Currently the general rule is that every offering of a security must be registered with the SEC, unless exempt. Most real estate syndicators (the ones pooling private money from lots of investment partners) try to take advantage of the exemption available through Regulation D, Rules 504, 505 and 506. Each of these rules prohibits the issuer from making an offer through advertising or solicitation, which covers making offers on the Internet.

The House of Representatives passed H.R. 2930 which authorizes the Entrepreneur Access to Capital Act. If passed by the Senate and signed into law by the President, this Act would create a new exemption from the requirement to register the sale of a security with the SEC providing that:

* The total amount of securities sold by an issuer in a 12 month period does not exceed $1MM, or $2MM if the issuer provides audited financial statements to the potential investors; and

*The aggregate value of securities sold by an issuer to any individual investor does not exceed the lessor of $10,000 or 10 percent of the investor’s annual income.

This Act does not place a limit on the number of investors, does not prohibit advertising and general solicitation and does not require extensive disclosure be made to investors. However, the issuer must:

1. Put a warning on their website that the investment is speculative and illiquid;

2. Warn investors that there are restrictions on the resale of these securities;

3. Not provide investment advice to investors;

4. Have each investor complete an offering questionnaire that will show that the investor understands the level of risk involved in the security being offered;

5. State the amount of money to be raised and have a third party hold the funds until 60% of the stated amount has been raised; and

6. Outsource cash management to a qualified third party, like a licensed mortgage broker or broker-dealer.

As the legislation proceeds through the channels there are a few things that could muck it up for us real estate investors such as:

* The limitation of the $1MM funding limit
* The management of large number of small investors
* The requirement that a broker-dealer will be involved in the cash management of the fund
* The requirement that the SEC issue rules and regulations that govern crowdfunding – they could spoil the whole party!

Do your part and call your Senator to support the Act!

Commerce Department data shows that rentals increased by 749,000 in the last quarter of 2011.  Additionally, we’re seeing the lowest level of ownership in nearly 14 years.

The good news for investors is that because we are a nation of renters, rents are higher because demand is stronger. Currently, the median rental price is $712/month. And prices are going anywhere but down.

It’s All Good News for Investors

Demand is up. Rent is up. Home ownership is not the current American dream – a place to live is. Let’s look at how investors can take advantage of this situation – Buy & Hold, Flippers & Multi-Family.

Buy & Hold Highlights

This group should consider holding properties longer to maximize your cash flow, especially in this time of uncertainty. You can buy cheap now, hold and rent and sell when the market returns. According to the MSNBC article, homebuyers don’t have much confidence that we are at the bottom of the market. The empty house problem is slowing, but it’s not going anywhere anytime soon. So, if you’re holding, keep on and use this renter’s demand to add a little cash to your monthly bottom line.

The Flipster’s Strategy

Flippers can take advantage of this situation as well. Landlords need inventory, so it’s time to play let’s make a deal! Get in there and get those homes ready to rent and rake in the cash. Now is a great time to scoop of bank-held homes and flip to landlord investors.

Another trend in the market right now is that banks are waiting to foreclose until they clear the REO pipeline. Grab that late list and start contacting homeowners. You may be able to get them out of a bad situation and flip.

Plus, with home prices predicted to fall another 5 to 10 percent with the current unemployment problems, it’s a great time to scoop up flip properties. Your landlords are waiting for the flip.

Multi-Family is Where It’s At – The Money, That Is

For you commercial multi-family investors, it’s the single shining star in the market. More renters mean more investment opps for commercial properties. Get in now while you have a steady supply of lessees.

A little proof for the pudding:

“The steady rise in demand for rentals has tightened the supply of housing, helping to push rents higher. Homebuilders report that the market for multi-family units has been a lone bright spot in the overall housing market.” – MSNBC.com

Check out this free webinar on how you can invest in apartment properties without cash, credit or even experience. It’s live and this week and you have four opportunities to attend. Sign up now.

Yes, that plan will require tweaking because unexpected events pop up, but you have a plan and believe in it. Business dabblers may have somewhat of a plan, but they are still trying to finish that plan or they don’t believe in the value of that plan enough to stick with it.

So, let’s get down to the meat of planning your daily activities – the steps you will take to get to the goals you set for yourself this year.

Use Sunday afternoon or evening wisely. You don’t need much time, but if you take a half hour to look at your week and fill in your calendar with what you know you need to do, Monday gets better – automatically.

Spend a little time plotting personal appointments, administrative hours, networking hours, marketing hours, exercise and investor meetings. Living by your calendar can help you become so much more productive because you know what you should be doing instead of wondering “what’s next?”

Do a little food prep on the weekend. Know how people stick to their diets or train for a marathon? They have a plan! They schedule in time to prep food and time to train each week. They follow a menu plan – either one they create or one their nutritionist/trainer creates.

Hot tip: This is how you save money on groceries and avoid the time sinks of stopping at the store when you could be learning more about your business.

Establish your goals for the month. You could make this one of your Sunday sessions or use the quiet of a Friday afternoon. It’s good to do it right before the end of the month. Here are a few steps to planning next month:

1. Evaluate the past 30 days. What opportunities are on the horizon? What didn’t work? What did work? Where did you spend most of your time?
2. Plan the next 30 days. What are your revenue goals? How many investors meetings do you want to book? How many networking opportunities do you want to create? What’s your marketing schedule?
3. Look out 12 weeks. What’s coming up that you could do now? This is especially good for marketing. If you know there’s a big event or workshop coming up, what do you need to do in the next month to make it successful? Is there a webinar or course you want to try? Plot it on your plan.

Make your to-do list for tomorrow today. This will save you years of time. You have your calendar, but you will still have tasks and projects. Projects should be broken up into steps and put on your calendar. Tasks are those little things that require one step to complete. Send that email. Check on that deal. Mail your mom a birthday card. You know the little things that keep you up at night. Plan for them today and you’ll accomplish more of them tomorrow.

And I’m taking the medicine too, so we’re in this together.

I had a training session for some of my students last night and when polled 74% of them did not have a business plan.

No plan at all for success.

It was shocking but not surprising.

And as we went through the training to teach them to create their value statement, business plan and investment criteria it became clear from the questions asked that there was very little interest in establishing these foundations.

Instead, many of the questions were all about short cuts.  Even illegal ones.

In the gurus’ quest to make their marketing messages resonate with the masses, you got screwed.

Exhibit A: Recognize these marketing pitches?

* This software finds, analyzes and sells houses for you at the push of a button.
* Unlimited funding with just $10 down.
* 1 million cash buyers in 10 minutes
* You find it and we will fund it and flip it for you.

It looks great in the sales video and then you pull out your wallet and buy and after two minutes in the program reality sets in.

You have to do work.

You have to put up websites and send postcards and talk to leads (talk to them?!) and negotiate with sellers and do your due diligence and qualify for financing and develop and nurture partner relationships.

All the stuff you were trying to avoid doing in the first place.

I get it.

I suffer from it, too.

Not in real estate investing because I know that takes work.  I’ve been doing it successfully since 1994 and there is no easy button. (Trust me, I looked)

There are tools and training that make it simpler and give great guidance but there is nothing and no one that will do it for me.

Here’s the paradox.

I’ve struggled with my weight since college.

I was a skinny kid but then I quit exercising and discovered beer and pizza and for years it’s been a struggle.

I want to lose weight and intellectually I know that to do that I need to cut calories and exercise.

But I reject that in my never-ending quest for the magic pill that will give me Sandra Bullock’s body.

Over the years I’ve spent so much money on contraptions (Ab Roller anyone?), pills, powders, creams and even injections that were supposed to make me lose weight.

Exhibit B:  Recognize any of these pitches?

* Rub this cream on your thighs and cellulite disappears
* Sprinkle this powder on your food and lose 50 lbs with no exercise
* Take this pill and it blocks all the fat you eat so keep enjoying all your favorite foods and still lose weight

When I decided 2012 was the year to get serious about my weight loss, guess what I did?

I made a plan.

I got a Fitbit to track my calories in and calories out.  I cut out alcohol (no more Oregon Pinots), limited my calories to just 1200 a day of juiced organic fruits and vegetables and started running on the treadmill.

The result? I’ve lost 23 lbs in 29 days.

Way more than I ever lost with any of the miracle pills or easy buttons.

I created a plan and I am doing the work to achieve the results.

Thank goodness I finally got real.

Want to succeed in real estate investing?

Want to experience the freedom that so many of us enjoy now that we have mastered the skills involved and reap the financial rewards?

Then quit looking for the shortcut and start doing the work.

Create your plan.

WORK your plan.

Treat it like the professional business it is and quit dabbling.

Quit complaining that courses don’t work because everyone knows that courses don’t work.  PEOPLE do.

Tools and training will assist you on your journey but no tool or training can ever take the place of you doing the work necessary to succeed.

If my weight loss stalls I’d be the biggest idiot in the world to blame the treadmill, juicer or Fitbit.  Those are my tools but I have to do the work to get the results.

Get real with me and make 2012 the year you finally quit looking for the easy button and get to work.

Does this help or hurt the investor market and, more importantly, the recovery of the real estate market in general? Or does it just prolong the inevitable?

Federal Reserve Chairman Ben Bernanke supports the national REO rental program saying in a white paper to Congress on this issue that “although small investors are currently buying and converting foreclosed properties to rental units on a limited scale, larger-scale conversions have not occurred.”

He points to three reasons this has not occurred –

• Grouping properties geographically has proven difficult and because of this it’s hard to streamline fixed costs
• Financing is hard to obtain and the REO holders are losing money in bulk sales
• Regulators have “generally encouraged sales of REO property as early as practicable.”

But what happens when the government becomes landlord in chief?

Bernanke says that that because Fannie Mae, Freddie Mac and the FHA are currently holding half of the REO inventory, they “might be able to aggregate enough properties to facilitate a cost-effective rental program in many rental markets.”

Does this just prolong the issue of loss to help the market recover?

The white paper states, “Preliminary estimates suggest that about two-fifths of Fannie Mae’s REO inventory would have a cap rate above 8 percent–sufficiently high to indicate renting the property might deliver a better loss recovery than selling the property.”

That statement doesn’t tell us anything about how long this program will last. It doesn’t tell us the costs involved. Nor, does it tell us what effect this will have on the overall economy.

Sure, more renters will have places to live. But this doesn’t answer the long-term question. And the analysts firms disagree on what’s best, according to today’s HousingWire recap of the topic at the American Securitization Forum.

In Jacob Gafney’s report, Laurie Goodman, a managing director with Amherst Securities said this program “would result in a cottage industry devoted to third-party management of these properties.”

Barclays analysts disagreed and said the program “remains difficult to scale effectively and may not draw as much money as envisioned.”

So what does the white paper say about the success of the program?

• It offers several scenarios for how the program could work, but they also say “no such program currently exists, predicting its success of efficacy is difficult. Ongoing experimentation and analysis will be a crucial component of developing such a program.”
• Most of the properties held by Fannie Mae by “would have a cap rate above 8 percent.” This indicates that “renting the property might deliver a better loss recovery than selling the property.”
• The paper also suggests that home ownership is the best solution to this REO deluge. However, they also point out how difficult it is to get a mortgage in the current economic conditions.

So, what do you think? Would a national REO rental program help speed recovery or prolong it? Should the government go ahead and cut their losses and release the properties in bulk REO packages?