I’m not too thrilled with my property manager on the 2 houses I bought in Indiana. Since I did such a lousy job the first time around, I guess I need to pull out the old books and see how to choose a better one. Who better to find a good property manager than Adiel Gorel who promotes distance investing. I flipped through his book Remoted Controlled Real Estate Riches: The Busy Person’s Guide to Real Estate Investing.

Adiel calls himself a facilitator and helps newbie investors invest in different states and of course charges a commission. While I may not fully agree with his choice of location for investments, his advice is rock-solid.

Here’s some questions to ask a potential property manager:

1. How long have you been in the business?
2. Are you a member of any professional associations?
3. Do you specialize in residential properties?
4. Do you work weekends?
5. How many properties do you currently manage? Whats the total number you’ve ever managed?
6. Are these properties in the same area as my property?
7. Can you supply references?
8. which services do you offer?
9. What is your fee?
10. Do you charge a leasing fee?
11. Do you have additional fee for lease renewals?
12. How do you advertise and market the properties you manage?
13. Whats the average time for renting a new property?
14. Whats the average turn-around time for a property(cleaning, repairs, move-in)?
15. How often do you check on a property?
16. How do you handle late payments?
17. Have you ever evicted a tenant? Whats the procedure? How much do you charge the owner?
18. Do you issue annual and monthly statements?

This list is quite comprehensive and I failed to ask my property manager most of them. I should know better by now!

For those of you who’ve been following my blog, you know I’ve been working on some secretive deal regarding some oil deal. Well now its that time in the process when the rubber hits the road. The bank we’ve been dealing with has agreed to lend us $20 million. However, we need to show up in person in Connecticut pretty soon and deposit $200,000 with their attorney. The deposit is to make sure we don’t waste their time and money and then decide to go with a cheaper lender. Anyway, we’re going to be borrowing the money from private investors at a generous rate. Here’s the official spiel.

20% Return in 90 Days – Principal Guaranteed

We are in the process of closing on a $20M loan for a large oil and natural gas investment opportunity. We need $200,000 to be used as deposit to ensure that we will not go with another lender. This is a no-risk loan as the funds will never be used and will only sit in an escrow account during the entire closing process (this is the reason we can guarantee the principal back in case the project does not fund).

The full principal will be paid back within 45 days in case the loan does not get funded. For all purposes, we are 99% certain the loan will fund as all of the documentation and due diligence work has been provided and completed. The only remaining steps before closing are a face-to-face meeting with the lender and a site inspection visit of the mineral lease location. We are offering a 20% return over 90 days (80% annualized return) with full payout when the project gets funded. The minimum investment amount is $25,000.

If you’re interested, shoot me an email but more importantly wish us luck!

Incidentally, several people asked me how I came across this deal and what due diligence I did.
The short version is that it included being in the right place in the right time, asking a lot people a lot of stupid questions, flying out to the middle of freaking nowhere to look at a stupid oil pump & recognising that when commodity brokers and lenders are salivating at the prospect of giving a $20 million non-recourse loan, its probably a good deal.

Picked up Safe Strategies for Financial Freedom over the weekend. Really good book. I wish I had read it a few years ago. Its been on my book list for ages but I never got around to buying it.

One of the things I believe might happen is the devaluation of the dollar. This book has also voiced similar concerns[even though it was written in 2003] and it has some strategies to hedge against this. One is to buy gold. Another is to invest in foriegn currencies. And unlike other books which leave you hanging, you tells you how to invest in foreign currencies. It recommends looking in to EverBank for this purpose. This company allows you to buy CDs in different currencies. The 3 month Australian CD offers over 4%, the 3 month New Zealand CD offers 6% and the Icelandic CD offers a whopping 8%.

Another thing the book mentions is that Australia is a gold producing country and we can expect its currency to strengthen against the dollar because of this. It mentions why the dollar is likely to devalue and its pretty interesting. If you invest in the Australian CD through everbank and it strengthen’s against the dollar, not only do you get a 4% return, you also get some capital appreciation.

Also has some good debt reduction tips and offers encouragement to the readers to gain financial freedom.

The authors suggest that you always want to invest in the stock market when interest rates are dropping and get out or short the market while interest rates are climbing. Ok, its slightly more complex than that, but thats the gist. In inflationary times they recommend investing in real estate, gold and collectibles[like rare coins and stamps]. Since I don’t currently invest much in the stock market I skimmed through the section on stock investing. Sounds pretty basic, and they wants you to sign up for some advanced training offered through their websites:www.investmentu.com and www.iitm.com.

On the whole I thoght it was a very good book on general strategies and when to implement them. But don’t be taken in by the simplicity of the strategies. If it was that easy, everyone would be rich!

February 28th edition of the Wall Street Journal had an article called “Meathead Economics”.

The said that 240,000 people left the state of California in 2005 because of high taxes. What BS! Just another example of reporters looking at data and drawing the wrong conclusion.

They left because of unaffordable housing. Would you pay $400k for an 800 sq ft condo with 1 parking spot when you can move to a neighboring state, get a job that pays the same and get a new house for $200k thats atleast twice the size?

Previously I posted an article about this being an issue and I believe it will only get worse. In 2006 I wouldn’t be surprized if that number doubled. Since 2001, 50% of jobs in CA have been real estate related. Once the housing market falters, a lot of people who’ve been used to making 6 figure incomes will find themselves without any source of revenue and no real skills. These people will be forced to move to other booming states, which will only add to the housing woes.