasts based on rental income, operating expenses, redevelopment costs, availability and costs of capital, etc.   It took months to create architectural drawings and use those drawings to entice prospective tenants to sign binding leases in our property.  It took weeks to get our building permits and change of use permits approved by local government.  And then there was the financing!  A huge risk in purchasing any property in this economy is the availability of conventional financing.  A lot of banks that issue attractive terms sheets for commercial loans only to back out at the closing table, leaving you scrambling.

Hassle-Free Cashflow Investing Rule: Shift as many financial risks as possible from the Buyer (you) to the most motivated party in the real estate investment transaction (usually the Seller).

In our project, we were able to negotiate a four month escrow with the ability to extend the escrow an additional three months if required by our lender.  We used this extended escrow to complete all of our pre-development activities.  Architectural plans were drawn, leases were signed, permits were approved, guaranteed maximum price bids were solidified with our construction contractors, and we had time to shop the debt and equity we needed for this project.  Our long escrow period shifted all of our pre-development carrying costs onto the seller and more importantly we drastically reduced investor risk.  In the event we were unsuccessful leasing the building during the escrow period, we structured the purchase contact such that we could cancel with no penalty and thus dodge the bullet of purchasing a vacant, unleaseable building.   We eventually closed escrow on the property without ever putting a dollar of earnest money at risk and all of our architectural fees were paid at closing after we’d raised all of the capital through syndication!

This business plan worked out well and I am grateful to have a strong team and partners to work with which is why I can write this newsletter with a smile on my face, but not every real estate investment is smooth sailing.  I invest a lot of resources into real estate investment projects that never go anywhere; that is just part of the cost of doing business.  As a professional investor, it is my job to forecast where the hurdles of each real estate investment might be and determine the probability of clearing these hurdles while putting the least amount of capital at risk.

Hassle-Free Cashflow Investing Rule: Novice investors will make mistakes and that’s OK as long as you’ve started small.

A great place for new investors to start is the acquisition of like new construction, entry level single family homes purchased from a developer who offers a builder’s warranty and investor-friendly terms is. The process is not complicated, you can do your due diligence while putting little or no capital at risk, and the opportunity to learn from the experience is high while the risk is low.  This is more than a shameless plug for my homebuilding company that sells positive cashflow, like new homes with creative investor financing.  I really want you to take this paragraph to heart and not overextend yourself on your first few deals.  When you are a new investor, your first few deals should be as simple as possible so you gain experience, confidence, and a positive track record to set you up for future deals.  As you grow and diversify your real estate investment portfolio into more complex transactions, consider becoming a passive investor in group investments with sponsor who can mentor you through the process.  My first venture into medical office development was simply writing a check to another developer who did all the work and mentored me through the process.

You can read about real estate investing all you want, but until you’ve jumped into a deal with both feet, you’re still a newbie who doesn’t know what he doesn’t know.  If you want to lower your real estate investment risk while simultaneously venturing into potentially more lucrative ventures, let’s talk.  I am a teacher at heart and I love mentoring new and part-time investors.  If you are looking for a real estate investment to work hard so you don’t have to, my team can also help you become more of an armchair investor.

Regardless of your real estate investment style.  If you’d like help lowering your investing risks while increasing your real estate profits, please reach out to me and I’d be happy to help.

To your success!

David Campbell
Professional Real Estate Investor
(866) 931-9149 Ext. 1

Keyword: real estate investment

Keep the Receipt or Lose the Deduction

Record keeping – Keep the Receipt or Lose the Deduction

by Renee Daggett

Time after time, there are rulings from the IRS stating someone lost their deductions due to bad record keeping.

Karen Hough had to pay $100,849 in taxes because she “estimated” the business expenses. She relied on her testimony to prove the deductions, while the IRS required documentation. She did not have cancelled checks or receipts. The IRS could see she spent money, but because she could not prove the items purchased, the deductions were denied. There were no excuses.

I had someone ask me why they should keep their receipts when they charge all their business expenses on a credit card. The reason why you keep a legible receipt is that if you are in an audit, the IRS will NOT accept the line on a credit card statement saying you purchased items from Staples. They need the original receipt or a readable copy. If you don’t have the receipt, the auditor can say that you purchased school supplies for your kids and not believe you purchased office supplies for your business. The deduction would be denied. Do you save all your receipts? Do you copy the thermal receipts because they will fade after 2-3 years?

To keep your record keeping life as simple as possible, have one business checking account. Run everything through this account. This way you can track income and expenses in one place. I pay $1 a month to have my business checks mailed back to me so I don’t have to print copies of checks online. I know most banks go back months or even a few years, but if you are audited, it can be 3 years later and who wants to print each check online? Plus, I work with many banks and some don’t go back 3 years. I have had clients have to pay large bank fees to get copies of checks. No fun!

The IRS requires that you keep a log of your business miles. This includes starting and ending odometer, date, business miles driven and business purpose. Your calendar and your receipts will help indicate where you drove. Don’t forget to count your deposit runs to the bank!

You need to train yourself (and your staff) NOT to use cash. Cash is so hard to track. If you lose the receipt, you probably won’t remember what you purchased…thus missing a deduction you were allowed to take.

For meals and entertainment expenses, you are required to document who, where, when, why and how much. You have to indicate WHO you were with and why you entertained this person.

So how long do you need to keep your receipts? You can amend a tax return (or be audited) 3 years back. However, if you underestimated your income, the IRS can go back 6 years. If you did not file or filed a fraudulent return, the IRS can go back many years as they want. Also, if you purchase assets and they are depreciated over a period of years (5, 7, 15 years), you need the original receipt for that period of time.

Bottom line is that you need to PROVE everything you purchase for your business. Do you have written documentation that if you were audited there would be no change in the taxes due? I hope so!

Renee Daggett is the president of Administrative Bookkeeping Co., Inc. She received a bachelor’s degree from San Jose State University in 1989 and is an Enrolled Agent tax preparer (enrolled to represent tax payers before the IRS). Renee is also the author of “Your Financial Flight Plan: Pilot Your Business To Profitability.” In her book, she demonstrates in a creative way the reasons why every business owner needs to be a better manager of his/her business.

Renee Daggett, Enrolled Agent


Think of the investor mistakes you could avoid if losers gave seminars

I cautioned my son a hundred times about keeping his distance from fire, but not until he stuck his curious little finger into a candle flame did he learn the meaning of “Be careful, son. That’s HOT!”

Behind closed doors I’ve been known to say, “You aren’t truly an investor until you’ve lost it all and know how it feels to be a loser.”

Once you’ve experienced loss, you never want to experience it again. Fortunately, losing is an event, not a permanent situation.

“Risk adjusted return” is a theoretical concept to a newbie investor, but it is an indelible, searing reminder to someone like myself who has ridden the financial roller coaster up and down and back up again. Thankfully, the experience of loss is a lot easier to talk about when you are no longer broke.  As actor Mike Todd famously said, “I’ve never been poor, only broke. Being poor is a frame of mind. Being broke is only a temporary situation.”

I am fortunate enough to be on the teaching faculty with Robert Kiyosaki on the 2012 Investor Summit at Sea.

In Mr. Kiyosaki’s best selling book Rich Dad, Poor Dad, he tells the story of building a multi-million dollar nylon wallet company from nothing and then going broke. He went from multi-millionaire to living in the back seat of his car. I think we all know he’s doing pretty well for himself today.

The up and down process of wealth is a character-building and wisdom-building experience you can’t comprehend until you’ve lived through it. We’ve all heard stories of Wall Street bankers jumping out of windows because their entire financial portfolio evaporated over night. While I can relate to the immense sadness and self-doubt that comes from catastrophic financial loss, I can’t comprehend taking my own life over something so ultimately trivial as money.

Money is a vehicle that has the ability to take you to a lot of amazing places, but the vehicle itself will never bring you happiness. Appreciating the journey is only thing that will bring happiness, regardless of whether you are driving a Porsche 911 or riding the bus. When you truly comprehend that your net worth is not a measure of your self worth, then real wealth building can begin.

Like anything else, investing is a sport we learn by doing. If you want to become a professional investor, you’ll need to practice a lot and sometimes that means falling down. You can talk about investor theory until you are blue in the face, but until you’ve invested through an up cycle AND a down cycle you will make rookie mistakes like everyone else. It’s called seat knowledge and there is no way to avoid it. However, there is a way to mitigate it and that is to learn from an investor who has made and lost and remade their fortune again and is not afraid to talk about it.

One of those people is my friend, mentor and investment partner – Mr. Ken Gain. Ken has been a real estate investor for over 50 years!!! He was a millionaire in his 30s but went bankrupt at age 47 in the Alaska real estate crash. “That almost cured my real estate addiction,” he says. “But by getting back into real estate, I have again prospered”. He tells his investor clients that “my greatest value is that I have made almost every possible mistake but have still prospered. Think of what you can do by avoiding my mistakes”.

In this sixty minute free webinar with professional investors David Campbell and Ken Gain. We will do our best to help you learn these powerful investor skills:

1) how to identify investment opportunities and business relationships that will bring you future prosperity AND current happiness.

2) how to create financial abundance without ruining your health, happiness, and relationships to get it.

3) how to clearly identify what you want out of life so you will make better investment decisions


Ken Gain has been a real estate investor for over 50 years!!! He holds professional designations in appraising (MAI), syndication (SRS), commercial / investment real estate (CCIM) and real estate counseling (CRE).  He was a millionaire in his 30s but went bankrupt at age 47 in the Alaska real estate crash. “That almost cured my real estate addiction”, he claims. “But by getting back into real estate, I have again prospered”. He tells his counseling clients that “my greatest value is that I have made almost every possible mistake but have still prospered. Think of what you can do by avoiding my mistakes”.



Three Cashflow Ideas for Thriving During Rapid Change

Learn professional investor David Campbell‘s predictions for the US economy, and cashflow strategies to profit from an elongated recession and impending inflation.

IDEA #1: Learn and grow. Don’t cling to your parent’s or mutual fund sales person’s antiquated ideas about cashflow and money.

Imagine you’re applying for a job in computers. You’re confident. So what if the last computer skill you learned was in 1989? How much do things really change? Floppy discs, dial-up modems; you know your stuff! But then your potential employer wants to know about your proficiency with cloud technology, CRM databases, SEO optimization, and social media. Uh-oh…

Now apply this analogy to the world of personal finance.

The financial ideas that worked yesterday, last year, last decade, are completely ineffective in today’s economy. In today’s financial world, change is the only thing you can be certain of. You need to keep your financial knowledge current or the consequences to your cashflow can be unpleasant at best or devastating at worst.

cashflow from Investment Real Estate

IDEA #2: Savings are more important, but hording cash will bankrupt you.

Think of cash as milk. You always need some in the fridge, but it has a relatively short expiration date. The US government is doing everything it can to slowly and steadily erode the value of the dollar. Why slowly and steadily? If the value of the dollar is eroded too fast, there will be social unrest. If the value is eroded too slowly, US exports are too expensive in the global market and the cost of the US debt becomes unmanageable. The US can only afford to pay its debts if we pay them with devalued (inflated) dollars.

What does this means to you? While cash gives you a cushion against an uncertain job market, cash is steadily losing value. Make sure you’ve saved enough cash to shield you from an interruption in your income stream. However, once you have your cash security blanket in place, excess cash and non-inflation adjusted cashflow could be considered a LIABILITY because it is continually going down in value.

While the government is “targeting” a long term inflation rate around 2-3% per year, as consumers and businesses hoard cash during uncertain times velocity slows and monetary policy makers are “forced” to speed up the printing presses to compensate. The next round of TARP funds is already on the way to shore up real estate values and quadruple the cost of your groceries.

If you don’t have enough cash to grease the wheels of life you will certainly have a difficult time surviving. However, if your primary investment focus is accumulating cash reserves in savings accounts and CDs, you will get wiped out by the coming inflation.

IDEA #3 Create multiple streams of inflation adjusted cashflow.

Creating an inflation-adjusted cashflow stream gives you freedom, simplicity, and control over your finances. Investments that generate inflation-adjusted cashflow can avoid the ups and downs that give heartburn to investors focused on building a high net worth. If you own a valuable widget making machine but it isn’t turned on, you may as well not even own it. Focus on turning idle equity into cash flow. Turn pools of cash into streams of cash. There are a lot of “wealthy” people going bankrupt because they planned on selling assets with equity to cover their cash flow needs. But your grocer won’t accept an equity interest in your assets as payment; your grocer only takes cash. You never want to liquidate an asset because your grocery bill is due. You want to liquidate an asset when the marketplace tells you the time is right.

I meet people all the time who are struggling with cashflow and yet they rush to pay down their mortgage. When you pay down your mortgage, does your monthly cashflow improve? Absolutely NOT!!! Your loan will get smaller and you will save on interest costs, but that savings is not realized for decades (unless you refinance and amortize your debt over a longer period of time). Don’t try to solve a cashflow problem by turning useful cash into idle equity.

A client of mine once had a house worth $600,000 with a $480,000 mortgage. He made extra mortgage payments to get his loan down to $400,000, but then a funny thing happened. The house dropped in value to $400,000. Where did his equity go? Where did his cash go? BOTH GONE!!! Even though his mortgage balance was smaller his payments were the same. A much better solution would have been for him to leave his mortgage alone and take the cash intended for amortization and invest it into a cashflow investment vehicle. If my client had done this, he would have a $400,000 house with $480,000 of debt and an $80,000 investment generating cashflow. In both situations my client’s net worth would be the same, but in the latter solution my client’s cashflow would be radically better.

In the following free investor training video which is part one of a three part webinar series you will learn:

1) about currency devaluation, why it’s happening to you, and what to do about it.

2) why the global recession will get worse and which investments you absolutely want to avoid!

3) how to leverage these “interesting times” to your profitable advantage

I hope you are able to use these cashflow ideas to thrive during these times of rapid change.

Investment Real Estate and Einstein’s Theory of Relativity

To My Friends interested in Investment Real Estate

A highly simplified version of Einstein’s theory of relativity says that in order for low to exist, there must be also be high.  In order for Winter to exist, there must be Spring.  One extreme cannot exist without the existence of its opposite.  As the great Jim Rohn says, “How often does Spring follow Winter?  Every time! ”  This means that if we are living in an economic Winter, Spring MUST be around the corner.

cashflow from Investment Real EstateAs inflation and interest rates increase, rents are very likely to increase at the same rate.  If you acquire positive cash flow investment properties using today’s long term low interest rates,  your ownership costs should stay the same while rental income should increase with inflation.  Now is the perfect time to set yourself up to receive very high investment yields from positive cash flow real estate.

Investment Real Estate Money Making Action Items:

1) DO acquire positive cash flow properties with cheap long term financing.
2) DON’T sit on cash for too long as its buying power will soon be eroded with inflation.
3) DON’T sit out of the real estate market waiting prices to come down.  Interest rates are eventually going up and the cost of a $125,000 mortgage payment at 5% is LESS than a $100,000 mortgage payment at 6.75%
4) If you already own negative cash flow real estate with no equity, consider buying more positive cash flow properties using your currently good credit, and AFTER you’ve monetized your good credit, you can consider doing a short sale on your negative cash flow / negative equity properties.

5) If you own negative cash flow real estate WITH equity, consider using your equity as the down payment on a positive cash flow or neutral cash flow asset.  You can stimulate the sale of your property and probably achieve a premium price for it by being a buyer of someone else’s property. As a condition of purchasing the Seller’s property require that the Seller must purchase the property you want to get rid of.  This is called a “must take” in equity marketing and is a great way if you are trading up in asset value and adding cash to the transaction.  For example, if you have a $100,000 property that is negative cash flow but has $25,000 of equity, you can buy a $300,000 positive cash flow property by bringing in additional cash and financing to the table.   The person buying your property will get $275,000 cash and $25,000 of equity in your “must take” house.

I enjoy coaching investors. If you want to schedule a time to talk about your unique situation, you can book an appointment with me online:

Warm regards,

David Campbell
Professional Investor / Author / Real Estate Developer

Investment Real Estate Specialist

Are Passive Investments in Real Estate Right for You?

Are you looking for a simpler and more passive investing experience?  If you’ve considered being a passive real estate investor, this introductory video will give you some excellent ideas on where to get started as an investor in group investments (aka real estate syndications).

Not everyone is qualified to participate in a passive investing opportunity. You need some training to be able to make a good investment decision; you need a relationship with a strong sponsor / management team;  and you need a minimum amount of discretionary income and discretionary capital to invest.

However, if you have cash, cashflow, equity, or self-directed IRA funds to invest, passive investing in real estate can produce exceptional returns with a minimum of time and a minimum of hassle.

* Want to take advantage of today’s low interest rates, but can’t qualify for a loan?
* Want to earn while you learn about group investments, commercial property, and larger opportunities?
* Want to own profitable commercial property, but don’t have the skills or capital to do it on your own?
* Want to convert your future paychecks into a down payment today without having to sign on a loan?
* Want “forced equity” as part of your investing strategy, but are too busy or inexperienced to make it happen on your own?
* Want to own highly profitable and cash flowing real estate with a minimum of hassle?
*  Want the superior investment returns that  come from “needle-in-the-haystack properties”?

passive investing with hassle-free cashflow investmentsPassive investing in a real estate syndication is like owning stock in a small privately held company.  Imagine opening your mutual fund portfolio, and deciding to call up the fund manager.  Pretty unlikely that you can find his name, let alone his number.  Even if you could find his number, would he even take your call?!?!?  Most people are invested in stocks managed by nameless, faceless people on Wall Street.   Participating in a real estate group investment sponsored by a small, hands on company usually means you have a personal relationship with the people managing your money.  Isn’t that how it’s supposed to be?   I can empathize with the protesters in the “Occupy Wall Street” movement, because they feel totally disconnected and disenfranchised from their money and the people who have control over it.  One of my clients is a very conservative, Christian woman who was mortified to discover that her “financial advisor” (aka mutual fund salesperson) had been investing her retirement funds in companies that produced pornographic films.  The financial planner’s response was “I don’t know why you’re so upset, because your stock is up 20%”.  This client promptly moved her money into providing clean, safe, affordable rental housing and has been sleeping better ever since.


One of the best ways to regain power in your life is to understand where your money is invested, what it is invested in, why it’s invested there, who is accountable for watching over it, and when is your money coming back (hopefully with friends). 

Typically, the simpler the investment – the more likely it is to be successful.  Let me try out a simple one with you.  “People live or work in my property and pay me rent.”  Anyone with an IQ higher than a brick can understand that business plan.  However, as simple as it sounds, we all know that it takes an experienced and specialized team to help you execute the nuts and bolts of any business plan.   Owning real estate is a business. It has moving parts.  You have to manage people, income, expenses, and property.  Real estate can get messy and not everyone is cut out for it. 

However, if you want the advantages of owning real estate (and there are a lot of them) without getting your hands dirty, you should definitely consider passive investing in a group investment.   It is possible to own investment quality income producing, dividend paying, cash flow positive, institutional quality real estate without ever leaving the comfort of your armchair. 

Passive investing in real estate group investments can be an amazing vehicle to consider for:

1)  IRA funds

2) busy people

3) high income earners

4) foreign investors

5) those who can’t qualify for a loan

6) novice investors

7) hands off investors

8) people who want to earn while they learn

9) investors who want geographic diversity

10) investors who want property type diversity

11) investors who want to force equity but don’t have the time, skill, or relationships to do it themselves

12) investors looking to own a small piece of a “bigger” or “more interesting” deal


If you are intrigued by the idea of using your cash, cash flow, or equity to leverage:

* Other People’s Time

* Other People’s Skills

* Other People’s Relationship

* Other People’s Credit

* Other People’s Money

You need to watch this twenty-eight minute educational video.  There is nothing for sale on this video, but if you would like to talk about actually investing in a group investment, please call me, David Campbell, at (866) 931-9149 Ext. 1  or send me an email ( to schedule a time to talk.  In a 30-60 minute investor strategy consultation, we can help you determine if real estate group investments are an appropriate addition to your passive investing portfolio.

Is passive investing right for you?


Keyword: passive investing

Tax Planning Strategies for Real Estate Investors

Tax Planning … It’s not about how much you earn.  It’s about how much you keep! Learning how to legally avoid or defer the payment of income taxes is essential to your financial success.   Our world class faculty will show how real estate investors can legally earn more while paying less in taxes.  This webinar recording is suitable for experienced and novice real estate investors.


Tax Planning Strategies for Real Estate Investors

You will learn:

1) Urgent year-end tax moves every real estate investor must be aware of
2) How to take advantage of special 2011 tax deductions before they expire
3) How to get the IRS and your tenants to pay for a healthier retirement than you thought possible
4) Ways to ensure your self-directed IRA stays tax deferred
5) Which investments you should own personally and which investments you should own inside an IRA to optimize your tax advantages
6) How to identify and use your eight essential resources to legally earn more and pay less in taxes
7) Strategies to produce cash flowing real estate profits without the hassle and without the tax
8) Time sensitive legal considerations that could have a huge impact on your taxes



You can download the slides from this presentation HERE.

In this ninety minute free webinar, you’ll hear from:

  • professional investor / developer David Campbell

  • self-directed IRA company president Kaaren Hall

  • veteran tax strategist Amanda Han, CPA

  • real estate attorney Jeff Lerman

  • estate planning attorney Michelle Lerman

This webinar is appropriate for both new and well seasoned investors.   While this webinar will be recorded, you’ll get the most out of the experience by attending live so you can ask questions.   Sign up early because space is limited to just 100 participants.


DAVID CAMPBELL – professional investor / developer

As a real estate developer, investor, syndicator, and broker, David Campbell has been a principal or key advisor to over $800 million of real estate transactions including apartments, office, retail, hospitality, winery, condo-conversion, and production home building. David’s companies have held real estate interests in California, Texas, North Carolina, Delaware, Canada, Mexico, and Belize.
Believing that properties do not have problems, people do, David takes a people first approach towards finding creative solutions for properties and the people who own them.  David has a gift for implementing creative financial solutions. Starting with an assessment of an investor’s strengths, David finds ways to leverage those strengths to maximize profit while minimizing investment risk and minimizing hassle.

Kaaren Hall  – president of uDirect IRA Services

Kaaren has helped hundreds of people self-direct their retirement savings. A native of California, she has a 16-year background in Real Estate, Property Management and Mortgage Lending. She has worked at such companies as Bank of America, Centex Homes, Pulte Homes and Indymac Bank. She’s held a real estate license in Washington, Texas and California and a Life & Health license in California. Her company, uDirect IRA Services, LLC, offers self-directed education and services to investors, providing excellent customer service. Kaaren is a public speaker and master networker. A mother of two, she lives in Orange County.  Educating individual investors and professionals is the cornerstone of uDirect IRA Services. We have events right here in Southern California geared toward self-directed investing. We also offer webinars so no matter where you are you can “Learn to Earn”. uDirect IRA Services provides complete and accurate information on self directed IRAs so you can make the most of your retirement funds. We do not promote any investments. Rather, we provide the knowledge, tools and information you need to make self-direction easy. At uDirect, we help you get started quickly and easily, and stay with you every step of the way.

Amanda Han, CPA – tax strategist

Amanda Han is a tax strategist who specialize in creating cutting-edge tax saving strategies for real estate investors. As a real estate investor, Amanda and has an in-depth understanding of the various aspects of investing including taxation, deal structuring, entity structuring, and money-raising. Amanda is a frequent speaker and educator on tax strategies especially for real estate investors¬†and has recently been selected to be the Lead Instructor for the National REIA Organization teaching investors all across the nation on how to use taxes to significantly increase monthly cash flow. Amanda has also appeared on NBC News Radio as well as Realtor Magazine.  FREE DOWNLOAD of Mrs. Han’s ebook “How to AVOID UDFI Taxes when investing with Retirement funds”

Jeffrey H. Lerman – real estate attorney

One of the things clients say they most appreciate about Mr. Lerman is his ability to take complex legal concepts and information, synthesize it and present it in a way that allows an investor to make a good decision quickly. Mr. Lerman handles acquisitions and sales, entity formation, syndication, commercial leases, loan documents, construction documents, loan work-outs and litigation. Mr. Lerman frequently lectures on various real estate and litigation topics, has written numerous articles and has been featured in national news.

Michelle C. Lerman – estate planning attorney

Michelle C. Lerman is at the forefront of current developments in estate planning design strategies. A highly sought-after speaker in the community, Ms. Lerman has been helping clients with their estate planning needs for more than 20 years. She serves on many boards and mentors upcoming attorneys as well. At ease on the air or in the courtroom, Michelle C. Lerman has helped hundreds of clients with her creative solutions and solid advice about estate planning.


End of the Year Tax Planning Strategies for Real Estate Investors 

Copyright © 2011 Hassle-free Cashflow Investing, All rights reserved.

 We hope these strategies help you earn more while legally paying less tax.

Making Real Profits from Real Estate Knowledge Webinar Slides

Professional investor David Campbell shares real life examples of how he turns real estate knowledge into real estate profits by walking you through a multi-tenant retail center deal.  You’ll be blown away at how many creative investing strategies you’ll learn in this ninety minute FREE webinar. Find out how David Campbell uses creativity and his seven essential resources to put together a million dollar real estate transaction. This webinar is appropriate for both new and well seasoned investors.

Using a Self-directed IRA to Create Hassle-free Cashflow

Here are the slides from our webinar “Using a Self-directed IRA to Create Hassle-free Cashflow” presented by David Campbell and Kaaren Hall – CEO of
Professional real estate investor David Campbell and Kaaren Hall president of uDirect IRA Services share the philosophy, strategies, and tactics behind using a self-directed IRA to create hassle-free cashflow.In this webinar  you are guaranteed to learn:

1) what is a self-directed IRA and why almost every American needs one

2) how easy it is to set up and manage a self-directed IRA

3) how to make sure your self-directed IRA stays tax deferred for as long as you want it to

4) how to use your self-directed IRA to retire younger than you thought possible.

5) the pros and cons of owning real estate in a self-directed IRA

6) how to get the best financing for your self-directed IRA

7) the difference between UDFI & UBIT and how to minimize your tax bill

8) which investments should you own personally and which investments are better suited for your IRA.

The answers to these questions might surprise you. You’ll not only hear the perspective of self-directed IRA company president Kaaren Hall, but from professional investor David Campbell who has been using self-directed IRAs as a core part of his investing strategy since 2005.

This webinar is appropriate for both new and well seasoned investors.    You can experience the video recording of this webinar by visiting

Filling Vacancy is Key to Real Estate Profits

Filling vacant property in a timely manner is imperative to your success as a real estate investor.

The value of a commercial property is directly related to the value of the tenant leasing that property.  Most common cashflow problems result when a property falls vacant and the manager / owner is ineffectual at filling the vacancy.   Once you become skilled at filling vacant properties, you can direct that skill at filling other people’s vacant properties for profit.  There are a lot of commercial property owners and prospective investors who would gladly give you a piece of their equity in exchange for filling vacant properties with highly qualified tenants.

Here is my personal checklist to filling vacant property for profit:

  1. Identify your prospective tenant profile.
  2. Make the property physically rent ready
  3. Choose a competitive rent and security deposit structure (sometimes a tenant will choose your property over your competition because your deposit is more within his reach.
  4. Create professional-looking marketing materials which feature  ample photographs.
  5. Expose your marketing materials to the places prospective tenants are looking.
  6. Provide good customer service when prospective tenants call.
  7. Maintain a list of prospective tenant phone calls and call back prospects until they tell you they have leased another property.
  8. Implement reasonable selection criteria when tenants apply to rent.
  9. If prospective tenants are not calling you, go call them! Ask the neighbors for referrals.  If filling a commercial property, flip through the phone book or local trade associations and cold call for tenants (or have your leasing broker do this).
  10. If your vacancy is in a commercial property, consider starting or purchasing a business to become your tenant.  Often times purchasing a franchise and hiring a competent manager is cheaper than letting your commercial property sit vacant.
  11. If market rents have dropped below what is sustainable for your personal cashflow, invite your tenant to co-own the property with you in exchange for a premium rent structure; or take on an investment partner who supplements the negative cashflow in exchange for owning a piece of your equity.

david campbell property investorIf you are doing ALL of the above steps, your property should not stay vacant very long.  The exception to this is if the marketplace does not have enough demand drivers to fill the vacancy.  In that case, consider a change of use for the property.

Sometimes taking a property through a change of use is highly profitable; other times it is just a way to mitigate your loss on an investment burned by an unexpectedly changing local economy.  If there is no demand for housing in your area, perhaps your vacant residential property is better suited as a daycare facility, dentist office, drug rehab center, assisted living, etc.   If there is no demand for your vacant retail property, perhaps the property could be converted to vehicle storage, industrial distribution, refrigerated storage, data warehousing, or consider scraping the building and returning it to a previous agriculture use.

If your property is hopelessly vacant and there is no chance for profitable re-use, use this information to gain leverage with your lender.   If they see the situation the same way as you do, you might be able to negotiate a lower payment or principal reduction on your loan balance.

To your success,

David Campbell – Founder of Hassle-free Cashflow Investing
Real Estate Investor / Developer / Author
Office: (866) 931-9149 Ext. 1

Skype: HassleFreeInvesting

REMEMBER: Filling vacant property is an opportunity for profit.

Try on this recipe for financial success DFW style

Sales of existing DFW (Dallas – Fort Worth, Texas) single-family homes in August were up 24% from a year ago (aug 2010 to aug 2011), according to the most recent MLS data compiled by the Real Estate Center at Texas A&M University.  Sales in DFW (Dallas County) are up 31%.  Year over year median price is unchanged.

Increase in sales velocity is a leading indicator. Increase in prices is a trailing indicator.  (NOTE: we are seeing a leading indicator of potential price increases). 

The population of the Dallas – Fort Worth ( DFW ) metro is booming.

People are buying houses.    People are consuming houses faster than builders are adding houses.  Restricted land resources near job centers (yes there is lots of land, but not near where the jobs are),  tight construction financing, and stringent home buyer lending requirements are causing a major constriction in construction (say that 10 times fast!).

What happens when demand increases faster than supply?  Economics 101 = prices go up assuming there is capacity to pay more.

Homes are still very affordable in DFW with about 25% of household income being used for housing.

40% is about the maximum healthy allocation for housing.  This means residents of Dallas have an additional 15% of their income to use towards discretionary housing expenses.   This discretionary income allowance makes it possible for housing prices to go up.   Historically low interest rates are making housing even more affordable.   The majority of non-homeowners cannot get a mortgage because of tighter lending standards and credit challenges.   If lender underwriting gets looser or credit begins to heal with time, more home owners will qualify thus causing an increase in demand.

In the interim, high population growth combined with housing supply restrictions combined with strict lending guidelines is a recipe for RENT INCREASES.

Buy a new construction house in DFW and rent it out for positive cashflow.

1) If home buyer demand increases because of looser lending, PRICES will go up and you’ll make a capital gain profit.

2)  If home buyer demand decreases because of continued tight lending practices, RENTS will go up as the population increase puts further demand on the already limited supply of rental housing.

You win either way.

The team at Hassle-free Cashflow Investing would be happy to help you acquire a portfolio of positive cash flow single family homes in the the strongest rental market in the country – Dallas – Fort Worth, Texas.

Send an email to to learn more about how cash flowing houses in DFW could fit into your personal investment strategy.

Part of our series of articles on investing in Dallas

David Campbell Named Value Hound of the Month

Below is a summary of David Campbell’s Interview with Craig Haskell of the Value Hound Academy.

You can listen to the Full Audio Interview HERE

How a High School Band Teacher Became a Successful Real Estate Investor by Turning Distress into Profits as a Creative Deal Maker

While a high school band director in Southern California, David bought his first investment property – a two bedroom condo. As the market value went up, he sold the condo and took the equity to buy more properties. Success really took off when David bought a 30-unit apartment building and converted the units to condos where he sold them for a sizeable profit.

Since his days as a school teacher, David has been a principal or key adviser to over $800 million of real estate transactions. Because of David’s success, he has been in high demand as frequent guest speaker at numerous events, radios shows, and leading universities.

Believing that properties do not have problems, people do, David takes a people first approach toward finding creative solutions to properties. David’s unique gift is finding creative solutions to getting deals done, and in this interview, he shares some exclusive samples of his most creative deals.

Value Hound – You came from very humble beginnings as a high school band teacher. Today, you’ve built a sizeable international real estate investment company. Tell us how you got started and built your company.

Campbell – I started out teaching high school band, and my salary was less than $30,000 a year. Living in southern California, I figured out really quickly that was not going to be enough money to raise a family on, so I started looking for something else in the marketplace, and how could I make some ancillary income. Fortunately, in college, I worked at a mortgage brokerage office and a tax office, and I had a good financial background.

I went out, and the first thing I did was I bought a two bedroom, two bath condo, and I lived in one half, and I rented out the other half. Lo and behold, the first year, equity happened to me, and the property went up more than what my salary was. At the end of the first year, I said, “Look, I’ve got no money in my checking account, but suddenly I have a $30,000 net worth because of real estate that would not have been there any other way.” And that got me the bug.

I took that first concept and learned how to equity optimize and I pulled the equity out of that property, and I bought another house, and that property did well for me. And I bought four more houses, and those did well. So I doubled down and got eight more houses, and then got into an apartment building, and then I really got the bug for real estate development.

I started a home-building company and a commercial renovation company. We buy distressed shopping centers and fix their problems. I got the bug to go international. I looked at the Caribbean and Mexico and Canada, and some pretty viable places to invest, and it was just something that grew organically from a humble start with no capital, and really relying on my creativity and ingenuity, and relationships to really kind of bootstrap my way into a pretty healthy real estate company.

Value Hound – Were there one or two big things that really propelled your success?

I would say the first thing is just looking to give first, and realizing that the pie is big enough to share, and if you always lead with the question, “How can I add value to you?” or “How do I add value to the marketplace?”

In boom times, dumb people can make money just because the market’s going crazy. But in lean times, like we’re in now, many times you’ve got to be really smart, and you have to have some loyal people around you.

The most important thing in my business is to have integrity with the people who are on your team, add value to them first, and if they return value to you, then they’re a keeper. You know, they’re part of your team for life, and if you add value to them, and they just take and don’t return value, then you just say, you paid a little bit to learn that you just need to move on and find some new relationships.

The second thing is really just keep your eyes open for opportunity, and be, in many cases, have a good filter. I like to say that if you’re crystal clear on what you’re looking for, then the strategies and the tactics to achieve that objective are going to make themselves apparent to you. And it’s a great opportunity to just look for ways to find value, and the universe just gives back to you.

Value Hound – As you’re out looking for opportunistic and value-add deals in the distressed marketplace, what types of deals are you looking for?

Because my primary business is home-building, I am looking for sellers of land that are going to give me great terms because I’m a huge believer of the concept that terms are more important than price, and I’ve heard the story told many, many times: you name the price, and I’ll name the terms.

What I’m seeing in the marketplace is a lot of landowners, where they’re stuck on price, and my thing is terms, so I’ll say, “I’ll give you your price on your dirt, but what I want you to do is, number one, subordinate your equity to my construction loan; number two, give me a long take-down schedule on your lots.

If you’ve got 100 lots, instead of me buying 100 of them and paying interest and taxes and mowing and all of that while I am unable to use them,” go to the seller and say, “I’d like you to give me 3 lots a month, or maybe 2 lots a month for the next however many months it takes.”

The other thing I’m looking for is opportunities to trade equity. You know, find someone that has a property with equity in it, and trade it for a different property type that makes sense for you and solves their problem, or finding ways to solve a seller’s challenge by creativity.

I recently acquired a large commercial property in Dallas. It’s a former retail center and we’re working on changing use from retail into vehicle storage and a vehicle service center. That’s a very recession-friendly type of business. Everybody’s still driving, so they need a place to get their vehicles worked on, and I realize that retail is never coming back in this location, but a change of use was a great way for me to get income from the property that the seller hadn’t thought of. So I was able to buy property at an extremely great price and change the use of it and make a profit.

People  are afraid of big boxes now because they don’t know what to do with them, and if you can get the building cheap enough, then it really opens it up to so many different uses.

Let’s say in a retail space, you might have spent $100 or $120 a square foot to buy it as a retail center, but the retail is dead and gone. The building is vacant and maybe if you can buy it for $10 or $20 a foot, which is way, way, way below replacement cost. Now, when your basis is $20 a foot, there are all kinds of uses that make sense there that didn’t make sense before, when it was $100 a foot.

Value Hound – I look around this country, and I see all of these vacant, boarded-up, former auto dealerships that are just sitting empty; there’s got to be some great uses for those empty buildings. Have you ever looked into that?

Campbell – Yes, and in fact, I’m actually partly contributing to that problem. I’m recently trying to aggregate a bunch of small auto dealerships into a single location because a lot of dealers have gotten smaller; they need less floor space, and they want to finally trim their overhead, and so by creating an auto center of multiple dealers. Maybe you can get 7 or 8 or 10 used car dealers into that same space, and then have shared overhead for office and financing and your title processing and things like that. So that could be one potential use.

The other is, when you’ve got lots and lots of land, you could either just look at doing a demo project and starting over. I’m working on a project now where it’s something similar to an auto dealership with good freeway frontage, and we’re working on making it into a truck stop. Where the former sales room was, you can put your showers and restaurants and things like that, and then all of the places where the cars used to park is a great place for the trucks to go.

The current distressed real estate market has created many vacant office buildings, vacant big box retail space, unsalable land, empty car lots, empty warehouse space, and much more. How can an investor creatively solve the empty space problem?

I’ve had great success starting with the property I owned or wanted to acquire, and setting up a meeting with either planning department, city council, city manager, head of economic development, or chamber of commerce. You say, “I’m the owner of the property at Main and Main and I’m having trouble with my property. What would you recommend? What would you like to see me do with the property? If you owned this property, what would you do with it?”

It’s amazing the uses that come out. Because oftentimes, a city will have a tenant that approaches them and says, “Hey, I’m a manufacturing person, and I’m looking for….”

I’m working on a deal right now where I’ve brought my property to the city, and I wanted a particular use, and the city said, “Well, that’s interesting, but we’re right now courting an industrial – manufacturing tenant that would really like to have a site similar to yours. Let’s make an introduction.” And that’s great.

I never would have had that connection or thought to convert – in this case, it was a retail property into an industrial property. But with the city’s introduction that was a good indication to me that I would get my change of use permit. Maybe – in this case, I did not need a zoning change, but perhaps, if I did, having the city initiate the project is sure helpful because then you can say, “Hey this was your idea to start with. Give me some support.”

Value Hound – Any other examples you can tell us about?

Campbell – I worked on an interesting project where it’s some city-owned land, and I really didn’t know who owned this land. I just thought it was a really great parcel, and I looked it up in the tax records, and lo and behold, it was owned by the city.

Knowing the city’s mission statement, I was able to get a good feeling for what things they’re proud of. I then went to that city and said, “What would you like to do with this land?” They said, “We have no idea.” And I said, “Well, you know, reading the mission statement of the city, I think this could be a good use.”

I proposed something that was ecological and green and helpful to the community. That’s a project in process, but that’s a great way to get into a project. In this case, I am asking the city to give me great terms on their land; maybe give me some special financing – some bond financing – and you never know what you can get if you’re putting your brain, your team and your intellectual resources behind something.

One of my mentors very early on said, “Never let the lack of capital stop you because if your deal is good enough, your idea is good enough, your team is good enough, the money will find you.” And that was a really freeing thought.

In this particular case, the gentleman said, “David, if you can’t fund your deal yourself, and it’s good, you come to me, and I’ll fund it.” And that was liberating. It was so liberating for me that I just stopped worrying about the money, and I just started worrying about – does it make economic sense? And if it does, someone will write the check.

Value Hound – You’ve been quoted as saying, “Properties do not have problems; people do.” Can you explain your philosophy and tell us how investors can capitalize on that?

Campbell – It goes back to understanding that the way to create value is solving problems, and every property is an opportunity. Sometimes it’s an opportunity for the buyer; sometimes it’s an opportunity for the seller. Really, if you ask great questions and you listen, sometimes you’ll find a way to create unique deal structures.

For example, every time someone is offering a property for sale, 100% of the time, that person has a need. Sometimes the need is to sell the property, and sometimes it’s not. Sometimes, what they’re really trying to solve is a need for cash. Sometimes they’re trying to just solve a management hassle. Sometimes it’s an inheritance issue, where they inherited a property, and they just don’t have the resources or inclination to continue managing it. Sometimes, their debt has expired and they have a balloon payment due, and can’t make it.

Value Hound – What other types of creative deal structures are you working on today?

Campbell – I’m putting a deal together where I’m trading a portfolio of notes that I created in exchange for a down payment on a medical office building. It’s a situation where the seller really would like all cash, but there are no buyers in the marketplace for his property using all cash, so I can come to the table with a 75% bank loan, and 25% cash down payment with the requirement that he then use his cash down payment, after close, to purchase my notes.

So basically, we can do a double escrow: I can sell him my note portfolio; he can sell me his property. In a sense, it’s an exchange, where we’re exchanging equity for equity, and it’s a way for me to get out of a note without discounting it. Most people would say, “Hey, you’ve got a note, and you want to get the cash? Well, go sell your note at a discount, and get your cash, and then go to the seller and give them your cash.”

Value Hound – What big mistakes are investors making when they’re trying to put together and structure deals?

Campbell – I think the first thing is not understanding the life cycle of cash, and saying, “Well, I’m going to put my cash into a deal,” without thinking about when they’re going to get that money back and how they’re going to get it back. I’m a huge believer in knowing when and how you’re going to sell the property before you buy it, or making the assumption that you’re going to buy it forever – you’re leaving it to your heirs.

So Rule No. 1: have an exit strategy before you buy. And the exit strategy isn’t, oftentimes, for the property; it could just be for your equity. That’s what I like to teach – you buy the property, get your equity back out, and keep the property. I really am a big believer of that, so if people are having a different strategy on real estate investing, I’m always curious to look at what their cash and cash return is when they leave their money in long-term.

You say, “Well, it’s nice if you’ve got a bunch of free and clear property, but what is your cash on cash return compared to, say – let’s say we pulled out 50% of that equity – conservatively – and we doubled the size of your portfolio. Then what would happen to your cash on cash return.

The second thing that is a huge mistake investors are making is not having a support team around them. I see people – oftentimes, they try to go it alone in a marketplace, or they assume that a group of professionals is too busy to take their phone call, and they just kind of muck it on their own. Or they try to just go around people and be secretive with their team.

It’s very much like going to your doctor and just saying, “I’d like some penicillin.” And the doctor says, “What’s wrong with you?” And they say, “I just want some penicillin. Give me some penicillin. It’s none of your business why I want penicillin. Just give it to me.”

I see investors make that kind of mistake in the marketplace, where they’re afraid to open up about what their personal investment philosophy is; what they’re really trying to buy. People don’t like to be sold, but people love to buy. I really encourage people to get a team around them, and then to say, “My personal investment philosophy is,” and then they can be very articulate about what it is.

There’s an infinite number of properties in the world, universally, and there’s no way you could look at all of them. You have to have search criteria, so when you go on the MLS and there’s six million properties in America for sale, how do you narrow that down to the one you’re going to buy? It’s simply by having good filters and making sure that your filters are consistent with your long-term vision.

Thirdly, I think, is insufficient cash reserves. Oftentimes, someone has $30,000, and they say, “All I need to buy this property is 30 grand,” and they put it all in. Then, the first cash call comes because they’re vacant or there’s a repair, and then they lose control over the property. I would much rather have – if I could choose between putting 20% down and having no money in the bank, or putting 5% down, and having 15% in the bank, I would much rather have the higher leverage and the greater cash reserves.


David Campbell would like to thank Craig Haskell of the Value Hound Academy for facilitating this interview.

Relocate America ranks Dallas, TX as the #5 Best City to Live in America

While you know I am a fan of Dallas, TX as a great market to own rental property in, it is also a highly desirable place to LIVE.

Each year researches, identifies and shares the best places to live in America. For 2011, the team found the best communities that are well positioned for economic recovery, already experiencing strong economic recovery or have proven overall economic stability. Factors such as employment, education, community leadership and overall quality of life are strongly considered and all the data is examined to determine the Top 100.

In 2011 Dallas was ranked the #5 Best Place to Live in America (Austin, Texas was #1)

Dallas Real Estate Investor Field Trip 2011

The following is a reprint of the article posted at:

Dallas, a richly diverse city, offers a thriving culinary scene, a leading arts district, countless luxury accommodations, professional sports, trendy entertainment districts and endless shopping opportunities. As the Southwest’s leading business and financial center, we boast the largest wholesale market in the world, and lay claim to being one of the top convention cities in the United States.

Despite economic downturns in other cities across the country, the City of Dallas continues to experience sustained economic development and growth, especially in our expanded downtown neighborhoods and Southern Dallas business parks. Dallas is renowned for its commercial drive and cosmopolitan flair. With its concentration of high-tech companies, corporate headquarters and wholesale trade markets, it’s a metropolis devoted to business. Dallas also claims one of the largest urban arts districts in the U.S. and is a magnet for top scientists and doctors, including three Nobel laureates.

We have focused on the development of downtown Dallas over the past few years, to reach our goal of making downtown a 24-hour neighborhood. Downtown Dallas is glitzy, with several arts and entertainment districts nestled amid its futuristic corporate skyline. In 1999, about 500 people were living in the central business district. Today more than 3,700 call downtown home. Dallas is a leader in transit-oriented development, which provides new housing, adds sustainable density to accommodate the continued projected growth, provides new retail, employment and entertainment anchors for many of Dallas’s single-family neighborhoods, it improves mobility and energy efficiency. And Dallas boasts a moderate cost of living, well below major East and West Coast cities.

Dallas is a richly diverse American city, home to people with many cultures, religions and lifestyles. This important convergence of uniqueness and differences is reflected throughout the sights and sounds of the city. Dallas’s authentic arts, music, food, places of worship, historic landmarks and urban lifestyle all contribute to the city’s makeup. Historic buildings also contribute. Built in 1921, the Majestic Theater is wonderfully restored with all of its charm and features sight-line seats, and state-of-the-art stage, sound and lighting equipment. Programs include musicals from the Broadway Contemporary Series, and the Dallas Black Dance Theatre.

The City of Dallas has been “going green” for many years, even before the green movement was in fashion. In fact, our Office of Environmental Quality racked up so many green initiatives and accomplishments over the past two decades that the Regional Director of the U.S. Environmental Protection Agency called Dallas “a leader among cities,” standing ready to be a model for the rest of the nation. Out of all U.S. cities, Dallas is the Number 1 purchaser of clean, renewable power; Dallas boasts the largest alternative-fueled fleet in Texas and one of the largest in the nation; Dallas has been chosen as the first and only pilot city for the EPA’s Sustainable Skylines Program aimed at improving air quality.

The Dallas Park and Recreation department maintains more than 400 parks, including 17 lakes, more than 17,000 acres of greenbelt/park land, and more than 61 miles of jogging and bike trails throughout the City. We are reinvesting in neighborhood and community parks, developing two new major athletic complexes and adding 15 miles to our city-wide trail system. Through a public-private partnership, we are building a 5.2-acre park on a deck over Woodall Rodgers Freeway, designed by renowned landscape architect James Burnett.

Currently the freeway and overpasses prevent movement between our growing Arts District and our Uptown area, whose explosion of residential and retail growth has made it the hippest place to shop, eat and live in Dallas. When the park is complete it will include a children’s garden and playground, a dog park, cafe and outdoor terrace, acoustical performance stage, plazas and water features, shady groves and lawn space and wireless Internet access. It will finally connect the Central Business District and Uptown, and promote walkability and livability between two of the city’s most vibrant entertainment and cultural districts. We are also embarking on a significant restoration and enhancement of Fair Park, a National Historic Landmark with the largest collection of Art-Deco buildings in the nation, and transforming the river into our city’s front door, a spectacular showcase of nature, recreation and innovation with a signature bridge designed by Santiago Calatrava.

Of course, we take our sports seriously in Dallas. Whether it’s professional basketball, college football or a raging rodeo, on any given day you can find a spectator event that suits your particular appetite. The Dallas Cowboys play football in the largest domed stadium in the world, with the world’s largest column-free interior and the largest high definition video screen which hangs from 20 yard line to 20 yard line. The Texas Rangers play major league baseball in The Ballpark in Arlington, about 15 miles to the west. NASCAR racing can be seen at the Texas Motor Speedway north of Forth Worth. Two professional golf tournaments are held in the Dallas-Fort Worth area every May.

The City of Dallas is focused on doing everything possible to create and maintain a vibrant and growing economy. Business opportunities. Quality, affordable housing. Higher Education. Arts and entertainment. Friendly neighbors. Dallas a city that models its slogan, “Live large. Think big.” Its pioneering spirit is alive and well, and the contributions of its residents continue to enrich the community and quality of life. More than 500 people move to the greater Dallas area each day from every part of the nation and the world for reasons as varied as they are. But the fact is that Dallas is big enough for all of them.

Part of our series of articles on investing in Dallas

Consumer Spending in U.S. Unexpectedly Stagnated in May as Prices Climbed

(The following is a reprint of an article from Bloomberg on consumer spending and inflation with  commentary from professional investor David Campbell inserted in (italic parenthesis) as a way of interpreting this article within the context of Hassle-free Cashflow Investing. Your blog comments are also greatly appreciated.)

consumer spending 

By Alex Kowalski – Jun 27, 2011

Consumer spending unexpectedly stagnated in May as employment prospects dimmed and rising inflation caused Americans to cut back.

(It is important to note that the title and general theme of this article is that consumer spending stagnated not declined.  This means that even though prices have gone up, it has not had an impact on the amount Americans are spending. Inflation is the effect of rising prices resulting from increased supply of currency and increased velocity of currency.  If the supply of currency has increased but the velocity – consumer spending – has stayed the same the result is inflation.   Some experts are hoping that inflation can be kept in check by a reduction of consumer spending – reduced velocity. A decline in consumer spending would  retard inflation in the short term, however while the supply of money can expand to infinity consumer spending can only retract so much. Eventually, the pent up demand for goods – consumer spending – will result in increased velocity which will compound the effects of inflation. )

Purchases were little changed, the weakest outcome since June 2010, after a revised 0.3 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News called for a 0.1 percent gain. Prices excluding food and energy rose more than forecast.

(As prices increases occur, the government must increase the supply of money to pay its own bills which creates a parabolic rate of inflationary price increases.  Very few economists have the hutzpa to publish forecasts showing inflation increasing at parabolic rates.  Most people see 0.3% gain per month and they think “no big deal”.  This is because most people are bad at math.  Using 0.3% per month COMPOUNDING rate of inflation an item costing one dollar today will cost $16.91 in 78.7 years – which is the average life expectancy in the US.  This rate of growth equates to 21.5% simple / non-compounding growth rate.  If Americans knew 0.3% monthly compounding inflation was really a 21.5% hidden TAX on their life, there would be rioting in the streets. In order to make money as an investor, you need to own inflation friendly assets.  Nominal gains from dollar denominated asset classes are almost always entirely eroded by inflation.  To beat inflation, you MUST own leveraged, income producing real estate. There is no other asset class whose equity and income will track with inflation).

Walgreen Co. (WAG) is among retailers that indicated 9.1 percent unemployment and higher gas and grocery bills have prompted shoppers to pare back purchases of less essential goods. Federal Reserve policy makers said the restraint on purchasing power may prove temporary as commodities prices start to decline, allowing the economy to pick up later this year.

(How can the Federal Reserve predict declining commodity prices? The Fed controls the money supply which is one half of the equation in pricing. Remembers inflation is supply x velocity.   The Fed controls supply but they don’t control velocity. If the Fed says commodity prices will decline, is the Fed saying they will remove money from circulation?  If the Fed removes money from circulation, wouldn’t that radically impair the economy? The government is in a catch 22 of having to continually expand the money supply or stop printing money which would result in a 3-10 year economic depression – which would be political suicide.  If the Fed believes purchasing power – velocity – will increase, that is an inflationary pressure in itself.)

“The quarter is going to be very slow,” said Christopher Low, the chief economist at FTN Financial in New York who correctly forecast household spending. “The biggest explanation for that is gas prices, so obviously the fact that oil has fallen quite a bit in the last couple of weeks is a really good thing. Relief just in time.”

Stocks rose as banks gained on new rules to safeguard the global financial system and technology shares rallied. The Standard & Poor’s 500 Index rose 0.9 percent to 1,280.1 at the 4 p.m. close in New York. Treasury securities fell, pushing the yield on the benchmark 10-year note up to 2.92 percent from 2.86 percent late on June 24.

(When treasuries or treasury bonds ‘fall’ it means the purchase price of the bond is discounted which pushes the yield up.  Investors demand a higher yield when they fear inflation will erode too much of their profits.  If the inflation rate is 0.3% per month compounding, that is 3.66% per year.  If the yield on treasuries is 2.92% and inflation is 3.66%, the effective yield on treasuries is NEGATIVE 0.74%.   You can make money TRADING treasuries and you can hold them as a LIQUIDITY alternative to cash, but only the financially illiterate actually purchase treasuries as INVESTMENTS.)

Survey Results

Estimates from 70 economists surveyed by Bloomberg ranged from declines of 0.3 percent to gains of 0.3 percent after a previously reported 0.4 percent gain the prior month.

The report showed incomes increased 0.3 percent for a second month. The gain was also less than forecast.

Wages and salaries increased 0.2 percent in May after climbing 0.4 percent a month earlier. Disposable incomes, or the money left over after taxes, were up 0.6 percent from a year earlier after adjusting for inflation, the smallest 12-month gain since May 2010.

Because incomes rose as spending stagnated, the savings rate rose to 5 percent from 4.9 percent in April.

Today’s report also showed inflation picked up from a year ago. The gauge tied to consumer spending patterns increased 2.5 percent from May 2010, following a 2.2 percent gain in the 12 months ended in April.

(As one would expect, it appears that wages are keeping pace with the cost of living.  Wages shouldn’t be going up during a very tough labor market, however because of the radical increase in the supply of currency the inflationary trend has found its way into wages as well.  As wages go up with inflation and the price of real estate stays the same it makes real estate relatively cheaper.   A one dollar an hour increase in wages results in an additional $12,500 of mortgage buying power for the typical consumer.   The article points out that the saving rate is increasing, which means there is a lot of cash sitting outside of circulation in our economy.  Increase savings rates slows inflation because it slows the velocity of money.   Pent up consumer demand for housing combined with increased borrowing power and savings rates means there is the potential for another real estate boom. One of the major obstacles preventing a real estate boom is widespread poor consumer credit is preventing financially qualified borrowers from getting loans.  If you hear about easing credit standards for real estate mortgages, you’ll know the next real estate boom is about to take off.  Smart investors will acquire a portfolio before that happens and then enjoy the price escalation which will result from the above factors.)


More Inflation

The Fed’s preferred price measure, the so-called core inflation reading that excludes food and fuel, rose 1.2 percent in May from a year earlier, compared with the 1.1 percent advance in April. It rose 0.3 percent in May from the prior month, the biggest one-month gain since October 2009.

Today’s report also showed that spending adjusted for inflation figures, which are used to calculate gross domestic product, dropped 0.1 percent for a second month. It was the first back-to-back decline in two years.

Economic growth slowed in the first quarter after surging energy costs strained consumer finances. Labor markets have begun to worsen this quarter, with payrolls growing by 54,000 workers in May, the fewest in eight months. Unemployment rose to 9.1 percent, the highest this year, the Labor Department showed June 3.

“Persistent high unemployment, a weak housing market, high fuel prices and inflation all put pressure on consumers,” Greg Wasson, president and chief executive officer of Walgreen, said on a June 21 earnings call. In response to the economic outlook, customers of the largest U.S. drugstore chain are shifting more spending to essential goods, he said.

Raising Prices

The Deerfield, Illinois-based company has been raising prices to combat more expensive input costs, including fuel, Chief Financial Officer Wade Miquelon said during the call.

In May, cars and light trucks sold at an 11.8 million annual rate, the slowest since September and down from a 13.1 million pace a month earlier, according to researcher Autodata Corp. Some of the drop in demand last month reflected a shortage of Japanese-made vehicles after the earthquake and tsunami in March disrupted supplies. With inventories running low, companies offered smaller discounts, deterring buyers.

Fed officials decided last week to keep the central bank’s balance sheet at a record to spur the slowing recovery after they complete a $600 billion bond purchase program by the end of this month.

“The economic recovery appears to be proceeding at a moderate pace, though somewhat more slowly than the committee had expected,” Fed Chairman Ben S. Bernanke said at a press conference after a meeting of the Federal Open Market Committee on June 22. He said the slowdown is caused in part by “factors that are likely to be temporary,” including more expensive commodities as well as supply chain disruptions associated with Japan’s natural disaster.

(The actions of the Federal Reserve and the US Government encourage American’s to cut back spending which is a slowing of velocity.  When consumer spending (velocity) slows, the government has the ability to increase money supply – thus increasing government spending – without resulting in price increases.  Increased money supply and reduced velocity benefits the government because they have the opportunity to spend new money first when it has the most purchasing power.)

Gasoline prices have fallen about 11 percent through June 26 after reaching an almost three-year high of $3.99 on May 4, according to data from AAA, the nation’s largest auto group.


®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED. Here is a link to the original article as printed by Bloomberg: ” Consumer Spending in U.S. Unexpectedly Stagnated in May as Prices Climbed “

Managing your expectations is a prerequisite to getting paid

The following article on managing expectations was written by professional investor David Campbell for a publication distributed to professional real estate agents (Realtors).

Real estate is a people business.  Unfortunately, the people responsible for paying our livelihood don’t usually understand real estate.  Often times, concepts which are incredibly obvious to real estate professionals are completely oblivious to our clients.  Your livelihood depends on your clients having a positive experience and giving you their referrals.  I am sure you have seen agents do a terrific job managing the technical aspects of a transaction only to have an unhappy client at the closing table.   The reason was there was something that the client expected that he didn’t get.  Sometimes we can listen to the client’s expectations and find a way to deliver the thing they are asking for.   Other times it is more appropriate for us to help our clients recalibrate their expectations.

In my real estate business, I work exclusively with real estate investors. Some of my clients own multi-million dollar portfolios while others are in the process of buying their first rental property. One of my novice investor clients recently sent an email to their professional property manager regarding the lease renewal on one of their rental properties.  They copied me on the following email: “The current rent of $1,300 per month is very close to our breakeven point, so we can not go any lower.  More rent would be nice, but not at this time.”

Upon receipt of the email, I contacted my client with the following advice:

“Always price your rent at market rate regardless of what your personal expenses are.  A professional property manager will help you establish the appropriate rental rate.  If the market rent has gone from $1300 to $1,400 OF COURSE YOU SHOULD CHARGE $1,400 RATHER THAN $1,300.  If the market rent has declined to $1,200 and you keep your asking rent at $1,300 because that is what your expenses are, your property will sit vacant and you will feel stress.  Always price your rent at market price. Take your profits when the market lets you. Suck up your losses when the market forces you to.  Market price is set by the economy not by your financial need.  Your tenant will never care how big your mortgage payment is.”

A client who prices their property with the guidance of a professional will have set their expectations for success.   A client who sets their own price for a property based on personal need will eventually feel the stress of the marketplace rejecting their property at that price.  Inevitably the property owner will blame their realtor for not meeting expectations, when the problem was the client’s expectation was wrong from the outset.

Here is another maxim to run your business by:   “If you aren’t going to get paid for your work, you might as well stop working right away.” If your client has set themselves up for failure by focusing on their personal need while simultaneously ignoring the needs of the marketplace, you should counsel your client to establish more appropriate expectations, or fire your client and move onto the next deal.

To your success!

David Campbell
Professional Real Estate Investor, Developer, and Broker
(866) 931-9149 Ext. 1


PS.  I look forward to helping you set and achieve reasonable expectations for your investment real estate objectives.

How To Trade 18 Chicken Eggs For All of the Houses in Orlando, Florida

How To Trade 18 Chicken Eggs For All of the Houses in Orlando, Florida 


As I’ve discussed before in my free eBook Secrets of Hassle-Free Cashflow Investing, there are (at least) five ways to make money with investment real estate:

1) Cash throw off – the amount of rental income left over after you pay all of the expenses and the mortgage on the property

2) Income tax savings – the amount of money you would have paid in income taxes if you did not enjoy phantom losses from real estate deprecation

3) Amortization – the portion of your mortgage paid by your tenant that makes your loan balance smaller

4) Appreciation – the increase in the ratio between the intrinsic value of real estate and its value compared to other objects with intrinsic value (value increase)

5) Inflation – the increase in the ratio between the intrinsic value of real estate and its value as denominated in a currency (price increase)

Many people lump appreciation and inflation and into the same basket, but to an investor these phenomena are very different.

It is possible for an item to appreciate and go DOWN in price. For example, if you bought a house for five Toyota trucks and sold it for six Toyota trucks, you have experienced appreciation because your house was sold for more trucks than it was purchased for. However, if the price of Toyotas has gone down, you may have experienced a monetary loss. If you bought a house for five Toyota trucks and sold it for four Toyota trucks, your house declined in value. But, if the price of a Toyota truck went from $25,000 to $40,000, you would have purchased a house for $125,000 and sold it for $160,000. Home appreciation is nice but it doesn’t necessarily mean we will have made a profit. As an investor who borrows money to purchase houses, I need my assets to INFLATE in price regardless of whether they APPRECIATE.

inflation chart

I have been investing in real estate since 2000 and because of my hard work, tenacity, and skill I am now a multi-TRILLIONAIRE. As a reminder of this insane wealth, I carry a fifty-trillion dollar bill in my wallet. OK, so it’s really 50 trillion Zimbabwe dollars which is not enough to buy a can of Coke (Z$50,000,000,000,000 = $0.40 USD), but it is still fun to say “I am a trillionaire”.  Carrying this bill around in my wallet is a great reminder to me of how wealth is transferred through inflation.

Let me reiterate; inflation does not create wealth, it merely transfers wealth from lenders to borrowers.

Let’s examine Zimbabwe’s case of extreme inflationary wealth transfer in a whimsical real estate analogy. If you were smart enough and able to borrow Z$600 billion (Zimbabwe dollars) in 1980, the proceeds of the loan would have allowed you to purchase every single home in the city of Orlando, Florida (population 128,000). Twenty-eight years of inflation later, in 2008, you could have repaid the entire Z$600 billion debt with eighteen chicken eggs. Z$100 Billion for three eggs = inflationImagine how much real wealth was transferred through the inflationary actions of Zimbabwe’s central bank. While extreme, this is an example of how inflation transfers things with intrinsic value to people who purchase them with debt denominated by an inflating (fiat) currency. Every government in the history of the modern world has radically devalued (inflated) its currency over time; the US dollar is no exception.

If inflation makes borrowers winners and lenders losers, why would banks continue to lend money?

The answer is shockingly obvious. Banks don’t lend out their OWN money. Banks lend out YOUR money. Banks make a profit by lending money at a rate of interest higher than the miniscule amount of interest depositors like you have leant it to the bank for. Your savings account at a bank is an asset to you and a liability to the bank. The banks owes you your deposit back, right? That makes the bank a borrower. Banks are not adversely affected by inflation because they make the spread between the income and expense of your money. The risk of inflation is borne entirely by the depositor not the bank. In fact, banks prefer inflation because as inflation pushes up asset prices the percentage of loans that default is reduced and the size of their loans increases.

Who are the biggest borrowers in the world? Governments and banks! The rules of the currency (inflation) game are made by the same people who have the most to gain from inflation – governments and banks!  Expecting the inflation game to change is like expecting the fox in the hen house to stop eating chicken dinners.

Inflation is an ingeniously evil way for governments and banks to steal wealth from the financially illiterate.

Inflation allows governments and banks to reach into your pocket and take your money without your consent. The only way to protect your family from this virtual home invasion robbery of your currency is to be a co-conspirator in the inflation game.

Borrowing at a low rate and investing at a higher rate is called arbitrage. Arbitrage is the best wealth preservation and wealth creation tool there is. Investment real estate whose income is greater than the cost of funds borrowed to purchase the real estate is my favorite form of arbitrage (CAP Rate > Interest Rate). Leveraged real estate generates profits as the asset price (purchase price) increases with inflation and the effective cost of the debt decreases with inflation.

You cannot escape inflation unless you are investing with other people’s money the way that banks and governments do. To protect your family from inflation, you MUST be a borrower of good debt.

How can you make these concepts work for you? Ask us! Our integrated team approach to financial planning focuses on people and their unique resources.

In a sixty minute no-cost consultation, we will:

1) Help you explore your access to Cash, Cashflow, Credit, Equity, Time, Skills, Knowledge, Credibility, Strategic Relationships, and Access to Deal Flow as they relate to real estate investing and your primary job or business

2)Help you articulate your financial targets and personal investment philosophy

3) Help you determine whether you need to be in wealth accumulation mode or redeployment mode for sustainable financial independence

4) Help you customize an investment plan that is consistent with your financial objectives and personal investment philosophy

If you are struggling with an existing property, we can help as well. Our team believes that properties do not have problems, people do. We take a people-centered approach towards finding creative solutions for real estate investments and the people who own them.

If you are ready to supercharge your financial life and protect your family from the injustice of inflation, email me to schedule a no-cost, personalized investment strategy consultation.


Best Regards,

David Campbell
Real Estate Investor / Developer / Financial Mentor
Office: (866) 931-9149 Ext. 1

Twitter: InvestingMentor Facebook: CashflowInvesting




Understanding and Profiting From the Rising Price of Gas

By Financial Mentor David Campbell

The price of gas has gone up over 50% in the past twelve months.

While the mainstream media gives us conflicting opinions about whether we are experiencing inflation, common sense tells us our dollar is losing value at a rapid pace. Long time newsletter readers know I write about inflation a lot because it is the most important yet misunderstood economic concept in our society.
price of gas april 2010 to april 2011Since the dawn of government-issued currency, Federal governments have paid their bills by printing money rather than spending less than their revenues. Inflation is a popular form of taxation because most people are financially illiterate and don’t understand the shell game that is going on. Inflation gives the government virtually unlimited spending power. Virtually unlimited spending power gives the government virtually unlimited power. Once a government has virtually unlimited power, they are highly unlikely to reverse course.

The first people to receive new dollars printed by the US government are foreign governments who received dollars in exchange for service on the US debt and the US trade imbalance. The United States imports things with real intrinsic value, such as clothing and oil, and we export worthless paper backed by a good faith promise to pay from the American people. When foreign governments get a new shipment of US dollars, they have very few places to put them where they will retain value. Foreign governments know the US is sending them the ethical equivalent of counterfeit money and so foreign governments want to trade in their worthless scraps of US currency for something of intrinsic value as quickly as possible. Foreign governments cash in their fragile US Dollars primarily for two things – precious metals and oil. Precious metals have intrinsic value, but oil has much more utility. The world uses the US Dollar to denominate the price of oil. Because of the size of the oil market, its utility, and intrinsic value, oil is the natural commodity to soak up the surplus of bogus currency the US government is floating.

Technological breakthroughs such as hydraulic fracturing have increased the supply of extractable oil while the worldwide recession has reduced the demand for oil. Normally when you have reduced demand and increased supply, the price of something goes DOWN. What’s really going on is the price of gas is rising dramatically because of an excess of dollars, not an excess of demand. The rising price of gas should be a major leading indicator that the price of everything else (including wages and rents and real estate) will go up. Inflation does not affect the price of all things at the same time. Inflation has a trickle-down effect based on who gets the cash first, second, third, etc. The price of gas is leading the inflation charge because the US money supply has flooded foreign governments who get first choice of what resources they want to exchange their US dollars for and they’ve chosen oil.

What you pay for in a gallon of gasIronically, while the US government is printing money as a “hidden tax” to drive up the price of gas, the government is simultaneously lowering the tax rate on gasoline as a way of masking the impact of rising gas prices for consumers. Inflation is driving the price of international crude oil up while reduced gasoline taxes inside the US are influencing the price to go down. An important thing to remember is the reduction of gasoline taxes will have a limited impact on the price of gas while international market and inflationary forces will still be able to drive the price of gas to infinity and beyond (deference to Buzz Lightyear).

Don’t get depressed by this warning of inflation. If you are financially literate, you can use this information to take action and make a profit for your family. There is no way you could have prevented the terrible tsunami in Japan. However, if you had a year’s notice that the tsunami was coming, you would have done a great service to humanity by selling tsunami preparedness kits in the areas you knew would be affected. This is the same as inflation. Inflation is a powerfully devastating force that will wipe out tens of millions of families. Unfortunately we can’t stop it. If you know inflation is coming, you will do humanity a great service by preparing yourself and your family for it.


Here are a few ways to use the phenomenon of rising price of gas to safeguard your family from the coming inflation:

ACTION ITEM #1: Acquire rental property as close as possible to major job centers.

As the price of gas rises, people will pay a higher premium to live closer to their jobs. As the price of gas rises, your rents should follow suit.

ACTION ITEM #2: Own rental property in communities near centers of oil extraction.

The rising price of gas will stimulate economic growth in oil rich areas such as Dallas, Texas while depressing economic growth in other areas which must pay a higher cost to import their oil. As the price of gasoline rises, job creation and economic prosperity will contribute to rising rents and housing prices in oil rich areas.

ACTION ITEM #3: Own rental property in areas where job growth is fueling a massive demand of housing while increased construction costs are constraining the supply of new housing. Gasoline / oil is a major component of construction costs.

As the price of gas rises, the cost of construction will increase dramatically thus limiting the ability to add new supplies of affordable housing. Reduced supply combined with increased demand will drive up prices and rental rates of existing housing inventory. Again, Dallas, Texas is a great example.

ACTION ITEM #4: You could invest in oil related stocks or into the extraction of oil.

I am generally against owning publicly traded stocks because of the lack of control over your investment, the lack of intrinsic value associated with owning a minuscule share of a publicly traded company, and the lack of cash flow from non-dividend paying stocks. However, if you’ve already decided to have stocks in your portfolio, talk with a qualified stock investment adviser (not me) on the potential for including oil / energy stocks into your portfolio.

Best Regards,

David Campbell
Financial Mentor
Office: (866) 931-9149 Ext. 1

Skype: HassleFreeInvesting
Twitter: InvestingMentor
Facebook: CashflowInvesting

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California Dreamin’—of Jobs in Texas

Hounded by taxes and regulations, employers in the once-Golden State are moving east

APRIL 22, 2011

Wall Street Journal
By John Fund

Austin, Texas

It wasn’t your usual legislative hearing. A group of largely Republican California lawmakers and Democratic Lt. Gov. Gavin Newsom traveled here last week to hear from businesses that have left their state to set up shop in Texas.

“We came to learn why they would pick up their roots and move in order to grow their businesses,” says GOP Assemblyman Dan Logue, who organized the trip. “Why does Chief Executive magazine rate California the worst state for job and business growth and Texas the best state?”

The contrast is undeniable. Texas has added 165,000 jobs during the last three years while California has lost 1.2 million. California’s jobless rate is 12% compared to 8% in Texas.
“I don’t see this as a partisan issue,” Mr. Newsom told reporters before the group met with Texas Republican Gov. Rick Perry. The former San Francisco mayor has many philosophical disagreements with Mr. Perry, but he admitted he was “sick and tired” of hearing about the governor’s success luring businesses to Texas.

Hours after the legislators met with Mr. Perry, another business, Fujitsu Frontech, announced that it is abandoning California. “It’s the 70th business to leave this year,” says California business relocation expert Joe Vranich. “That’s an average of 4.7 per week, up from 3.9 a week last year.” The Lone Star State was the top destination, with 14 of the 70 moving there.

Andy Puzder, the CEO of Hardee’s Restaurants, was one of many witnesses to bemoan California’s hostile regulatory climate. He said it takes six months to two years to secure permits to build a new Carl’s Jr. restaurant in the Golden State, versus the six weeks it takes in Texas. California is also one of only three states that demands overtime pay after an eight-hour day, rather than after a 40-hour week. Such rules wreak havoc on flexible work schedules based on actual need. If there’s a line out the door at a Carl’s Jr. while employees are seen resting, it’s because they aren’t allowed to help: Break time is mandatory.

“You can’t build in California, you can’t manage in California and you have to pay a big tax,” Mr. Puzder told the legislators. “In Texas, it’s the opposite—which is why we’re building 300 new stores there this year.”

Other states are even snatching away parts of California’s entertainment industry. The Milken Institute, based in Santa Monica, Calif., reports that 36,000 entertainment jobs have left the state since 1997. The new film “Battle: Los Angeles,” which is set in California, was filmed in Louisiana.

“The red tape is ridiculous,” says Mark Tolley, the managing partner of B. Knightly Homes, which relocated to Austin from Long Beach in 2005. “Regulators see developers as wearing a black hat and the environmental laws have run amok.”

“I’m a pro-jobs Democrat,” Mr. Newsom told me. “My party needs to get back into the business of jobs.” Mr. Newsom says he’s developing an economic development plan to present to Gov. Jerry Brown, who he says “gets it” on the need for business-friendly policies. Mr. Newsom told me that what impressed him most about Mr. Perry and the Texas legislators was their singular focus on job creation.

California, by contrast, seems to constantly lose focus. Several Democrats who agreed to go on the Texas trip were pressured by public-employee unions to drop out—and many did. And just as Texas business leaders were testifying about how the state’s tort reforms had improved job creation, word came of California’s latest priority: On April 14, the state senate passed a bill mandating that all public school children learn the history of disabled and gay Americans.

One speaker from California shook his head in wonder: “You can have the most liberated lifestyle on the planet, but if you can’t afford to put gas in your car or a roof over your head it’s somewhat limited.”

The most dramatic reform California could make would be to change its boom-and-bust tax system so it doesn’t depend on a small number of wealthy residents who can flee the state. The idea would be to broaden the income tax base and lower the state’s high rates. It works today in seven states ranging from Colorado to Massachusetts. Of course, the Lone Star State has no state income or capital gains tax at all.

“Texas’ economy is far less volatile due to its having neither a progressive income tax system nor a large tax burden,” concludes “Rich States, Poor States,” a study by the American Legislative Exchange Council. Less volatility also allows Texas to keep expenditures in check. While it shares with California the challenge of a huge budget deficit this year, it’s expected to close it without raising taxes. Texas’s overall spending burden remains below what it was in 1987—a remarkable feat.

When Jerry Brown ran for president in 1992, he understood the distorting nature of the tax code and proposed a flat tax with deductions only for rent, mortgage interest and charitable contributions. He called it “a silver bullet” for the economy. Mr. Brown has since abandoned that idea, grousing recently to a state legislator that “the flat tax cost me the New York Democratic primary.”

But if California continues its economic decline, something Texas-sized in its ambitions may be called for— whether it’s a moratorium on new business regulations or a restructuring of the state’s dysfunctional unemployment compensation or litigation. Nothing less is likely to stem the outflow of businesses and jobs from the Golden State.

Mr. Fund is a columnist for

Successful Real Estate Investors Are Geographically Agnostic

If you have limited your investment real estate search to the properties you can drive to within a few hours of your mid-sized American city, you have limited your search to just 0.0005% of all of the potential real estate investments in the world. (0.0005% is about one drip in a hot tub).  Sadly, many people radically and artificially restrict their real estate investment search because of old fashioned thinking. People telecommute to their jobs through cell phones and the internet, and they telecommute to their social engagements through Facebook and Skype, but they are unwilling to telecommute with their investments.

As one of my mentors frequently says, “Live where you want to live and invest where the numbers make sense.”   Many of my clients have adopted this investment philosophy and they are doing well because they can get in and out of markets and properties as the numbers and local economies change.

Your investments must be Geographically Agnostic (meaning a willingness to invest in any location where the numbers make sense).

Many of you know, I live in Northern California, but I run a development company in Dallas, Texas.  I’m willing to get on a plane to go to work because my family likes living in California, but the deals and the profits live in Texas.  I have owned property in four countries and four states because I live where I want to live, but I continually invest where the numbers make sense.  If you aren’t willing to let your dollars get on a plane to chase profits, you will not be a profitable investor for very long.  Markets will continue to change, economies will change, investment strategies will change, laws will change, and your life will continue to change.

What if you select an investment market because it is near your home and then you have to move? I showed one of my clients some amazing investment opportunities in Dallas but he was unwilling to consider them because they were more than 20 minutes from his home.  The investor bought investment properties near his home even though the numbers were not very strong.  Ironically, this investor works for a company that recently closed its doors in his home town and is moving his job to Texas.  The investor gets to make the choice of moving his family to Texas or remaining unemployed near his rental property.  Willingness and ability to move for work is a huge asset in this new economy.  Willingness and ability to move your capital to pockets of opportunity, regardless of the opportunities’ geographic proximity to your home, is also a huge asset.

If you spend a lifetime investing in one market with the same strategy, you will eventually get burned.  Real estate is not a one size fits all strategy.  While real estate is generally illiquid, the owner of the property must be fluid.  You must be willing to get into and out of properties and markets as conditions evolve.  You must continually adapt your investment strategy to market conditions and your need for personal gain.  If you are limiting your potential real estate investments to where you live, your investment strategy may or may not work in your local market, or the timing might not be ideal to enter or exit, or your strategy worked in your local market five years ago but doesn’t work today.   If you are willing to expand your search criteria from just your local market (0.0005% of all real estate in the world) to include all of the United States (4% of all properties in the world), you have increased your options and probability of success by over 8,000%.  Who doesn’t want their investments to have an 8,000% increased probability of success?

I have been focused on the Dallas market for the past three years because Dallas is rapidly preparing for a housing shortage.  The Dallas-Fort Worth ( DFW) area grows by one person every 62 seconds.   Is DFW is adding a new home every 3 minutes?   The answer is NO.  Developers cannot get the financing to build houses fast enough to keep up with demand.   There is no more available land within close proximity to job centers.  The land in Texas that is available to developers is at least thirty minute from where the jobs are and the land requires massive injections of capital to develop infrastructure.  The capital for this infrastructure isn’t available.  The result is a looming housing shortage.  If you get into the Dallas market before the housing shortage is reflected in home prices, you will be a winner.  Once the housing prices rise faster than rents, I will move my focus to the next market where the rent to purchase ratios make sense.  Once home prices in Dallas increase and interest rates rise, Dallas will be in a holding pattern for investors and we will need to focus on another market for our new acquisitions.

Want to know how to take advantage of real estate opportunities in Dallas?  I promise you won’t find investment opportunities like this anywhere else.  We are real estate developers who think like investors.  We are creating new inventory specifically designed to make you money.

Send an email to to set up a free investment strategy consultation, and we will let you in on the biggest real estate investing secrets of the decade.

Best regards,

David Campbell

Real Estate Investor / Developer / Author / Founder of Hassle-free Cashflow Investing

(866) 931-9149

Find me on Skype: HassleFreeInvesting

Part of our series of articles on investing in Dallas

Invest Where The Economy Is Going – Economic Prediction and Action Steps

Successful investors need to be able to make an educated prediction about which way markets and economies are moving.

Champion hockey player Wayne Gretzky explained the secret to his success like this:  “I skate to where the puck is going, not where it is.”  The same advice applies well to real estate investing.  If you are willing to make a prediction where the economy is going and you are willing to take action on what you know, you can make a lot of money.

The economy and the real estate market have trends.   There are times to buy real estate,  times to sell, and times to just hold on.  Real estate prices move up slowly and come down quickly.   Fortunately, real estate trends are easy to spot and make a prediction on if you know what to look for.  Unfortunately, by the time most people recognize the trend, it is too late for them to get into the game.

The real estate market is trending and I am going to spell things out for you in the simplest terms I can.   Each prediction and action step could fill a ream of paper in supporting arguments, so for the sake of brevity take things at face value for the moment and in my blog we can dig into each prediction separately as time and interest permits.

Here is my best prediction and action steps to making money in real estate over the next ten years:

PREDICTION 1: Inflation will cause prices to rise substantially as the dollar devalues.  I’ve been talking about this phenomenon for the past two years, and it has finally made its way into the mainstream media as retailers are raising the cost of food, fuel, and finished goods. You can visit my blog to read my extensive writing on this subject.  I particularly recommend this series of articles on how to profit from inflation.

ACTION STEP 1: Acquire income producing real estate with as much fixed interest rate debt as possible.  Do not skim over this statement too quickly.  Having both debt AND income to service the debt are vitally important.  The income will inflate with the currency and the debt will devalue with the currency.   As an investor, you need to prepare to win from inflation by having both of these financial tools in your arsenal (fixed rate debt and rental income).

PREDICTION 2: Texas will dominate job growth and population growth in the United States.  Again, I’ve written extensively about this in my blog: Texas Dominates Market Share.  If you are acquiring income real estate as a long term investment, you simply cannot ignore Texas.  If Texas were it’s own country, it would be one of the largest in the world from the standpoint of population size, geographic size, economic power, and political clout. It would also be one of the fastest growing countries (states) in the world.

ACTION STEP 2: Acquire income producing Texas real estate near major metros within a short drive of major job centers.  There is a lot of open space in Texas however, land is just now becoming scarce in the urban centers.  The scarcity of land in the major metros is an emerging trend for you to capitalize on.  People need jobs and houses.   You should own houses near major job centers so there is a constant demand for your housing.  A major job center will have at least 1,000 employees and will create a good or service that imports revenue from as far away as possible (e.g. a business with a local and world wide customer is more economically stable than a business who only has a local customer).    To learn where the revenue importing job centers are, here is an interactive map for you to use. (Special thanks to Hassle-free Cashflow Interns Rob Kippel, Brandon Krasner, and Heather Weldon for their assistance in creating powerful tools for you to use.  If you are interested in becoming a Hassle-free Cashflow Investing intern, please send us an email.)

PREDICTION 3:  Hispanics will dominate population growth throughout the US and especially in Texas.  The Hispanic population of Texas grew by 2.8 million people over the last decade.  This accounted for 65 percent of the state’s growth over the last 10 years.  In 17 Texas counties, the Hispanic population grew by more than 100 percent. The Hispanic market is the fastest growing segment of the middle class.  Here is a great newspaper article on the subject. I predict this trend will pick up speed partly because of immigration and partly because the Hispanic birthrate is double what it is in other ethnicities.

ACTION STEP 3: Invest in real estate and businesses that would appeal to a middle class Hispanic market.  Make sure your property managers speak Spanish and advertise in Hispanic media.  Hispanic families often have more children, have multiple generations and families that occupy a single home.  Buy properties with several bedrooms, but modest square footage to be price competitive. Real estate prices go up when more people compete for a limited supply of inventory.  Own the types of property that the maximum number of people would like to live in – single family houses with 3 or 4 bedrooms and 2 bathrooms.   A master bedroom is essential.  Game rooms, lofts, and media rooms are a non-recoupable expenditure to a cashflow investor.

PREDICTION 4: Domestic military spending will contract.  As the US becomes further entrenched in foreign wars, the US will spend less money keeping troops inside its borders.

ACTION STEP 4: Do not invest in military towns.   If a military base represents more than 10% of a local economy, put your dollars somewhere else.  It isn’t worth the economic risk if the military downsizes or eliminates the military base that is the lifeblood of your town.

PREDICTION 5: Fewer people will be attending college and more people will return to manufacturing.  The US economy is globalizing and many white collar jobs are headed overseas.  As the dollar devalues, it will be more competitive for the United States to manufacture things and export them to emerging markets in Asia and South America.

ACTION STEP 5: Invest in areas of the country such as Dallas where there is a tremendous amount of manufacturing infrastructure already in place. Large manufacturing centers need transportation logistics such as heavy rail, trucking centers, highways, and cargo airports. Manufacturing centers also need a very cost effective workforce and real estate prices.  Dallas-Fort Worth is a prime market for this.


PREDICTION 6: States with a favorable business climate and a low income tax burden will enjoy the most prosperous economies.  Formerly prosperous and business unfriendly states such as California will raise taxes, lower wages, and default on government pensions to cover their economic shortfall.  In areas where big business feels constrained by taxation, labor relations, and environmental regulations, expect declines in government services, poor quality public education, and weak transportation services as a result of unparalleled shortfalls in revenue and a declining business environment.

ACTION STEP 6: Examine the financial well being of any state, county, and city in which you decide to invest.   Live where you want to live, but invest in areas where local and state governments embrace responsible business growth.

PREDICTION 7: Interest rates will rise as the US government receives foreign political pressure to stop buying its own bonds and mortgage backed securities.  The stock market will see unexplained and radical fluctuations in value as the government manipulates stock prices through covert buying and selling of public traded stocks.

ACTION STEP 7: Do not invest your IRA in the publicly traded stock market.  Cash investors can get in and out of the stock market when times are turbulent while IRA funds are often “stuck” in the market with no place to go.  Evaluate options for investing your IRA in private placement investments, businesses, notes, or the indirect ownership of real estate.  I do not recommend buying real estate directly inside your IRA, but there are great strategies for getting your IRA funds into the indirect ownership of real estate.  If you’re interested in this, send me an email and I’ll send you some great information on creative ways to invest your IRA in non-volatile IRA friendly assets. There is no one size fits all investment / financial strategy.  That’s why we want to hear from you so we can help you develop a personal investment philosophy and then take action on it.  If you’ve read this far, pick up the phone  866-931-9149 ext 1 or send me an email so you can take action on these ideas.  CLICK HERE to schedule a no cost investor strategy consultation with David Campbell or one of his team members.  We are here to help you come up with creative investing ideas and solutions to your financial goals.

While I hope everyone reading this will do business with my real estate development and investment companies, I appreciate that there is no one size fits all solution to your financial goals. The purpose of an investor strategy consultation is to help you understand what your financial goals are and find a customized solution to solving them.  I look forward to hearing from you and hopefully I will be able to introduce you to an idea, person, or opportunity that will revolutionize your financial life.

To your success!

David Campbell
Professional Investor, Developer, and Financial Mentor


Please take a moment to comment on this blog post below:  Invest Where The Economy is Going – Economic Prediction and Action Steps

Why 2011 may be the end of the housing crash

Why 2011 may be the end of the housing crash – excerpt from the Wall Street JournalStandard poors housing chart

There might finally be some good news this year about the nation’s dismal housing market. Or, at least, the bad news could stop.

Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.

Housing Is A Good Deal

Housing is the most affordable it has been in decades, according to analysts at Moody’s Analytics. They don’t just look at house prices. They also look at incomes.

Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years’ pay, although that varies nationally.

Investors Stepping Up

Here’s another sign the market is nearing a bottom: Investors have started to buy up houses and condos, in some instances paying entirely in cash. That’s a far cry from the heady bubble days when borrowed money seemed the key to riches. The bubble-era speculators who got burned tended to buy at the peak and borrowed heavily to do so. When the crash came, they quickly saw their wealth erased.

Click here to read the complete article about the end of the housing crash in the Wall Street Journal.

Return On Investment (ROI): A Different Perspective

By Rob Kippel – Hassle-free Cashflow Investing Strategist

Most people, when asked why they want to invest in real estate, fall into two camps. There are those who use real estate as a vehicle to make more money and those who use it as a vehicle to have more free time to live the lifestyle they want. Of those who are convinced they are just using real estate to make more money, many of them don’t realize they are using the increased wealth to substitute hours of work with hours of quality living. For those who only want to make as much money as possible to buy material things without regard for time, you may not gain much insight from this article. However, for those looking for more time to do the things they love, I must ask “If we are investing to ultimately have more time and our investments produce positive returns on money invested but also create more work that requires even more time, is our return on investment still positive?” To answer this question we need to quantify our return on investment in terms of time.

Time is the great equalizer (pardon the pun) of all time. While individuals may have limited control over the amount of time they spend on this earth, their time, unlike their money, will be the same as anybody else’s. Whether you are born into rags or riches, you still have sixty minutes in an hour, twenty-four hours in a day, and seven days in a week. Each individual has full discretion over how they utilize their time just as they do their money but their time, unlike their money, cannot be devalued. A minute today is worth sixty seconds just like it was back in 1913 when the Federal Reserve was created, unlike the Dollar which has been devalued by ninety-five percent since then. To put this into perspective, if a minute were devalued by ninety-five percent, it would be worth three seconds today. At this rate, the average expected lifetime in the U.S. of 78.3 years would be over in just under 4 years. Imagine having a mid-life crisis at the tender age of two! But I digress.

To calculate return on investment (ROI) in terms of time we must recognize and quantify the opportunity cost of time. Opportunity cost in terms of time means that for every hour you spend doing one thing you lose the opportunity to spend that hour for a higher and better use, whatever that may be. For example, if you spend eight hours a day at work, that’s eight hours a day you could have spent with family, pursuing a hobby, working for a higher rate, investing, etc. Going forward we will operate under the assumption that every dollar that you earn from your investment is a dollar that you don’t have to earn by spending time at work and therefore, have that time available to you for whatever you choose. This basically means that as your income from investment increases, your time at work decreases until the point where investment income equals your current income at which point you no longer have to work to maintain the lifestyle you currently have. We will further assume that your current lifestyle, in the material sense, will remain static so that there are no changes in expenses. Therefore if your investments can produce the income you currently earn, you will no longer have to spend the time you currently spend earning what you currently earn to achieve the means you currently have.

Before calculating ROI in terms of time let’s first calculate return on capital invested. ROI is calculated by dividing the amount of your profit by the amount of your investment and multiplying the result by 100 to get a percent. Say we use $50,000 to make a profit of $5,000 we would have a return on investment of 10% ($5,000 ÷ $50,000 X 100 = 10%). Let us now convert our profit in Dollars into profit in time. It may be helpful to think of hours as a currency just like Dollars and as such we are just converting our Dollars into hours like you would when you go to a foreign country. We will make this conversion when we go from the “country” where they invest for money to the “country” where they invest for time. When you are in the “money country” it is the dollars that matter to you but when you live in the “time country” it is the hour currency that you use to judge if you made a profit. We convert Dollars to hours by taking the amount of Dollars and dividing it by the rate (Dollars per hour) we would normally earn otherwise working at our job. Let’s say Joe earns a net $20.00 per hour at his job, his 5,000 Dollar profit from earlier is equivalent to a 250 hour profit ($5,000 ÷ $20 per hour= 250 hours) in terms of time because using our earlier assumptions, Joe now doesn’t have to work 250 hours to make that $5,000 since his investment did it for him. It is interesting to note that if Joe were paid twice as much hourly at his job, his profit of $5,000 would actually be worth half as much to him in terms of time ($5,000 ÷ $40 per hour= 125 hours). This occurs because the higher rate allows Joe to earn that same $5,000 in half the amount of time. Therefore, Joe only frees up an extra 125, as opposed to 250 hours, with his $5,000 profit he made from investing his $50,000. But Joe didn’t just invest his $50,000 to get that profit of 250 hours, he also invested his time. We must recognize that Joe has already spent 2500 hours to earn his initial capital to invest ($50,000 ÷ $20 per hour = 2500 hours) but we will not introduce this into our calculation for reasons I will elaborate on in a moment. Let us assume that between all the time spent on activities related to the investment, Joe has spent 250 hours to make his profit. At first glance it would seem that this would be a 100% ROI in terms of time (250 hour profit ÷ 250 hours invested X 100 = 100%) but this is not the case. Let me explain.
When we invest capital it is acceptable to receive a profit of less than 100% of the capital we invested because after we receive our profit we get our initial capital back. From our example, when Joe invests his $50,000 he is more than happy to receive a 10% ROI of $5,000 because he now has $55,000 (initial investment of $50,000 + profit of $5,000 = $55,000) which is more than the $50,000 he started with. This is not the case with time. When you invest an hour to get an hour you are no better off than when you started because you do not recapture the initial hour invested like you do when investing capital and are therefore net zero. To come out ahead, accounting for the lost hour invested, we need to have a return on investment in terms of time greater than 100%. Accordingly, we can modify our ROI formula to account for this fact. The resulting formula would look like this:
ROI expressed in terms of time = (profit expressed in time ÷ time invested) -1 X 100

Let’s apply this new formula to Joe’s situation. Joe made a $5,000 profit which expressed in time for him is 250 hours (remember we divided the Dollar amount by his wage rate which was $20 per hour). He did this by investing $50,000 and spent another 250 hours on the investment to make his 250 hours profit. Using our formula, Joe’s ROI in terms of time = (250 hours ÷ 250 hours) -1 X 100 = 0%. How can this be?! In terms of Dollars Joe had a 10% ROI. But remember Joe lives in the “time country” where they use hours and not the “money country” where they use Dollars. When converting his profit in the Dollar currency to the hour currency, Joe actually had a 0% ROI when measured in the hour currency. Joe is therefore no better off in terms of time than when he started even though he made a 5,000 Dollar profit!

So the question then becomes, “if I am investing for hours and not dollars, what can I do to increase my ROI expressed in terms of time?” Looking at our formula we have two options. We can either increase our profit expressed in time or decrease our time invested. Sure we could simply neglect our investments and just spend less time on them but this would most certainly have the effect of reducing our profit in both Dollars and hours. Just imagine what would happen to your return on capital if you were to not spend time finding a good investment, not spend time on due diligence, not spend time maintaining your investment, not spend time accounting and record keeping, not spend time reviewing your financial statements, not spend time strategizing with your attorney and CPA……… I think you get my point. This type of behavior would most likely have the effect of you actually losing money which makes your profit expressed in time negative even if you spent no time! This is an important point. Making a profit in Dollars is prerequisite to making a profit in time because you cannot offset a negative profit in dollars by spending a negative amount of time. Hypothetically, the least amount of time you can spend on an investment is zero in which case a negative profit in Dollars will always produce a negative profit in time when converted (which means you have actually lost time because now you have to work at your job to make up for the loss in Dollars if you wish to maintain your current means).

So if we cannot reduce time spent investing by simply not spending it, can we effectively reduce time to increase our profit expressed in hours? We can! Increasing our efficiency can effectively reduce time, without compromising results, through the use of technology, knowledge, skill, and experience which all take time to develop. Although it is advisable to continually strive to become more efficient and develop your knowledge and skill, you can short cut this process by introducing leverage. Just as in financial leverage where you can invest more money than you have, it is possible to use personal leverage to invest more time than you have! Personal leverage is the use of another person to accomplish your objective. This is usually done by paying, or otherwise compensating, someone else to do what you cannot do at all or cannot do as well or as efficiently. Although this will eat into your profit in the amount of the compensation to that person, when the right person is chosen the profit you ultimately reap will be much higher than what you could have gotten yourself and in addition you have reduced the amount of time you had to spend. When we look at the effect this has on our ROI expressed in time equation, the results are profound.

When you leverage the time, skill, expertise, knowledge, and relationships of others you dramatically reduce your time spent while simultaneously increasing Dollar profit which profoundly increases your ROI expressed in terms of time. In searching for ways to increase our ROI expressed in terms of time, we have just successfully explored the bottom of the equation which is the amount of time invested. Let us now explore the top of the equation which is profit in terms of time. Being that the conversion from profit in Dollars to profit in hours is fixed for a given individual, we shall simply look for ways to maximize our Dollar profit which will concurrently maximize our time profit. When seeking maximum profit in absolute terms (not in percentage terms) there are few options. Simply stated, they are increase the principal invested, the rate of return, the leverage on principal, or any combination thereof. Hypothetically the maximum possible return is achieved by investing the maximum possible principal at the maximum possible rate of return using the maximum possible leverage. If you have a propensity towards gambling and are a little sick in the head, this strategy may be a good one for you, but you should be aware of the dangers. To start with, investing all of your capital into one investment vehicle, while leaving you highly exposed to success should the investment be profitable, also leaves you completely exposed should it go bust. The lack of diversification is generally undesirable and the complete investment of your entire capital leaves no reserves should things go awry. The next problem is that when endeavoring to maximize rate of return it gets increasingly harder to find higher and higher rates and, while not a direct correlation, higher yielding investments do often come with higher levels of risk. On a side note, do not draw the conclusion that lower returns equal lower risk. A perfect example today is US T-bills, T-notes, and T-bonds. While yielding next to nothing they are extremely overvalued and very likely over the coming years to deliver to their investors massive capital losses if sold prior to maturity and insidious erosion of principal by inflation if held until then. All from “the world’s safest investment,” but again, I digress. Back to leverage. Just as with the leverage of time, leveraging capital can be an outstanding way to increase your ROI but leverage on capital, unlike time, comes with added risk. Leverage on capital will magnify both profits and losses, so it is extremely important to control for risk and have adequate reserves. On our quest to safely maximize profit in absolute terms, it therefore seems a prudent course to invest low to moderate amounts of our available capital at moderate returns, given the risk of loss is low, and then using maximum leverage to increase our return.

Here at Hassle Free Cash Flow Investing we combine very high leverage on money invested with extremely high leverage on time invested to deliver a truly superior ROI. Thanks to our creative financing and investment techniques we provide leverage that is nearly unmatched in today’s lending environment. We also have an experienced and knowledgable staff, as well as the systems and relationships in place, to provide you with a nearly turn key approach to drastically reduce the amount of time you spend implementing the Hassle Free Cash Flow Investment strategy. These two aspects of our business combine to deliver to our clients impressive returns on investment when measured in both Dollars and hours. For a free consultation to find out if our services and products are right for you, contact me at Until next time, stay sharp!

-Rob Kippel, Hassle-free Cashflow Investing Strategist

The Hassle-Free Cashflow Investment Spectrum

by Hassle-free Cashflow Investing Specialist – Rob Kippel

At its core, Hassle Free cashflow Investing has two fundamental investment strategies: buy-and-hold real estate and real estate secured notes. These two strategies are implemented in a way to reduce both hassle and risk, and then leveraged up as much as possible using long term fixed rate debt to increase returns through arbitrage and the destruction of debt through inflation. Each investor implementing this plan will have a different proportion of one strategy to the other depending on his personal investment goals, risk tolerances, resources, and macroeconomic expectations. On one end of the spectrum would be the investor who only owns a Hassle Free buy-and-hold real estate portfolio but no real estate secured notes. On the other end is the investor whose portfolio is comprised of multiple Hassle Free real estate secured notes but no ownership of rental property. Most people fall somewhere in between, implementing each strategy to some degree depending on their personal situation. To assist you in deciding how you would like to implement the Hassle Free cashflow investment strategy into your portfolio, if at all, I would like to compare and contrast buy-and-hold real estate vs. real estate secured notes and then examine some case studies of how people implemented the Hassle Free Cashflow strategies for their personal circumstances.

Buy-and-hold real estate is a tried and true strategy to building wealth. Individuals have varying degrees of success with the strategy depending on how they go about building their portfolio, but the underlying strategy is sound. Profit sources from this strategy include cashflow, appreciation, amortization, and tax benefits. At Hassle Free cashflow Investing, we implement the buy-and hold strategy as outlined in David Campbell’s free e-book Hassle Free cashflow Investing which can be downloaded under the Investor Education tab at If you haven’t read this book yet, I highly recommend you do so as it can short cut your road to sustainable wealth by helping you start with a fundamentally sound strategy and helping you avoid the mistakes that will slow your progress. Buy-and hold real estate is the “slow and steady” approach. You will not be able to retire the day after you buy your first rental property. Due to the multi-dimensional nature of real estate, it may feel at times that you are spinning your wheels, but over many years, if done correctly, you will find that your are substantially more wealthy than when you started. Just as buy-and-hold is not “get rich quick,” it is also not totally passive either. When implemented according to the Hassle Free cashflow Investing principles, this strategy is quite often, as the name implies, hassle free. But, to be clear, hassle free does not mean effort free! You should be occasionally tending to your investment (or assuring that someone else is while you are not) to make sure it is performing optimally for you. Our buy-and hold strategy, due to its highly leveraged nature, has minimal positive cashflow (but no negative cashflow) and tends to have annualized returns on investment that are significantly higher than other hassle free investments. From a liquidity standpoint, real estate is not an investment you can liquidate at the click of a mouse or the dialing of a phone. Although it is possible to liquidate a property in less than thirty days, this usually requires a well established network of professionals and a drastic reduction in price. One side note that I wish to inject here is that should you ever require some liquidity from your rental property, you may want to consider selling that property using our Hassle Free seller financing strategy. This will usually make your property more marketable and command a higher selling price. In addition, you may wish to be creative and create two or more notes so that you can sell one note to raise needed capital while hanging onto the cashflow and continuing to profit from arbitrage on the rest. With regards to performance in inflationary or deflationary environments, our buy-and-hold strategy will tend to do extremely well during periods of monetary debasement and may underperform during periods of extreme monetary (and more specifically credit) contraction. To further explore this topic please refer to my earlier blog post Hedging Against Deflation in Inflationary Times.

The ownership of real estate secured notes, although less sexy, is a complimentary tool to the buy-and hold strategy in building sustainable wealth. Just as with the buy-and-hold strategy, when implemented the wrong way, it can be very risky and highly ineffective. We, therefore, follow the principles outlined in David’s second free e-book Hassle Free cashflow Lending to reduce risk and increase returns. Real estate secured promissory notes can be acquired in three main ways 1) purchased from an existing note holder 2) created through lending existing capital 3) created on the sale of property you own. To the uncreative, acquiring notes is a typical case of “it takes money to make money.” At Hassle Free cashflow Investing we have assisted many investors implement this strategy in their portfolio through leverage and arbitrage with very little money to start which substantially increases return on investment. The primary profit source of owning notes is cashflow. In the event the borrower defaults and thereby relinquishes the collateral to you there is the potential for significant capital gains and/or increased cashflow. The cashflow received from notes is typically higher than those from the buy-and hold strategy although you are giving up appreciation and tax benefits. Owning notes also tends to be much more hassle-free. Once the initial effort is put in up front, there is not much left to do but collect checks (and if you are really diligent, check on the condition of your collateral). If one of those checks fails to arrive, you will put in just a little more effort to receive handsome capital gains and/or more cashflow once you sell or own the collateral. Total return on investment on Hassle Free cashflow notes will typically be lower when compared to a Hassle Free buy-and-hold property but provide for better cashflow and higher cash-on-cash returns. The steady income stream provided by notes is subject to devaluation in highly inflationary times but potentially more relatively valuable during wide-spread deflation. In addition, seasoned performing notes tend to be more liquid than real estate although they will rarely sell at face value. To get top dollar for your note I would recommend selling to a non-sophisticated investor who would be quite happy with the secure steady stream of payments from your note and will probably over pay for it.

Case study #1
Malcolm and Elyssa are a young couple with two children, Maynard and Cynthia, and have decided to work towards financial freedom by building sustainable wealth through implementing the Hassle Free cashflow Investing strategy. Both have good jobs that they enjoy and plan to keep for the next 5-10 years while they implement their plan. Malcolm pays attention to the severe economic problems facing the US going forward and is absolutely convinced that the Federal Reserve will continue to destroy the value of the dollars they have earned and saved. He also realizes that his children will be paying for unprecedented and unsustainable federal deficits and political folly for the rest of their lives through taxes, inflation, and a lower standard of living. To him, this is unacceptable. Malcolm and his wife decide that although higher cashflow now from their investments would be nice, they really don’t need it and would rather invest for the highest returns and inflation protection. They find out that using the low money down strategies of Hassle Free cashflow Investing, they can purchase two properties per year! Since they have their jobs to support them, they don’t mind the smaller cash-flow and realize they will have substantially more for retirement and to pass on to their kids than if they were to invest in notes. Plus, if they ever wanted to boost their cashflow they know that the team at Hassle Free cashflow Investing can help them create a secured note by selling one of their properties using the Hassle Free seller financing concept. Elyssa doesn’t mind spending the few hours a month to call property managers, review and file documents, and pay bills because it makes her feel secure knowing she is in control as well as giving her a sense of pride from maintaining her nest egg. Malcolm was smart and keeps adequate reserves to allow him to hang on to his properties should problems arise. They both find comfort in the security they feel about their own future as well as their kids’ even in the face of uncertain and treacherous economic times.

Case study # 2
Anthony and June, are in early retirement and are a little anxious that they won’t have enough monthly income to have the type of retirement they had hoped for. Their home is paid for so their monthly expenses are low but they see the price of food and energy going up every year right along with their taxes while their social security checks stay the same and their 401k loses value. Their son Malcolm tries to convince them that this is only the start of inflation and that things are going to get much worse but they remember the stories their parents told them about life during the crushing deflation of the 1930’s and are worried it could happen again. They want to lock up a steady source of income but with interest rates and dividend yields so low they just don’t have enough money to be able to produce the income they need to enjoy retirement. They see how well their son Malcolm and his wife Elyssa are doing with their real estate investing and know it works but they just don’t have the time to wait for that type of portfolio to bear its fruit. Even if they did have the time, they don’t want to be too involved with their investments because they want to spend time together during their retirement to make up for the 30 years of 55+ hour work weeks. Besides, since Malcolm and his wife are actively implementing their investment plan, Anthony and June are not as concerned about having something to pass on to their son. Malcolm suggests to them building a portfolio of cashflowing real estate notes. With the help of the team at Hassle Free cashflow Investing, Anthony and June transfer their 401K’s into self directed retirement accounts. They use this money to make some Hassle Free Private Money Loans which immediately gives them a steady, reliable source of monthly income and a handsome cash-on-cash return. Although June was very hesitant, Malcolm finally convinced her that it was a good idea to take out a new mortgage on their home and invest the proceeds. She was almost crying on the way to the closing thinking of how hard they worked to pay their mortgage off and now they were just going to start all over again. When she received the check for $300,000 that had to be paid back over the next 30 years at 5% interest and she realized that they were now going to invest this money for monthly cashflow at 12% she was ecstatic! “Oh Anthony! We’re finally going to have enough monthly income to retire together!” She was in tears.

Case Study #3
Joe was a single guy who always knew real estate was the path to sustainable wealth and had read extensively on the subject. He didn’t really have a clearly defined strategy, he just knew he had to get started and then go from there. He had held a steady job for quite some time now and always paid his bills on time. As a result Joe had great credit. He knew he could get approved for a mortgage if he could only come up with a big enough down payment. His parents, Anthony and June, just came into a large sum of money after taking out a new mortgage on their free and clear home but they already had plans for investing it all to provide monthly income for their retirement. Joe knew his older brother Malcolm was having steady success with real estate over the years and decided to go to him for advice. Overhearing the conversation, Malcolm’s wife, Elyssa suggested to Joe “Why don’t you call the team at Hassle Free cashflow Investing to see if you can partner with your parents and use your credit to leverage some of your parent’s cash so that you can both profit?” Joe called the next day and spent the next two weeks excitedly exchanging emails and phone calls with various members of the team. Two months later Joe had closed on his first investment property and his parents didn’t even notice the higher return on investment they were getting because they were enjoying their retirement and lower cost of living overseas while Joe and his brother Malcolm managed their parent’s Hassle Free cashflow Investments portfolio. Joe slowly and steadily acquired more buy-and-hold properties like his brother Malcolm but every so often sold a property using the Hassle Free seller financing technique when he needed a cashflow boost in his portfolio. Today Joe owns a balanced portfolio
of buy-and-hold rental property and cashflowing notes, has enough cashflow to leave his job and work as a full time real estate investor, is protected against both inflation and deflation, and is financially free and independent. He has even elevated his financial status enough to be eligible to take advantage of some of the exclusive private placement opportunities only available to high-income and high net-worth clients of Hassle Free cashflow Investing.

There are countless scenarios like these, each one with slightly different details. I would very much enjoy learning the details of your story to assist you, if appropriate, in implementing the Hassle Free cashflow Investing strategy according to your needs. My time is free to you and there are no obligations. In addition, if you meet the requirements I can even set up a free one on one personal investment strategy consultation with professional investor and developer David Campbell! Please email me at or call (866) 931-9149 Ext. 1. I look forward to our conversation. Until next time, stay sharp!

Hedging Against Deflation in an Inflationary World Using Seller Financing

by Rob Kippel, Hassle-free Cashflow Investing Specialist

There is endless debate among economists right now on whether the US is heading for inflation or deflation. While these economists are content arguing back and forth, savvy investors are taking action. The stakes here are very high as being on the wrong side of this trade could be catastrophic while being correct could be outrageously profitable. Not taking a position and just sitting on the fence as most Americans are doing will be costly in either outcome.

Many of whom I consider the brightest economic minds are convinced we are on the precipice of an inflationary holocaust. I, for one, happen to agree but there are an equal number of great minds who have a very plausible argument for why the US will face crushing deflation in the years to come. Even those convinced of an inflationary demise for the dollar will often concede that we will experience a bout of deflation before we face the inevitable inflationary outcome.

Those placing all their bets on one side or the other will either end up tremendously more wealthy then they are today or completely wiped out. This is great if you came to the right conclusion but what if you are wrong? Or what if you were right but the trade goes against you just long enough so that you are unable to hold onto your long positions and you end up not profiting when you had the right strategy? This could certainly be the case if we were to see a severe bout of deflation prior to the spectacular inflation.

If you arrive at the conclusion that inflation is inescapable for the US, as I have, your knee-jerk reaction may be to structure all your investments to profit from Dollar devaluation. Although this position should be extremely profitable, the key is being able to hang onto it through a deflationary storm should it strike. This is where hedging through seller financing a portion of your portfolio can be effective.

A hedge is when an investor takes an opposing position to his core portfolio to help mitigate risk and decrease volatility. Although a hedge will usually lower your return slightly if your core position becomes profitable, it primarily serves to counteract loss on your core portfolio with profits made on the hedge position.

Let’s now see how we can place a hedge on our Hassle-Free Cash Flow Real Estate portfolio by becoming a lender through seller financing.

As David Campbell has shown us in previous newsletters (if you are not familiar with these articles, visit the blog page), purchasing highly leveraged undervalued cash-flowing real estate with long term, low fixed rate debt can be extremely profitable through inflationary times. This is one strategy I particularly like and personally employ in my portfolio, however, a large portfolio like this can get quite hairy during a bad bout of deflation and may cause you to actually lose a substantial amount of the portfolio that would have ultimately been profitable had you been able to hold on to it once inflationary economic conditions resume.

Becoming a lender through seller-financing is a tool you can use to weather the storm and hang on to your core portfolio while you wait for it to bear its fruit. During deflation, the price of your real estate as well as its stream of income will tend to decrease but the debt service remains constant making your debt load more burdensome. If your rental real estate becomes a negative cash flow that you must feed each month, the inability to keep up with the payments will lead to the loss of the property regardless of how much equity you have.

The same way fixed debt works against you as the borrower in deflation, it can work in your favor as the lender when you seller finance a property. As the holder of a seller financed note you will be receiving a fixed level of payments at the same time your expenses are going down in deflation, making the stream of income relatively more valuable. It is this relative increase in income right when you need it that can save a portfolio geared to profit from inflation.

In addition by selling a property with seller financing you will have locked in the price of the property at the sale which would have otherwise decreased during a deflationary episode. This protection does however come at a cost, as most hedges do. When selling a property with seller financing you do give up the other profit sources you would have realized had you simply held and rented that property (appreciation, amortization, and tax benefits).

In addition, in an inflationary environment the relative value of a fixed stream of income decreases as the cost of living increases. So you must ask yourself, “How much is the safety and protection of my portfolio worth?” This is a personal question and the answer will vary from person to person.

A final consideration is the performance of the hedged portfolio should we experience neither inflation nor deflation. The core portfolio of real estate described above hedged with your seller financed notes should provide you with steady returns and income in a normal economic environment. You will realize all the typical profit sources associated with buy-and-hold real estate as well as receiving higher levels of current cash flow from your notes.

Not all seller financing is created equal and it is important that you do it right. Here at Hassle Free Cash Flow Investing we have a world class team in place to help you successfully and properly build a real estate portfolio that can protect you and even profit from the coming inflation. We can subsequently help you increase your cash flow and hedge against deflation through seller financing some of those properties through our unique system.

The best part is that we can help you achieve this with little money down! This strategy is not suitable for everyone and is only applicable to those who are eligible. I would enjoy the opportunity to speak with you to determine your financial goals and eligibility. You can contact me and the team at Hassle Free Cash Flow Investing at (866) 931-9149 Ext. 1 or you can email me at Until next time, stay sharp!

Rob Kippel – Hassle-free Cashflow Investing Strategist

Secrets to a Higher Credit Score and More Importantly How to Profit from It

Secrets to a Higher Credit Score

and More Importantly How to Profit from It

By Professional Investor – David Campbell

Having a good credit score is an asset only if you plan to use it to make money.  I know people who consider their 750 FICO as a badge of honor.   A credit score is a financial tool, NOT a measure of self-worth.   If you aren’t utilizing your credit score to generate passive income,  does it matter whether your FICO is 570 or 750?   It’s like having a luxury car that is too precious to drive.   If your credit score is sitting idle in your garage, it’s time to put it in gear and make money with it!

Here are a few secrets to a higher credit score:

1.    A credit score above 680 gives you the ability to borrow money for investing.

2.    A higher credit score generally means you will be able to borrow cheaper money.

3.    Banks borrow money at a low interest rate (banks can borrow money for 1% or less).

4.    Banks invest the money at a higher interest rates (mortgage rates are around 5%).

5.    Banks earn 5% on money borrowed at 1% which results in a 4% profit on other people’s money!  It is good to be the bank.

6.    Your good credit score allows you to be your own bank!   You can earn 9% on money borrowed at 5% which results in a 4% profit on other people’s money.  If your credit score allows you to be the bank, what are you waiting for?

I can show you how to turn your good credit and a good job into $800,000 of loans at 5% secured by $1,000,000 of real estate WITH NO MONEY DOWN!   If you could borrow $800,000 at 5% ($40,000 year cost) and invest it at 9% ($72,000 income), you would have a 4% profit on $800,000 ($32,000).    If you can make an additional $32,000 from investing your credit score and no cash, why would you let your credit score sit idly in the garage?

If you don’t have a good credit score here are a few tips on how to get one.

1.    MAKE TIMELY PAYMENTS:  This seems obvious, but we sometimes forget.   Consider setting up your bills on automatic bill pay with an arrival date well before your due date. Credit companies typically will let you know when you are a few days late, but they don’t ding your credit until you are 30 days late.  If you get a “late pay” phone call, take it seriously and act right away because your time is running out.

2.    LOWER YOUR RATIOS: Keep your credit utilization  to about 25 to 35 percent of your available credit  The credit bureaus don’t like to see “maxed out” credit.  You can lower the percentage of your drawn credit to credit limit by either paying down your debt and/or increasing your maximum allowable credit limit. In other words, if you have a credit card that is close to its maximum balance, call the credit card company and ask them to increase the credit limit.  Tell them you would like them to do this without pulling your credit.  In addition to this, spread out your balances among your cards trying to keep the ratio between card balances and credit limit to 30% or less.  For example, let’s say you have 3 credit cards and $3,000 in credit card debt. If all the cards have limits of say $4,000, it would be best to put $1,000 on each of the cards than to have just 1 of those cards with the full $3,000 balance.

3.    MINIMIZE CREDIT INQUIRIES:  Applying for credit makes your credit score go down. Applying for new credit is like taking one step backward to go two steps forward.   Once you attain the credit that you applied for, and you make regular on-time payments, your credit score will go up.  If you are shopping for a major purchase such as a car or mortgage, many credit inquiries within a very tight time span are usually only counted as one credit inquiry.   If you are applying for a mortgage, you can get many of your questions answered without having your credit pulled, but to get a definitive credit decision a mortgage broker will always have to pull your credit to understand your debt to income ratio as well as your actual credit number.  Giving your mortgage broker a copy of your credit report can reduce the number of credit inquiries when pre-qualifying for a loan, but a mortgage broker will always pull your credit report once when they submit your loan and sometimes a second time before the loan funds.   If you are waiting for a loan to close, don’t apply for new credit anywhere else until your loan funds.

4.    AGE YOUR CREDIT: Never cancel a credit card that is more than 2 years old.  Having a “seasoned” account is a big plus for you.   If you have children, get them a credit card as early as possible and teach them to use it responsibly.   Length of responsible payment history is a major consideration in the strength and durability of your credit.  Sometimes you can create additional credit history by adding yourself to the account of a family member who has a long and successful credit history.   CAVEAT:  This can become a liability if the payment history of your family member is poor or becomes poor in the future.

5.    LOOK FOR ERRORS:  Studies show that 79% of all credit reports have errors on them.  If you have errors on your credit report you can try to fix them yourself through the credit bureau website or seek the help of a credit repair specialist.  If you are looking for a recommendation, I know an excellent source I would be happy to refer you to.

You see, our relationship isn’t just about helping you find an amazing investment property; that’s a very small part of what we do. I want to make sure you have access to the financial education you need to make smart decisions and a world class team to support you in the execution of your investing plan.

Thanks again for letting me enter your world each week and thanks for the referrals of your friends and family members. I appreciate it and so do they.

If you would like to monetize your good credit, don’t wait, give me a call soon to talk about your options.

To your success,

David Campbell

(866) 931-9149 Ext. 1


Keyword: Higher Credit Score

One of California’s largest employers moving to Dallas, TX by 2012.

By George Avalos
Oakland Tribune
Copart Inc. will move its headquarters out of  Fairfield and shift its head offices to Texas, the  company said Thursday, a departure that jolts  California’s already wobbly economy.

The company, one of the Bay Area’s largest public  companies, employs an estimated 334 workers at its  Fairfield facility. Copart will exit the current  headquarters as soon as late 2012.

Ranked by revenue, Copart is one of the 80 largest  public companies in the nine-county region. Its  market value on Thursday was $2.79 billion.

“We will relocate our corporate headquarters to Dallas,” said Vinnie Mitz, Copart’s president. “The relocation will be carried out in phases beginning early in the summer of 2011 and will continue over the next two years.”

On Jan. 3, Copart sold its 100,000-square-foot headquarters building to Partnership HealthPlan of California. Partnership HealthPlan paid $16.5 million for the building and agreed to lease the complex to Copart for the time being, said Dave McCallum, manager of the market department with Partnership HealthPlan.

Partnership HealthPlan hopes it can move into the building in December 2012, McCallum said.

“It’s unfortunate that California is losing these kinds of companies,” said Brooks Pedder, managing  partner with Colliers International, a commercial realty firm. “Copart’s departure is all about the cost of doing business here.”

Copart has become a stalwart in the Bay Area corporate landscape. Over the 12 months that ended in October, the company  reaped $800 million in sales and $154 million in profits.

The company has managed to marry the old-school business of vehicle salvage with the Internet’s vast reach. The offspring of this union are online auctions for vehicles that have been wrecked or stolen. Copart has parlayed the digital bazaar into an unbroken string of annual profits that stretch back to at least 1992.

“The decision to realign our business and corporate operations is in part due to the dynamic growth opportunities that exist in our changing marketplace,” Mitz said.

Copart will keep three administrative units and certain other operations at what will become a divisional hub in Fairfield. The company will transplant all other corporate functions to new divisional hubs in Grand Prairie, Tex.; Hartford, Conn.; and the new Dallas headquarters.

The company hopes to be able to better connect its field operations with its customers and potential clients.

“Diversifying our office locations allows Copart to be closer geographically to our customers and clients, resulting in greater operational efficiencies and improved customer service,” Mitz said.

Copart executives decided to move its headquarters out of Fairfield in the wake of the state government election results in California in November, said people familiar with Copart’s exit strategy.

“The state’s regulatory environment is as uncertain as ever,” said Gino DiCaro, executive director of the California Manufacturers & Technology Association. “The tax burden for a company to operate a business in California is 13 to 14 percent higher than the rest of the country.”

In December, DiCaro wrote in a blog that the eyes of Texas are on California’s manufacturing jobs. He noted that in 2010, Texas added 1,100 manufacturing jobs for every 1 million residents of that state, while California lost 32 factory jobs for every 1 million Golden State residents.

DiCaro said he thinks the California business climate and the state’s economy face twin foes.

“It’s not just the movement out of California, it’s the new growth that is not occurring here,” he said.

Part of our series of articles on investing in Dallas


REAL ESTATE CENTER AT TEXAS A&M UNIVERSITY:  Home prices increased in the Dallas metropolitan market in 2010, even the prices of distressed homes, according to recent Real Estate Center research.

Center researchers found that homes sold by “typical” or “nondistressed” owners in 2010 were 1.2 percent higher, on a per-square-foot basis, than in 2009. The research also revealed that homes sold by “distressed” owners increased by 2.51 percent in 2010.

As part of a major research effort, the Center combed through more than 500,000 sales records from 2003 to 2010 (51,593 in 2009 and 46,315 in 2010) in the North Texas Real Estate Information System (NTREIS) database to get a more precise view of what has been happening to “typical” and “distressed” home prices in the Dallas-Fort Worth-Arlington Metropolitan Statistical Area (MSA).

The data included all distressed sales reported by NTREIS between $50,000 and $1 million during the eight-year period and all nondistressed sales between $75,000 and $1 million. Distressed sales ranged from a low of 5.7 percent of all sales in 2003 to 16.3 percent of all sales in 2010. In general, a non-distressed sale was sold by an individual and a distressed sale was sold by a financial institution or intermediary.

For more on the researchers’ findings, read the Center’s online news release.

Part of our series of articles on investing in Dallas

Lending Other People’s Money For a Profit

In my last newsletter, I wrote about making passive income from seller financing.  If you missed that newsletter, you can read it on my blog by clicking here.  The idea is to buy a property with conventional financing from a bank at a 5% interest rate, and then immediately resell the property to an occupant at a 9% interest rate.  Assuming you can borrow money at 5% and lend it out at 9% with little to no risk, how much money would you like to borrow? If you’re making 4% profit on $500,000, that’s $20,000 a year of passive income from the banks money!

Would you like an extra $20,000 of cashflow?

For a lot of people, $20,000 of additional passive income would mean instant retirement.   Maybe it is just enough for your spouse to quit their job.   Maybe you could cut back your work schedule so you’ll be home to pick up your kids at school every day.   Maybe it would give you the security cushion you need to quit your job and become self-employed.  Maybe you could just start living life first class instead of coach. Whatever you do with the money is up to you, the important thing is to get started on a plan of action right away.

Sad, but true. Most people never take action.

I have a live deal for you to consider, and if you are interested you should act right away.  It’s not that I can’t find a similar deal in the future, but as the saying goes, a bird in a hand starts your passive income sooner rather than later…  OK, maybe that’s not the saying your were thinking of, but you get the point!   The more important concept at play is the the law of diminishing intent.  Time has a funny way of eroding your momentum. If you take action on something as soon as you form the intention, you are likely to be successful.  The longer you wait from the moment you are excited, the less likely you are to do anything at all. So, don’t wait!

If you’d like more passive income, here is a live deal for you to consider.

house in mesquite, Texas
Above is a three bedroom, two bath house with a beautiful swimming pool built in 1973 located in a nice middle class suburb of Dallas called Mesquite.  To a savvy investor, the details of the house will be unimportant. The interesting thing about this house is the DEAL STRUCTURE.   A family wants to own and live in this house, but they need to rent your credit to do it.   Here is how it works:

YOU and your good credit buy this house for $86,000 with a $17,200 down payment (20%) and a $68,800 bank loan (80%) at 5% interest.   The monthly principal and interest EXPENSE on the money you borrowed is $369.

A FAMILY buys your house for $86,000 with a $17,200 down payment (20%) and a $68,800 seller financed wrap note (80%) at 9% interest.  The principal and interest INCOME on the money you loaned is $554.

YOU collect $554, pay out $369, and KEEP $185 a month.  That’s a profit of $2,220/year.  Your profit comes from borrowing from the bank at 5% and lending to a family at 9%. Nine percent income less five percent cost of funds equals a four percent profit on the bank’s money.

Your total investment is about $3,500 in closing costs to make $2,220 per year profit.  That’s a 63% annual return on investment!!!  In 19 months, you have all your money back and your return becomes INFINITE!!!

BUT, you say… What if the buyer defaults on the loan?  Whether the family pays their mortgage or not, a savvy investor will make sure it is a win for him either way.   If the family doesn’t pay their mortgage, you foreclose on the house and either make it a successful rental OR resell the house to someone else in exactly the same way!  You could collect $17,200 in down payments twice!   While you want your borrower to be successful, in reality you will make more money if your borrower defaults.  The borrower also has a prepayment penalty in the note to ensure if they pay you off early from a sale or refinance, you’ll make enough profit to make the transaction worth the effort.

If you have at least $25,000 and you can qualify for a conventional loan, you should be able to repeat this process over and over again. Within a few days you’ll have your down payment back from your buyer/borrower, and within 19 months you’ll have all your money back.   If you can’t qualify for a loan, you can still play!   I have commercial lenders who will lend non-recourse money to your entity with 35% down and 7.25% interest on a 30 year fixed rate. Commercial lending eats up a lot of your cash flow, but it allows people who are “Fannie / Freddied” out to participate in this opportunity.  Commercial lending is available to non US residents as well.

You could implement this business plan in your own market, but why?   Dallas is one of the strongest real estate markets in the country.  The population is booming, the job market is stable, and many credible experts are predicting a looming housing shortage in Dallas.  While choosing a strong housing market to invest in is important, you are ultimately not investing in real estate.  You are investing in the spread between your borrowing rate and your earning rate (arbitrage).  You loan is secured by an asset with 20% equity which protects you from default.   You are investing in a family who would rather own than rent, but if you took the house back it would make an excellent rental and you’ve got instant equity in it.

While 9% might seem like a high interest rate for a mortgage, the family living in the property is WILLING and ABLE to pay an extra $185/month because there are no other financing options available to them.  The occupant has credit challenges and 9% seems like a great deal to them.

I’ve done the hard work of finding an excellent property with a qualified buyer who has a substantial down payment.   My team will handle the logistics of the entire transaction.  A law firm will draw up the documents, a title company will handle the escrow, and all of these costs are paid by your buyer / borrower.  Even after the sale, our team can service the collection of your mortgage for you.  Ladies and gentlemen, this is about as perfect as Hassle-free Cashflow gets!

If you are ready for $185/month of passive income (or even better how about $185/month x 10 properties), please email me right away!  I expect a high volume of calls on this opportunity.

While this isn’t the only time an opportunity like this will come along, the law of dimishing intent says act on your intention now or you probably never will.

To your success!

David Campbell
Professional Investor, Developer, Financial Mentor

Banks Versus Builders

Builders and banks are in direct competition with each other right now.

I believe construction lending is extra tight because banks are trying to constrict the supply of new inventory to shift buyers into the bank’s foreclosed inventory.  CNBC reports 14% of homeowners and 6% of investors will not consider buying foreclosed properties because of the hassle and time and risk associated with buying from banks.  Banks don’t want to drop their prices, so they can exert their power by restricting supply of inventory.  They do this by limiting the number of foreclosures released onto the market, and by limiting the supply of new construction by clamping down on construction lending.

This is an interesting phenomenon because while quantity of foreclosed inventory varies radically based on local market conditions, lack of construction financing is a national problem.  The result is areas like Dallas cannot add new supply because there is virtually no bank financing for builders.  However, Dallas does not have a back log of foreclosure inventory like Vegas, Detroit, Phoenix, etc.  In fact, Dallas is experiencing a population boom and an artificial restriction on new supply.  Let’s see…Dallas has an increased demand for housing and a restricted supply of new inventory because of national banking policies. Does that seem like an opportunity for anyone?

Consider buying new construction homes in a market like Dallas where there is very little supply coming on the market.  Consider being a private construction lender in a market like Dallas where there is buyer demand, but no supply of credit for builders.  Interested?  Give me a call.

David Campbell
Real Estate Investing Strategist
Office: (866) 931-9149 Ext. 1

How to Profit from QE2 (Quantitative Easing) – PART 1

Regardless of your political opinion about whether quantitative easing is good or bad for our country, the government is telling us they are printing dollars as fast as they can. The question is are you prepared to profit from this inflationary phenomena?

QE2 is a fancy term for “hidden tax on savers, seniors, and foreign nations for the benefit of the US federal government, banks, and owners of leveraged commodities.”  If you know who benefits from, or is hurt by, quantitative easing (aka inflation), doesn’t it make sense to put your chips on the winning side of the equation? Rising prices makes private lending more attractive because as the price of a lender’s collateral rises, the loan to price ratio becomes more favorable (safer) to the lender.  Rising prices make owning leveraged commodities such as positive cashflow real estate more attractive.  As price of commodities rise with inflation, rents go up, real estate prices go up, and debt can be repaid with ‘cheaper dollars’.

I frequently talk about inflation because it is the most important economic force in our lives.  It is by political design that very few people talk about or understand what is happening with inflation.  Here are some excellent Youtube videos describing what is happening with inflation and the dollar –  Quantitative Easing Explained, Glenn Beck: Just Realize What’s Going On  – Part 1Part 2, Peter Schiff on FOX news, The Attack On the Dollar by Richard Maybury.

High inflation in the United States in the foreseeable future is inevitable for the following reasons:
1) The federal government controls inflation and they have the most to gain from it. It’s like the fox guarding the hen house. Congress and the Fed have publicly stated their desired rate of inflation is a doubling of commodity prices every 15 years. This is one way for the US to fund their current budget obligations while staying ahead of the cost of interest on the national debt.  If the US government is successful with their monetary agenda, a hamburger that cost $5 today will be $10 in 2025, $20 in 2050, and $40 in 2065.  While it is hard for me to comprehend $40 hamburgers, it’s equally hard to imagine my parents going to the movies as children and only paying twenty-five cents!

2) It is more popular to inflate than to raise taxes. Inflation is a way for the federal government to tax your savings, because as prices rise, the dollars in your savings account buy less. Savvy investors with political influence know how to profit from inflation and simultaneously shift the tax burden onto the financially illiterate working class. Americans are indoctrinated into a compulsory system of government controlled education which teaches: get a good education, work hard at a job for 40 years, and save your money in banks, the social security retirement fund, and invest in Wall Street. This is another example of the fox watching the hen house.  People are starting to realize this system doesn’t work, because inflation is consistently outpacing the profits generated by savings accounts and Wall Street investments.

3) Inflation is a tax upon foreign nations. The US dollar is the world’s reserve currency for oil.  Every country in the world buys or sells oil denominated in US Dollars.  Regardless of whether you are Japan, China or France, every country in the world must hold huge reserves of US Dollars to buy or sell oil. As the US prints more money, each dollar in circulation buys less stuff and is therefore the dollars they are holding are robbed of valued (inflation).  Foreign governments don’t like this because this gives the US an unfair advantage.  The US can print an infinite number of dollars with the click of a mouse to purchase valuable commodities such as oil from foreign nations. As long as the nations of the world are forced to conduct international oil commerce in US dollars, there will be a need for them to hold US dollars.  It is hugely important to note that more US dollars are held by foreign nations than by Americans.  The moment OPEC starts trading oil in a currency other than US Dollars, there would be sudden and catastrophic inflation in the United States as foreigners race to trade in their worthless paper money for commodities denominated in US currency such as US real estate, food, and precious metals.  (Digression: I haven’t met anyone who can explain why the US military is in the Middle East, but making sure OPEC does not denominate oil in a currency other than US Dollars seems just as plausible a reason as anything else.)
Fortunately, profiting from inflation is relatively simple and I will be covering this topic extensively in my upcoming newsletters.
Best regards,

David Campbell
Real Estate Investor / Developer / Financial Mentor
Founder of Hassle-Free Cash Flow Investing