Welcome to "Building Passive Income Through Real Estate". Well I am a day late this week, so I guess I'll blame the holiday. I hope everyone had a great and safe Thanksgiving. I spent it with my mom down in Chandler, AZ. It is always amazing to see Las Vegas and the Phoenix area after you have been gone for six months. Those two areas are expanding so fast it is like watching a timelapse movie. I didn't get a chance to go by the US Custom's auction house I mentioned last week but I did take time out to review the classifieds and pull a few real estate listing magazines. I did come across one ad that caught my eye. I passed it on to Rick Dearr this afternoon giving him a head start, but I figured I would pass it on to this community as well. Keep in mind that if this is as good as it says these go fast, but it is always good to check it out. Here's the ad that appeared in the Republic:

FSBO/Investor is unloading his income properties today! Priced well under market value for quick sale! His loss can be your gain! All tenant occupied & positive cash flow.
Call 602-435-1305.

Anyone interested in the Phoenix market, might want to give them a call and see what they have left. Here is another ad for a 20 unit up for auction.

AUCTION-WINSLOW:20-unit apartment complex @ 208 N. 2nd St. to be sold Dec. 10. MINIMUM BID ONLY $125K. Call for brochure & info@800-895-9064 or www.swreauctioneers.com

FIX-UP HOMES
10k-30k below mkt! Fin. Avail
Buy before MLS. Flip or Rent.
All Areas. RE/MAX Prof.
Randy 623-773-3600
101st Av/C'back 1625sf POOL$113,800
89th Ave/Union Hills 1764sf$125,600
43rd Ave/T-bird 1450sf POOL$110,900
35th Avenue/T-bird 1288sf$ 95,800
Ahwatukee 2437sf with POOL
$237,983 Some are move-in ready Others are fixer's.
Call 4 details

623-773-3600 azfixup.com

I also added a link to my page on Ryze.com this week. Ryze.com is a great place for networking. Looking at it this weekend, I found over 1100 professionals in the real estate industry on there. Being a friendly guy, I asked them to join my list of friends on the network. In a matter of 3 days, I have 425 new friends involved in either Network Marketing or Real Estate and the confirmation keep coming in. Like I said, last week, you really need to build your network. Hopefully some of the people I met on Ryze.com joined the newsletter this week. If so, welcome. I also have a new contact in CA that has a 1.95% Wealth Building Mortgage. I will be talking with her this week. She is licensed for mortgages across the country, so she isn't limited to California. I also have several people with investment property available across the country and it is just beginning. There are still probably 500 invitations outstanding. Once I get the details about this new mortgage, I'll be posting it here in the next issue.

This week, since I was down in Phoenix, I picked up this weeks copies of "The Record Reporter". I mentioned this periodical in an earlier issue as a source of information. In the first article this week, I thought I would touch on what information can be found in it. Second, I would like to discuss the 125% loans.

Contents:
1. The Record Reporter
2. How about a 125% loan?

The Record Reporter
by Kevin Davis

The Record Reporter is the number one source for legal records for Maricopa County, Arizona. Why do we care about Maricopa County? Because that is where Gilbert, Arizona is. Gilbert is the currently the fastest growing community in the USA.

The Record Reporter is published Monday, Wednesday, and Friday and sells in Borders Books in Phoenix for only a $1. Inside of it, you will find a wealth of information that any real estate investor will find useful (if he/she is investing in Maricopa County). Subscription rates are; $165/year in state and $222/year out of state.

Some of the sections are as follows:

How about a 125% LTV Loan?
by Kevin Davis

What is LTV? LTV stands for Loan To Value, which is the ratio between the market value of your home and the actual debt service or loan outstanding on the property. In the late 90s, financial institutions started pushing 125% loans to maximize their returns with second mortgages beyond the current value of the property. Previously, a second mortgage was generally used for home improvements while the 125% or no equity loans opened up the opportunity for debt consolidation as well.

Generally, to qualify for this loan, they are looking for a FICO score above 650 and debt income ratio that are normally considered excellent credit. As competition increases, they can become more flexible on these requirements or adjust rates to factor in the risk. One drawback from what I understand, you will not be able to deduct the interest paid on any loan above the fair market value. So, at tax time, you will need to recalculate the interest up to the fair market value and use that for calculating your deduction. The remaining interest is considered interest on unsecured debt. They can be a good alternative if you have high rates on credit cards or a car payment. The thing to look at though is also the duration you are taking to pay it off. You should also consider the appreciation rates in your area and when you plan to sell your house. You may find yourself upside down in debt and have to pay a considerable amount at closing in order to payoff the mortgage on the house you just sold.

Interest rates on these second loans are also not anywhere near your conventional mortgages. You can see rates from 10% on up to 18%. You are also probably going to end up spending some on the frontend at closing as well. Many times homeowners that decide this is an option to "get them out of debt" then look at their empty credti cards and start charging again and end up in worse shape eventually declaring bankruptcy.

This is definitely something that takes caution and a educated approach. Please remember that I am not a loan officer and it is best to speak with your laon officer and get all the fact before venturing down this path.

Just a quick note in closing. For those in the Los Angeles area, Rick Dearr and I will be in the Little Saigon area Dec 12-14. We will also be driving down, so we will be passing through Las Vegas and meeting up with our realtor Jason Tomei as well. If you would like to meet with us while we're out and about in these area, drop me an email and we can setup a time to meet.

Have a great week. If you go out to Ryze.com, stop by my guestbook and leave me a note.

For a recorded conference call with Ron LeGrand or Dolf DeRoos, send me an email at

mailto:webmaster@firehorseinvestments.com

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