I recently attended a Millionaires Market Game where I met some who invested in oil fields. I got to talking with him and we decided that I could raise a few million dollars for him to start drilling in some of his oil fields. Apparently his fields have a total of $600 million worth of oil & gas in them.

Since I don’t have any info on oil & gas investing I thought I’d do some research on it. Well I found some pretty interesting stuff. First you probably need to be accredited to invest but there is room for tiny investors too [but not much]. Second and most interestingly the returns are 25% to 50% per year. It takes a few months to start production of oil, at which point you start getting dividends.

Of course there are significant risks involved. The oil field could be a dud and you can’t extract oil profitably from it. Then there’s the swindle risk. How trust worthy are oil field operators?

Don’t know how I’m going to come up with the money, but its a lot of money if I can!

If anyone has any exprience in this, please drop me a line at emptyspacesinc@gmail.com

Last thursday I attended an asset protection seminar by attorney Clint Coons of www.alglaw.com. It was pretty good and it reconfirmed some of the information I had read elsewhere.

1. Own real estate in a manager-managed LLC for optimal asset protection and tax benefits.
Nevada has great benefits for an LLC. Charging order is the only remedy in Nevada.

2. Use a C-Corp to shelter real estate related income.

3. Use a Land Trust [grantor trust] for obscuring ownership. Its not foolproof but it hides ownership. If LLC is the beneficiary you also have asset protection.

Overall, I was very impressed with his legal and tax knowledge. They sell a kit for creating your own corporation, LLC and land trust for $1500. I’ll probably get that. I’ve already created a C Corp and an LLC but it’s propbably worth it to learn more about the different entities.

In my experience, it never takes 30 days to close on a purchase. Always 45 to 60 days. I’m trying to buy 2 houses in Indiana. Both were supposed to close on the 4th November. This got pushed back to the 11th. Around the 7th I remembered I was going out of town so we pushed it back to the 17th. At this point the seller said after the 15th, there’s a $50/day late fee. Thats fine, my loan officer promised me we’d close on the 17th. Then we’re supposed to close on the 21st. Then the 22nd. The seller said we better close on the 23rd or the deals off.

Well I really wanted this deal since it was $90k for a 4/2.5/2 1650 sq ft 5 year old house with a replacement cost of $135k, but I was willing to walk away if need be. I just didnt tell the loan officer that.

Anyway, finally at 4pm today I got the loan docs. Just enough time to go to the bank, get a cashiers check, head off to my favorite escrow company, have them print out the email I got with the loan docs, blindly sign them and notarize them and drop them off in the fedex box for overnight delivery with 5 minutes to spare!

If you loan officer claims they can close in 30 days, don’t believe them. Especially if you’ve never done business with them and they’ve been in the business for a short period of time.

It seems that GM and the american car manufacturers are having a tough time staying afloat. The November 14th edition of Wall Street Journal had an article titled ” A Middle Class Made by Detroit Is Now Threatened by Its Slump” about how the car parts suppliers located around Detroit are also facing a similar recession and are cutting back on employees, wages and benefits.

At the Self-Storage seminar I attended a few weeks ago, one of the presenters mentioned Detroit as a place with potential. He was a hard-money lender and said he was lending money to investors in Detroit. I disagreed with him on that issue and I thought he didn’t know what he was talking about.

Just over a year ago I was looking at Detroit as a place to potentially invest. Houses were dirt cheap and the CAP rates on apartment buildings were in the 20s!!!! Then I found out why. For the past 20 years there has been a steady population loss, job loss and a decrease in the median wages. The median wages should increase slightly year over year but that wasn’t the case in Detroit. Doesn’t sound like a place with tons of opportunity to me.

And now with the WSJ article, it just confirms my belief. Always look for a turn-around before you invest in a contrarian market.

Bloomberg News reports that Foreign Investors are losing their appetite for US Debt.

This basically means that the Fed is going to have to raise the interest rates offered on the treasures, which in turn will cause the mortgage rates to rise as well. This doesn’t bode too well for the countless investors and homeowners with ARMs. In San Diego this year, 87% of all new loans were ARMs. This is one of the factors that will cause home prices to deflate in the area.

Finally closed on my house in Grantsville, Utah. I had booked it in March for $151k and it appraised for $171k which is pretty good. It took about 6 weeks to close after completion, partly because my loan officer was in hospital for surgery and partly because my debt to income ratio sucks now. I could go stated and lie about my income just like everyone else, but I’d rather go full-doc. Its a federal offense to lie about your finances and I’d rather no go to jail for that!

My man on the ground found me a lease-option tenant and they’re ready to move in December 1st so I’m golden!

Now I just need to close on my 6th house in Utah. Its in a place called Jacob’s Ranch, Saratoga Springs just south of Salt Lake City. Thats a tough one even though I’m putting 20% down. Lets see how that works out.

I had a really long chat on the phone with Robert Campbell, author of The Real Estate Timing Newsletter today.

I gave a presentation at one of his seminars a few months ago and we’ve in touch ever since. I like the way he thinks. He does a lot of research and crunches the numbers about the economic trends and tries to figure out which way the market is heading.

He’s pretty bearish about the economy in general and the home prices in San Diego which he thinks will drop 40%. [I actually think prices will drop 45%, so I joked that he was being optimistic!]. He thinks that the economy will see a recession in the next few years and I tend to believe him. But thats a topic for another day.

He has a methodology[which is outlined in his book] which he uses to forecast the market trends for home prices in any given location. Historically its had an 80% accuracy rate which is pretty good. His indicator just flashed a sell signal back in August for San Diego so if any of you reading this are in SoCal, nows the time to get out.

I got out exactly at that time and I no longer own anything in California. As I’ve mentioned in my previous posts, I’m investing in Boise and Utah both of which flashed buy signals using his methodology [something verified by a geeky friend of mine]

Went to the local real estate meeting. I think San Diego has the best REI club in the nation and probably the world. Its non-profit and all profits go to the library.

John Schaub was last night’s speaker and he was pretty funny and made a couple of extremely valid points.

1. When you eat out with investors, its not a business meal thats subject to 50% deduction, but a marketing cost that you can deduct 100%.

2. Markets are cyclical. So why buy in places like Texas that never go up when you can buy in San Diego. If you’re creative and can come up with ways to pay the mortgage for a few years eventually the rents here will rise and so will the property values. A $500k house in San Diego will be worth $5 million in another 25 years, while in Texas a $150k will probably be worth $300k. [based on whats happened over the past 25 years].

3. He had everyone who’s been sued stand up. In an audience of around 250 about 40 people stood up. Out of that only 1 person ever had to pay more than $10k from his own pocket. So don’t waste money on asset protection, but get good insurance.

I liked what he had to say so I picked up his latest book. I figure it’ll be interesting and I can probably get one idea to make me an extra $5k so the 20 bucks is a good investment.

The Business Opportunities Blog has a ton of ideas for legitimate businesses for entreprenuers and advice on how to start your own business.

Apparently since 2001, Dane Carlson has helped thousands of individuals in their quest for starting a business.

He had a post on an entrepreneur self-assesment test.

Do you have what it takes?

Through the generosity of a fellow investor, I was able to attend 3-day a Self-storage seminar for free in Salt Lake City last week.

The seminar was at an actual self-storage facility called King Arthur Self-Storage, where apparently the customer is king!. I was amazed at the quality of the facility. It had grade-A commercial offices built into it and a phenomenally plush conference room. I learnt all about the different aspects of starting a self-storage from raising capital,finding land, hiring good help, installing security systems, commercial lending and marketing it. One thing I didn’t get enough of was the actual numbers, but I’m a number cruncher so I’ll do that myself. I also found out that the self-storage industry has trade-shows and I plan to attend one soon. If you have the land, it costs about 2 million to set up a self-storage complex and you need about $500k cash.

I also met some great investors there and learnt a lot of new things. One of the investors owns 50 businesses [with no debt] and is planning on opening a bank catering towards gocery stores! There was a programmer, a nurse, a builder, an ex-FBI agent, a general contractor and a bunch of other interesting characters. There was also a civil engineer employed by the city of Los Angeles whose Ebay jewellery store did 80-90k in revenue every month! Meeting investors and creating relationships is half the value of these seminars.