Hello everyone and welcome back to another installment of our group Q and A where we give you Street Smart answers to your Street Smart questions.

I’m very excited about what’s happened over the last two weeks since the last time we met.  The industry has changed dramatically, of course, with the sale of Bear Sterns to J P Morgan.  It’s amazing.  J P Morgan made its big inroad into the financial 101 years ago by doing exactly the same thing, buying a company for pennies on the dollar, and being able to step in and grow their business.  And, now here we are 101 years later where J P Morgan is no longer around, but his company still is.

What are we learning from what they did?  If you pay attention, they are buying when everyone else is selling.  They are buying when there is blood in the streets.  If you’ll notice, the other smart thing that J P Morgan did, they never got into a big commitment to these sub prime mortgages that many of these other folks thought was absolutely no end to the rainbow, and they just continued to make more, and more, and more of loans they never should have made in the first place.  This gives us a real opportunity to take advantage of today’s market, not be afraid of it, but actually step in and take advantage of it.  Remember that when others are selling, that is the time to buy.

Now, I realize that many of you are challenged by what’s happening in your market place, and you are concerned that the bottom hasn’t arrived yet.  You don’t have to worry about that with the Street Smart system as much as you do if you are in the retail business.  Let me explain.  If today you were buying a property for, say $200,000, and the market was, say $200,000 for that property, there’s not a lot of profit in it, of course.  So, we’ve got to be able to buy it cheaper and better.  We’ve got to be able to structure and design a deal that’s going to make the profit for you.  I’ve seen a few deals like this in the last week.  It was interesting.  The question was how we are going to make money with this.  The answer is the seller is going to pay you to buy the house.

Now, there are three different approaches to that.  Number one, we would like to have a lump sum from the seller to pay us to buy.  That’s the best strategy.  If that is not possible in this particular transaction, then the next strategy is to have them pay you some money and the balance they pay to you over time on a monthly payment or even a bi-weekly payment.  If that doesn’t work and they don’t have any down payment money, then what kind of collateral do they have?  Can you get a title to a vehicle?  Can you get a lot, a free and clear lot, perhaps, that they have, or some other way to secure yourself.

Then, finally, if none of that will work, you will take back owner financing from them at the rate of X dollars per month, or per pay period for them to pay you.  Now, that would be a separate promissory note and you have to have a very significant expectation of payment.  I can tell you that collecting from people that have nothing is very difficult to do.  You want to look at their job, how long they’ve been on their job.  And, again, your expectation of repayment.  If they own their car free and clear, for example, then getting a title should be an easy thing.  You can list yourself as a lien holder on that title.  If they ever go to sell the property, the car, then you would be paid off on your lien.

That gives you an opportunity, now, to look at deals another way.  We’re going to be talking a lot more about that at our upcoming Millionaire Deal Maker that’s happening March 27th through 30th.  My gosh, if you haven’t been to that training, you are really missing out.  The point is that we have to learn the way to be able to structure deals that other people simply don’t know.  This is the challenge out there in the real world.  Other people, yourself included, are going out there, meeting with sellers, or reviewing details of offers and not knowing what to do next.  This is the training where we go in depth and actually change your thinking, and have you look at deals a completely different way, and look at all the potential profit centers there are there.  And, all the different ways that you could structure it to be able to be able to get all those profit centers.  So, definitely pay attention to that.

If you haven’t been to MDM, mark your calendar now.  We’ll be doing it again, I believe, in October.  You just make sure that you do not miss this training because it’s too critical to your future for you to actually know how to do deals.

Now, we’ve got some trust questions.  Why don’t we start of with some trust questions?  I usually put those last.  Why don’t we do it first this time?

We’ve got a carry forward question from Velva from Florida.  She says Hi Lou.  If I change the name of a trust on my residence in the Orlando area, do I dissolve it, quit claim it, and start all over? It has an unusual name.

Let’s start there.  What does she do in order to change the trust that’s already in place?  I take it that it’s already recorded on public record, so, we’ve already got an existing trust.  What she wants to do is merely change the name.  There are several different options.  One is to quit claim it, merely quit claim it from the one trust to the new trust.  That way it would typically avoid a transfer tax.  A quitclaim deed is the most; let me word it this way, a quitclaim deed is the least considered deed in the courthouse.  A quitclaim deed merely means, and it’s not quick claim, by the way, it’s quitclaim deed.  They quit any claim they have in that property to whomever they quit that claim to.  That means that if they had it, you’ve now got it.  So, in this case it’s the trustee of the trust that has that trust now, quit claims it to a new trust, they’re saying if we had it, you’ve now got it.  That could be one way of doing it and avoiding the transfer taxes.

Number two: you could re-record the old deed with a new name and a, what’s called scriveners affidavit to clarify the recording on public record.  That would merely mean taking the old deed that has already been recorded and now typing the word, “Corrective”, above the word “Warranty Deed”, and then putting in the correct name and attaching an affidavit explaining exactly what you did.  That previously the trust was recorded in this name and now it is this name.  That, typically, is when a mistake was made, previously, on any of the recorded paperwork.  Then you can do a scriveners affidavit and a re-record with the corrections on it and that completes the chain of title.

Another way of doing this is you could deed from the old trust to the new trust.  That would mean creating an all-new deed and just having a complete transfer from the old trust to the new.  You could register it for transfer tax as a gift.  That would be a gift from the one trust to another, and therefore, there should be no transfer tax.

The main thing that you are trying to accomplish here on public record, is merely to show the chain of title that is going from one entity to another entity, and that there is a clear chain transferring from the old one with the correct signatures into the new name.  Velva, I hope that clears it up for you.

Our next question is a serious problem with a partner, from Dorothy.  She says what do I do.  Hi Lou, this is Dorothy from Bloomington.  I have a multi-layered challenge on my hands.  First, to refresh your memory, the property that I’m asking your advice about is a modular obtained through catching up the defaulted loan in the amount of approximately $20,000.  We lease optioned, obtained before your training, no land trust, with a partner who went behind my back and got seven other investors involved; no mention of me in their agreement papers, to the tune of approximately $16,000 in addition to my personal $13,233, and her zero dollars invested.

That’s a sad story Dorothy.  The first consideration that you have, number one, is that with my training at Millionaire Deal Maker you now understand that the proper way to structure this deal is not to pay a big amount on a defaulted loan, but merely to do a work-out with the lender, and pay as little cash as you possibly can.  Then pay the balance over time or even have it added to the back end of the loan.  That way you have preserved your capital.  That was the first challenge, and now we know what to do about that one.

The second challenge, of course, is that you are not on the deed and she is.  She actually controls the deed.  Let’s go on to read.  In addition, the property is, thanks to my partner keeping pertinent bits of mail out of my hand, seriously back in foreclosure; now, 14 months worth.  The directors have just bounced the last month and one-fifth $940 check and have decided after seriously trashing that they will not make good, and I should proceed with an eviction filing.  We also have accruing attorney’s fees because of trying to do a workout with the mortgage company’s lawyer.  Should I just walk and lose my junk of change, or continue trying to straighten this disaster up.  Help.  I am in your Platinum Apprentice Program.  See you at MDM.

That’s good news, Dorothy, because you definitely need additional training here to make sure that you don’t do that transaction like that ever again, and that we have everything in place to make sure that you do that, as you know.

First of all, what you can do to protect your chunk of change in this deal is to file a mechanics lien against the property.  Obviously, your money was used for some purpose at that property.  At least that would prevent her from selling it to someone else, which, granted, is highly unlikely right now with the 14 months of arrearage.  Also recognize that you paid $20,000, or your group did, to reinstate that loan in the first place.  It’s not beyond the comprehension that somebody else might come along and pay to reinstate that loan as well.  If you have something on public record that, as least, gives you a telephone call if the property goes to sell, then you’ve got some kind of knowledge and protection in the sale of the property.

Finally, if the property is lost, I would definitely sue her.  You have an investment and she misled you.  I’m not sure that what she did rises to the tenants of fraud, however, that’s something that your attorney in Indiana could answer.  This, perhaps, could be considered criminal, but it’s likely that the DA would not pursue this as a criminal matter and would tell you that this is a civil matter.  Why?  Because you were involved together.  Now, if she did misled you and it was criminal, and it was not above board, and you have some proof of that, then you could make it a criminal matter.  In which case, you wouldn’t have any attorney’s fees because the state would pay for it.  In this case if they say, no, this is a civil matter, and then you’re going to have to sue her.  Possibly, it depends on the limits of your small claims court there; in Georgia, for example, the limits are $15,000.  You may have limits similar to that in Indiana, which means that you could sue her in the least expensive court and the shortest period of time to have your case heard which would be the magistrate court or the small claims court.

First find out what the limits are, and then you can choose which court is best suited for this transaction.  It may be that you have to sue her in superior court because real estate matters are heard by superior court, above a certain amount.  You’ll have to find that out.

What is also a consideration is how much is it going to cost you to go after her.  You want to try to find an attorney who will do this on an, either pro bono, which means for free basis, or on a contingent fee basis.  Whatever you collect from her the attorney will get a percentage of that.  That would be a good way to pursue this, and then we can create from there.

It’s too bad that happened to you.  I know you’ve learned a lot from this.  The main thing to do, for all of us, to train and retrain ourselves and remind ourselves is that all matters in real estate must be in writing.  Period.  Any money you ever release out of your hand, you first have an agreement to show that what you’ve agreed to is very clear and that you both understand it the way it is written.  It’s signed by both parties and even notarized so that the person can’t say that you forged their signature.  Once that document is created and they have a copy and you have a copy, now it’s clear what the deal is.  Then, and only then, would you release funds.

Of course, with our trust strategy, it gives you the opportunity to go ahead and take title to a property in trust, and then the trust actually controls the asset; the trust and the trustee.  You would be listed as a beneficiary of that trust, and your partner would be listed as a beneficiary.  Then, using a document that we have in the Volume IV, Land Trust, there’s a document there called the Beneficiaries Agreement.  The Beneficiaries Agreement outlines who’s doing what, what the details of the relationship are, and it can be altered so that every detail of what you have agreed to is included in that Beneficiaries Agreement.

Then, finally, once you do that Beneficiaries Agreement, it could even be an agreement between, not you and your partner, but even your trust, your personal property trust and the partner, or your personal property trust and, if they are a graduate of our training, then their personal property trust.  You could create a joint venture, of sorts, rather than a partnership.

Partnerships are, typically, not very long lived.  It’s far better to create a situation where you are merely joint venturing on a single property.  Then, if you like what happens, you can do that again, and again, and again.  That’s a good way to set that up.

I hope everyone learned from Dorothy’s situation.  That’s something that definitely happens out there in the real world.  You need to be Street Smart about how you do deals in the real world in terms of protecting yourself, your money, and your future.  Also, the grief; can you just imagine the grief that Dorothy is going through with this particular situation, as well.  You can avoid all of that with the use of trusts, and with the use of the proper paperwork between the parties.

Edward has a trust question.  Do trusts need tax ID numbers to open up checking accounts?  If so, who has access to the funds, the trustee, the beneficiary, or both?

Let’s start with do trusts need an ID number to open bank accounts.  The answer is, if you are going to operate the trust as a separate entity, then yes, it would have to have its own ID number.  If it’s not your account, but, indeed, it’s the trust’s account, then of course you would not use your Social Security number to open it with.  You would actually use the ID number of the trust.  How do you obtain the ID number?  You go to Volume IV, Land Trusts, and right there in the section that refers to this very issue on numbers, there is a form that you have to submit to the IRS to obtain the ID number.  If you are a beneficiary of the trust, then you can use your own Social Security number with which to obtain that ID number.  Once the ID number is obtained, then you can apply to receive or to open a trust bank account.

Keep in mind that we’ve Street Smarted that process, as well.  We have a relationship with Bank of America, and can even provide you with the documents necessary from Bank of America to open up to three accounts under your trust name and ID number.  Using this strategy you would not have to go through the falderal of trying to do it on your own.  We’ve already paved the road for you.  You just step in, you provide then with the information they need, and by phone and FAX they will actually go ahead and get your bank account set up for you.  If you need more information about that, or need those forms, call the office at 1-800-578-9580 and we can provide that to you by FAX.

Edward, the answer is yes.  You do need that ID number.  The second question you had is, if so, who has access to the funds, the trustee, the beneficiary, or both?

The answer is it depends on who you place on the signature card.  If you are the only one authorized to do any business in that account, then it would only be your name even if there is a separate trustee.  You would be the only one that could access the funds.

By the same token, if you wanted both the trustee and you to have access, then both of you would sign the card, and both of you would have access to the funds.

What does Lou recommend?  I recommend that wherever the money is, is where you are and you would control the funds.  It would be set up in a personal property trust and you would likely be the beneficiary of that trust.  In that case you would need to be the signatory on the account, as well.

The third question you have is how does a beneficiary get the funds?  The answer is, write a check.  I would suggest that you have it as a checking account.  You can even have a savings account attached to it, but I would definitely use the checking account for that.

Edward has a follow-up question as well.  Do you know of any web sites, companies, or businesses where we can learn more about off-shore trusts, irrevocable trusts, family limited partnerships, and the other entities on your, so called, paranoia scale.

Edward, I would answer you that there is an awful lot to learn.  Offshore trusts are not as beneficial as they once were.  When Bill Clinton was in office he signed an executive order that, basically, made offshore trusts somewhat worthless.   Number one, if you set one up you have to disclose it now on your tax return.  If you have any kind of offshore trust you have to disclose it.  That defeats some of the privacy purposes right there.  Not to say that you can’t do it.  You can do it.  You just have to disclose it.

There are also issues with costs.  Many of these offshore trusts are very, very expensive.  I would tell you that you are welcome to put the word offshore trusts in your Google search engine and see what comes up.  Then write me any follow-up questions you may have after you do your research there.  You can do the same with irrevocable trusts and with family limited partnerships.  Maybe I can give you more specifics after you’ve done that research on your own.  I would say the best thing to do is merely use your search engine to do that; either Yahoo, Google, or Ask Jeeves, or some of the others to just test that out.

Roberta has a question on deal structuring.  Roberta says there is a house for sale in north Florida on the Sewanee River, 5,000 square feet, two acres with a spring.  The price has just been lowered to $324,900, less than $65.00 a square foot.  Another house on the river, 2700 square feet, has just sold for $500,000.  This has been for sale for more than a year and I’d like to try to get it.  What would be the best way to structure the deal?  I’d have to include for the sellers to make at least two months payments because there is no way I could make $2200 per month payment.

Roberta my first response is going to be I don’t have enough information here.  Basically, you told me the price, but you haven’t told me anything else.  You’ve mentioned payment of $2200 a month, but I don’t know if that’s existing payments or if you just put that number in your trusty calculator and came up with those payments yourself.  The real question is, what is the existing financing.  What is the existing interest rate?  Does it include taxes and insurance?  What are the terms of that mortgage?  Is it adjustable rate or fixed rate?  Is it a 30-year loan, a 40-year loan, a 20-year loan?  Is there 10 years left on the loan?  What’s going on with this particular loan?

Your first work is to go back to the drawing board.  Get out your seller questionnaire which asks all the pertinent questions that are necessary for us to create a Street Smart offer on here.  To further answer your question I would also suggest that you get out your Cost to Sell Worksheet, which is part of your Seller Presentation kit, and is also in your Buying, Volume I, and is also in your Millionaire Jump Start Manual.  I’d get that our and work backwards to make your offer.

You’d start with the 324,900 at the top of the page as the asking price.  Then you begin putting in all of the costs that it would cost the seller to sell their home.  Once you get down to that final number, that’s going to be the beginning point of the negotiation.  That can help guide you in how to structure the transaction.  As you say, what it the best way to structure the deal,

In my mind, the best way it to take over existing financing and have the seller pay you to buy the house.  It’s likely, once you get through with the cost to sell, there are going to be considerable costs, I know this already, in the seller getting that property sold.  Wouldn’t it be better, in fact, to go through and calculate all that?  Then sit there with the seller and show them the facts of life of how you arrived at your numbers.  Do it with the seller involved in the transaction.

Roberta, I certainly hope that you’re signed up for the Millionaires Deal Maker.  If not, come on and join us this week and then you can repeat it in October.  You definitely need the training.  Structuring deals is what its all about.  That’s where all the money is made, the big money.  Therefore, anyone who does not have the training, in depth, in how to structure deals is missing out and actually wasting leads.  I hear this happen all the time.  Oh, Lou, I had a hundred leads in the last month and I didn’t have any deals.  I’d guarantee you, if  I looked at that I would find you a deal.  There is money in those piles of leads.  You can’t see it.  The reason you can’t see it is because you don’t know what you are looking at.  That’s where training comes in.  You actually understand what you are looking at, how to craft and design the deal to make the maximum profits available in that transaction.  Deal structuring is what it’s all about, Roberta and everybody else listening to this.  Let’s make sure that we get you trained up on that.

By the way, if you are unable to make this month’s Millionaire Deal Maker, call the office and get signed up now before the price goes up.  We can do a payment plan with you so that by the time it comes up you’re paid off in full and you spread it out over time.  You definitely need the training, as we just went over here.  It’s training that will absolutely make you your money back the first time you do a deal after I train you on it.  Very important.

Cadre had an REO and non-performing notes question.  He says hi Lou.  Thank you for the response to the question I asked you last time about buying a non-performing note and bulk REO properties.  You requested me to forward the offers to you, which I did.  I Faxed different offers to you but have not gotten a response back.  Like you mentioned, I would like to partner the deals with you.  Would you also consider teaching your students this aspect of real estate investing just to broaden our knowledge?  I hope to discuss more about this with you at the MDM event in the next few days.

That’s good news Cadre.  I’m glad you are going to be there.  Yes, I did respond back to that.  You’ll recall what we need to know when we are putting together packages of non-performing notes and bulk REO property, is we need to know all of the details about those borrowers.  Mortgages are one thing.  REO properties are another.  Let me explain.  When a lender loans money, they are loaning it against the real estate.  Until they actually own that real estate it’s just paper.  The paper is what the customer is paying on.  When the customer defaults the bank has an asset.  They have a paper.  They do not have the house.  They only have the paper.

They can take that paper and do things with it.  They can sell it off at a huge discount, which is what many of them do.  All of their defaulted loans every month they package them together and they sell them off to people like Litton Loan Servicing, Option I, Aquan, and others who buy them at huge discounts.  They take on the job of doing workouts with customers, selling them at short sale, or doing whatever is necessary with that loan to get it performing.

The good new for the lender here is they are getting rid of the paper.  The bad news is they still have to go through the foreclosure process.  Only after foreclosure process has been gone through does it then become REO, Real Estate Owned.  It’s very important that you learn this process, and that once it becomes real estate owned is it now an asset of the bank in real estate form.

There are two assets.  First it’s paper.  Then it gets converted into real property.  Then the customer gets evicted from the property.  Now they have a vacant piece of real estate.

There are two different aspects.  And, good news for you, we have a specialist coming in to teach paper at the event.  You are going to learn about how to buy defaulted paper.  The other thing you are going to learn about is REO properties at the event.  That’s good news there.

How do you find out about REO properties?  You get your phone book out and start calling every realtor office in town and asking who is the agent who specializes in bank owned property, or bank take back property.  That’s who you want to talk to.  That’s whose list you want to get on.

Many times you’ve heard Gurus say what you do is call up the bank and get on their REO list.  The bank doesn’t have such a thing.  In most cases the bank manages their situation by listing that property with a real estate professional.  That real estate professional has the job of selling the property.  The bank doesn’t want to get involved in the selling process.  They only are in the money business.  That’s who you want to work with is the realtor who is the specialist in that.  There are many of them in most towns, so you can just make those telephone calls, find out who they are, and get on their good side, and their list.

I hope that that gave you enough training on that topic to get you through.  Then we’ll cover a lot more at the training.

Beau Jessperson has a question about Subject To.  Beau’s up in Maine.  Hello Lou.  Spring is here and I am excited.

That is great news.  I am all pumped up, too.

My question to you is have you ever had a loan called due.  If so, what did you do?  If not, what would you do?

Let’s answer that one first.  I have never, personally, had a loan called due.  I have had students and licensees of ours who have had issues with lenders.  Let’s understand what the issue is.  If the lender is tipped off that the loan has been transferred, then they have the option in the mortgage to call the loan due.  It’s called the Due upon Sale Clause.  It’s typically paragraph 17 in many mortgages.  What the lender is saying is, gee, we decided that we are going to go ahead and force you to pay off the loan.

Let me give you a couple of scenarios here.  First of all, if the lender were to call the loan due, they typically give plenty of time for the loan to be refinanced, 60, 90 days is not uncommon.  Here’s the truth.  We’ve had several of our licensees have the loan called, but when I got involved through my coaching, I had them respond back in a certain way, and that actually took care of the matter.  In other words, the lender backed down and did not call the loan due even though they threatened to do it.

Pay attention to me here.  Just because they may write a letter that says the loan is being called due is a far stretch from actually doing so.  Of course, the people who get in fear, they’ll run out, get a new mortgage, pay them off, and the bank wins.  Those who are Street Smart know exactly what to do.  That is that you’ve followed all the steps in Volume IV in Section IV called, Buying Properties Subject To Existing Loans Safely.  We’ve got a structure there of 12 steps that you have to go through in order to effectively do a Subject To that prevents the lender from calling the loan due.  What I’m saying is, there is a checklist and a step-by-step process to set yourself up for success.

Subject To is a very effective method of buying property.  That means, for those of you who don’t know what Subject to is, you are able to take over existing financing, in someone else’s name, on someone else’s credit report, someone else pays the closing cost for, someone else qualified for, and all you do in merely step in and take over payments.

We do this with great caution and with great care.  You do not take over a property subject to the existing loan just because you can do it.  You do it because it makes financial sense for you and for the customer to do it.  You do not buy property unless all of the numbers make 1000 percent sense.  So, be careful about buying the property in the first place, make sure that it fits within our criteria.  If it does, then there is equity going in.  If, god forbid, you ever did have to refinance the property, there’s plenty of equity there to be able to go out to the loan market and get a new loan.

To further answer your question, we’ve had the loans called and I was able to get involved and actually have the banks back down.  If you ever have that situation, just understand that that’s one of the reasons Lou’s here.  I can take you through that process and make sure that doesn’t happen.

Recently we just had someone of about a month ago had a situation like that.  We actually assisted in writing the letter to the lender.  One of the things I pointed out to the lender was in today’s market, with foreclosures, and bankruptcies, and defaults, what are you doing here?  You are actually calling a loan that is a performing loan, that has all the payments paid on time, and now you’re calling it do.  Why?  I can’t wait until I get it in front of a judge and bring this question up to you.

The second thing is I threatened to also write to the congressman.  I said all the congress people in this area would love to know that lenders are calling loans due on performing mortgages in today’s economy.  I don’t think they would be very happy about that.  There were six points that I made in the letter.  It’s very, very likely that the lender will not call the loan due.

I want to also point out the fact that that is extremely uncommon for that to happen.  In, I would say, 95 out of 100 of these it goes off without a hitch.  You don’t get any threatening mail and that kind of thing.  Subject to is a great way to be able to buy property, but you have to do it with the proper training.  Yes, we do cover that at Millionaire Deal Maker in great detail so that you are fully trained on how to successfully do Subject To’s.  Short sales, too, but Subject to’s where you can work with the seller, take the  property over subject to the existing financing, reinstate that loan, take over the payments, put a customer in, and be able to continue to make those payments until your customer actually buys the property, or doesn’t buy the  property.  You actually pay down, pay down, and pay off that loan.  It’s a wonderful thing.

Beau also has a question; also do you think it is wise to take over rehab property subject to?

Why not?  The property needs rehab and of course you would have to go to the bank and qualify for a loan, or go through a private money source to get the funds to buy the property in the first place, so why not take over the property subject to.

You go on to say, my concern is the cash in the deal if something goes wrong; i.e. the loan is called do to the owner getting tired of having his name on a loan he is not connected to any longer.

Let’s look at it this way, Beau, if the seller, say, calls the bank years later and says I am tired of this.  I want you to call this loan due.  The bank has a problem.  They’ve been accepting payments under this strategy for a very long period of time.  You see, what we do to pre-empt the bank from being able to call the loan due later, is we actually notify them that the property has been placed in trust for estate planning purposes, and also, that you have been appointed as manager.  We also change the insurance from a homeowner’s policy to a renter’s policy.  Therefore the bank does not exercise it’s option to call the loan due in paragraph 17 because of a transfer, and also because of a requirement for occupancy.  They just, in other words, ignore it.  They continue to take payments and, in law, that creates something called a waiver.  They’ve now waived their option, or their opportunity to come in and take over that property.  That’s one of the techniques that we can use against them, as well.

By the way, I’ve got you covered.  What I would say is, with training, you go out and do subject to.  It’s a good thing.  We actually are helping the economy.  We are not hurting the economy.  We help lenders.  We don’t hurt lenders.  We reinstate loans.  We don’t create defaults and foreclosures.  We take defaulted loans and make them good again, and make them good on the balance sheets of the lenders again.  It’s a very good thing for the lender, a very good thing for the seller, very good thing for the buyer.  In other words, win, win, win all the way around.

We have a web site question here from Joe.  He says when you drive traffic to a web site how many people do you lose who are not internet savvy, or who don’t read well?

Joe, that’s a great question.  I would say that you’ve really got to pay attention to the fact that times have changed.  In fact, according to Neilson Net Ratings, which is a polling agency that tests all kinds of different things in the market place, they found that as of September of 2007, 92 percent of Americans are internet active, and use the internet at least one time per month to look something up, shop, or do something on the internet.  I would say to you that I’m not worried about losing people.  What I’m worried about is managing the traffic that I do create.  Your real focus should be on generating leads and if you are doing that in a good enough fashion, then you’re generating so many leads that they have to be managed.

We’ve created a whole automated process to make sure that you don’t have problems in that procedure.  If there is a telephone call generated it first goes through the phone tree and people listen to the way that you do your business.  Remember that we have already prerecorded all of those messages, both on the buying side and the selling side.  Remember that we provide the phone service for you so that you’ve actually got a service that is free inbound calls and free outbound calls, and you get a free 1-800 number as well.  Remember that all those things are managed for you, and you separately pay for the scripts to be added to your phone system.  Once those are set up, they are there forever.  That manages your leads.

The other thing that happens, once they press zero, it can either come to you or it can be routed to your live answering service, which we’ve got a solution for that as well.  Web sites are terrific ways to manage your leads because on your sign, on your ad in the newspaper, on your postcard, on your letters, whatever it may be, you have provided several different ways for them to get in touch with you.  One is the telephone number.  Two is that web address.  They can go check you out.  They can fill out your questionnaire on line.  They can press submit.  The whole deal comes to you by e-mail and you get all the information that you need in order to structure the deal the Street Smart way.

This is a real good way to set it up, Joe.  I would suggest that everyone listening to this call needs to automate your business.  Don’t be afraid that you are going to lose any traffic.  Again, they’re not forced to go to the web site.  We use that as an option.

Some of our Street Smart folks who have jobs and have other obligations, only provide their web address.  They don’t want the telephone call in the first place.  I would suggest that you at least provide the telephone number and let it be routed to our live answering solution so that someone does take that call.  Then you provide them two ways to reach you.  Very good question.

We’ve got a purchasing property question from Ann, here, who says how do you protect your interest in the property while searching the title when the seller did sell to someone else and that person filed a warranty deed before you?

Ann that is part of our Street Smart system.  In Buying, Volume I we have a form there called Affidavit Memorandum of Purchase and Sale Agreement. As soon as you get your property under contract, and before you close on that transaction, you trot yourself down, or mail in to the courthouse the Affidavit Memorandum of Purchase and Sale.  That then gets recorded on public record against that deed.  Anyone doing a title search, which anyone who buys a property first has to do a title search to make sure that there are no liens, encumbrances, or anything against that title that you are not aware of.  You go and purchase that property and guess what.  That Affidavit Memorandum is found.  If it’s yours or if someone else goes to purchase your Affidavit is found, and right there is your telephone number.  They can call.  They can inquire.  They can find out that, indeed, you are the one who has the first position to buy that property and not this third party.

Unfortunately, in your case, Ann, the warranty deed has already been filed.  There has been a transfer of property.  You have a contract; you could sue for damages and specific performance.  Unfortunately this happens all the time because people are not Street Smart and they don’t protect their interests to make sure that situations like this don’t happen.  Hopefully, you’ve learned something from that and that will never happen to you again.

Go back to, also, Volume I and study that because I’ve got all the procedures and processes in there.  Yes, we do talk about this at not only Millionaire Deal Maker, but also at Millionaire Jump Start to get you jump started right and protect you.

By the way, the next Jump Start is coming up next month in Dallas, Texas.  I believe it’s the 19th and 20th in Dallas, Texas, so I encourage all of you to get yourself to the Jump Start.  If you have not been there, or if you have not been recently, we’d love to see you again.  I tell you there is a tremendous amount of training that occurs in that two days.  It is absolutely jam-packed full.  You do receive a special manual that we’ve designed for the event loaded with information.  We make it very, very valuable for you to be there, very valuable for your time.  I highly encourage you to get yourself to the next Millionaire Jump Start.  Again, you can call the office at 1-800-578-8580 and we can give you all the details and get you registered.

We have a CPA question.  Where do we find a CPA who will do component depreciation in Atlanta?

Mark, I can tell you that competent is what I misspoke just a few minutes ago, but component has to be done by a competent CPA.  I will say that most CPAs because they are generalists and not specific to real estate, they know bits and pieces about depreciation, write-offs, etc, but they don’t know everything there is to know.  I would say that it is very important that you get yourself to the right CPA.

We have found the right group.  We can refer you on to people who are highly trained in all the different benefits that real estate offers, and to help you set yourself up right to be able to do componentized depreciation and so many other things.  Just call the office and we can give you more details on that.  Good, good question.

Have a tenant question here from William who says how do we get a tenant out of our home if they filed bankruptcy to stay for free for a year?

William, I can tell you because you’re Street Smart, that’s not going to happen to you.  Street Smart folks don’t allow people to take advantage of them that way.  Here’s what I mean by that.  Rent that has been unpaid in the past can be included in a bankruptcy.  Rent that accrues after the bankruptcy has been filed must be paid.  If they don’t pay it, you have the right to evict them from the property for, not the past rent, but the new current rent after the bankruptcy has been filed.  The only problem with what I just described to you is that the judges in dispossessory eviction court don’t know that.  When they find out that the tenant is under a bankruptcy, they will typically not allow you to go forward with your eviction.  You have to file what’s called a motion for a lift of stay.  What happens is when someone files bankruptcy; they get what’s called a stay of all actions.  All actions against anything that may happen from any creditor.  They get to stay in their home.  They get to keep their car.  They get to keep their bank account, whatever, and no creditor can do anything during that bankruptcy proceeding.  Unless the creditor goes back to the court and files this, what’s called Motion for Lift of Stay.  You could do this very quickly after the bankruptcy is filed and they have defaulted again.  You file for your Motion for Lift of Stay.  That is heard before the judge.  It is typically granted.  We just got one granted a few weeks ago.  It was not a big deal at all.  The tenant did exactly as I just described and then failed to pay their new rent as it became due.  We filed for the Motion for the Lift of Stay and they are now out of the property.

In our strategy, in the Street Smart way of doing business, people can’t stay for long periods of time because we’ve already figured out how to protect you from that kind of situation.

Lou, is the Magistrate the lawyer?  How do you know if he is or isn’t an attorney?  Does it matter?  Is it a traffic court attorney?

Amy it’s an interesting question.  First of all, throughout the country many Magistrate Court judges are not attorneys.  Let me just describe what Magistrate Court is.  It’s what I call the Kangaroo Court, or the Tourists Court because people go through the court.  They use it to collect small claims, issues, the hairdresser put the wrong color on my hair, and it turned orange and I’m suing.  My brother-in-law used my car and had a wreck and he owes me for the damage; things like that.  Many times eviction cases are heard by Magistrate Court.

Here’s the challenge for us.  These folks are not attorneys.  They are not trained.  They listen to the arguments at hand and then they make a decision based on what they think they ought to do.  The problem for us is they often don’t know what they’re doing, and they ignore the law because they don’t know the law.  The good news is that if your case is heard in Magistrate Court, you can appeal it, what’s called a Denovo Appeal, for absolutely no cost.  You can appeal it to the real court, or the next highest court, they call it.  But, it’s actually the real court that actually does have a trained, licensed attorney as the judge and therefore, they have a little bit more college of the law and how the law works.  In your case, you are asking is the Magistrate a lawyer, it really depends on what the standards are in your state.  Often, as I said, they are not.

How do you know if he is or isn’t?  You don’t unless you ask.

Does it matter?  Yes, it matters because you’re often not going to get the judgment you’re looking for if you are working with someone who doesn’t really understand the law.  However, it can work in your favor.  The only way you can really find out is to use it.

Is Traffic Court an attorney?  The answer is Traffic Court is not an attorney.  Traffic court is Traffic Court and they resolve traffic issues.

We’ve covered a lot of ground today; a lot of information.  I hope you agree.  That’s one of the things we look to do in these detailed answers is really give you a lot of information, information that you don’t know.  I think you’d agree with me that it’s great to be able to not only hear the answer to your question, but hear answers to everybody else’s questions, too.  Other folks have asked questions that you never even thought about.  That’s a great thing, too.