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Nationwide Property Investments, LLC has just launched their membership area named Online Real Estate Investors Alliance (OREIA) which allows members to become affiliates and earn residual monthly income. Once you are approved as an affiliate, you are able to market the membership to friends, family, associates, business contacts, databases, etc. For each person who joins, you will receive a percentage of the monthly fee. The minimum will be $5 per person, per month. Once that member joins, you continue to receive commission checks either monthly or quarterly for as long as they are active members. Refer 100 members and earn a minimum of $6,000 each and every year! Remember that this is only the minimum and can increase with our affiliates who produce more referred members. Nationwide will provide marketing ideas and literature, as well as banner ads and links to email out or place on your own website. While you market the membership as an affiliate, you will also have the benefits of all the mebership privaleges and learn real estate investing by the sharpest minds in the business. All of this with no guru hype or bootcamp upsells!

We all know that during the long-term ownership of rental properties, you will experience vacancies, but how do you estimate or calculate the appropriate percentages or figures into your expenses? The answer is not simple and there is not one answer for all investments.

Let's start with residential 1-4 unit properties. First and foremost, you must determine what the specific area's vacancy rate is for this type of unit. This can be found at many resources including RE agents, NAR (National Association of Realtors) statistical data, & property managers. It is practically impossible to find out for sure what the vacancy rate has been over the last few years on the individual property you are looking at, as the owner can say anything they want. There is no way for you to prove otherwise. Therefore, you should use a combination of three factors. One is the average vacancy data collected from the sources listed above. Two, is to determine if the vacancy rates are declining or increasing in that area and adjust accordingly. Finally, you can adjust the final number you choose to use up a point or two based on investment style. If you are a very conservative investor, take the data figure you arrived at from methods 1 & 2 and add 2 points to it. Then plug in that number to arrive at your AGI (Adjusted Gross Income). This gives you a bit more of a cushion to allow for greater vacancy rates.

Occupancy rates (OR) for multifamily commercial buildings (apartments) are published by several sources as well and more accurate data is available. You can also discover the true actual OR for the specific property from the current rent roll. This figure can also be verified through a number of strategies. It is most important to calculate the value based on the current OR and not the seller's listed proforma. Never pay for upside potential!

The OR can dramatically change from state to state and from city to city, therefore it is most important to accumulate data from the specific area you are investing. Here is some current OR data for commercial multifamily in the US compiled by NAR: Ohio has the highest vacancy rate (VR) in the country at 12%, Michigan is second worst at 10%. Most markets today are sitting at 3-5%. Remember that taking state averages are not accurate enough and you need to get the city or even down to the community average VR.

Operating expense ratios are a big topic as well and here is my take on that. Using average ratios rather than average figures could end up getting you into trouble in your cash flow projections. The difference between the two is simple. Ratios or percentages can dramatically change depending on the investment vehicle, the OR, the rental income, the state, and many other factors. Using average figures rather than ratios will give you a more accurate result. To say that your operating expenses will be x% in all cases is simply not accurate enough. In addition, a commercial multi with a OR of only 75% will have a much higher EO ratio than a unit with an OR of 95%.

Multifamily is not the only commercial investments to consider when looking at vacancy rates. Here is some data on commercial office space in the US: The largest VR in the country is sitting at 20% and is estimated to increase due to the poor economic situation and the dried up lending market. For retail space, the highest vacancy rate in the US sits at 12.7%, also projected to increase dramatically due to the same factors. Apartment OR have actually been holding there own and due to the massive foreclosure rates and lack of residential loan programs, more and more families are forced to rent rather than own. This has had a positive effect on rental rates and OR for the commercial multifamily market and the rental rates are projected to iincrease again in 2009 due to these factors.

Will Barnard - Managing Partner of Nationwide Property Investments, LLC

Most of us know about the value of private lending and are always in search of more. Now more than ever, we need to utilize these types of funds as the traditional mortgage industry has been turned upside down. Banks and lenders are asking for ridiculous criteria and holding on to their funds rather than lending. While this can not continue forever, it makes it very difficult to do deals right now with the lack of liquidity, assuming you utilize leverage.

So the questions become, how do we find more private funds, how do we market to them, how do we negotiate the terms and conditions, and how do we make sure we protect ourselves and the private investor from risk, loss, or legal issues. The answers are not easy, but can be done properly with the proper professional assistance, marketing plan, and having a prepared and professionally put together presentation.

We at Nationwide Property Investments, LLC are aggressively looking for additional private funds so that we may take advantage of the best buying opportunity in our lifetime. If you have or know someone who has liquid funds to invest and are looking to earn high yield and safe returns, please contact us right away. The stock market is dropping dramatically, reducing most portfolios by over 35% this year alone. Get out now while you still have a portfolio and hedge against further losses.

If you are currently wanting to use private funds and need assistance on accomplishing this, please contact us as well. We can answer your questions, get you started, and keep you within the legal aspects of this venture.

Nationwide Property Investments, LLC is a Real Estate Investment Company, investing in nearly every aspect of real estate. They educate others and bringing sound investment opportunities to their investors. Join the investor list at www.nationwidepropertyinvestments.com as well as their "members only" opportunity.

We now have our real estate investment system in Las Vegas, NV ready for our investors. This is a new and innovative program Nationwide Property Investments, LLC has developed for their investors. You can pick an area, pick the size, pick your price points, and pick all your criteria, then we go get it for you at extreme discounts and in many cases, for less than you could buy at REO listings. You NEVER pay more than your max price point and the property must meet all the criteria before we buy it.

This system has proven to be a valuable asset to a select number of original participants and is now available to ALL of our investors. Join our investor list on our website and email us the criteria and specifications you are interested in. This system is in place in other areas as well, so contact us with your questions or criteria.

We have the entire team in place including, but not limited to, lenders, property management, appraisers, title companies, handyman services, contractors, other service providers, and home inspectors.

www.nationwidepropertyinvestments.com or call 800-469-2260

WHAT IS THE CORPORATE VEIL AND HOW CAN IT BE PROTECTED?

Written by KKO Lawyers

One of the primary advantages of forming an entity for your business is that the business owners are not held personally liable for the debts or liabilities of the company. In other word, creditors can only pursue the entity's assets and cannot reach the assets of the business owner. That line of protection, which separates the company's liabilities from the business owner's personal assets, is commonly known as the "Corporate Veil". Under some circumstances, if the owner does not follow the proper procedures, a creditor can pierce the "Corporate Veil" and reach the personal assets of the business owner.

While the law may differ slightly from state to state, there are a few common ways in which a business owner can lose the protection of the Corporate Veil.

1. ALTER EGO The most common way that the Corporate Veil is pierced is when the business owner is considered the "alter ego" of the company. This typically occurs where the company ignores the corporate formalities such that it is not recognized and treated as a separate entity by its owner. A short list of the formalities that should be followed are listed on page two of this Newsletter along with a list of recommended procedures.

2. FRAUD The second most common way in which the Corporate Veil is pierced occurs when a business owner commits fraud. This could be as simple as forming an entity, and then insuring liability in the name of the Company with no intention of repaying those liabilities. The business owner cannot rely on the protection of the Corporate Veil as a way to avoid payment for the liability.

The main principle here is that you cannot use the Corporate Veil to shield liabilities which you never intended on repaying. If ever litigated, the court may simply see the judgment creditor as being defrauded by the company.

3. GROSS NEGLIGENCE Another common way in which the Corporate Veil can be pierced occurs when the business commits acts which are grossly negligent or reckless. Gross negligence occurs when the business intentionally fails to perform duties or commits reckless acts. Ordinary negligence can arise from simple inadvertence. However, ordinary negligence is not enough to pierce the Corporate Veil. In sum, if a plaintiff can show that the business committed reckless or crossly negligent acts then a court may allow a plaintiff or creditor to pierce the corporate veil.

STEPS TO PROTECT THE CORPORATE VEIL

There are a number of recommended procedures that should be followed to ensure that your Corporate Veil is protected. By following these recommended procedures, you do not face personal liability for the operations and liabilities within your business.

1. Maintain an active status for your business entity with the states you are authorized to do business in. This usually requires a simple filing and payment of an annual fee to the State. Failing to stay current with the State will cause your entity to become in-active or delinquent and the state will assess you additional penalty fees for not meeting your annual deadlines. Moreover, if the entity is dissolved by the state, your protection ends on that date.

2. Own your business assets (e.g. real estate) in the name of the entity and execute all contracts and legal documents in the name of the entity. This may require new deeds or updates to contracts.

3. Hold annual meetings and complete annual minutes. This is required a requirement for Corporations and while it is not required of Limited Liability Companies ("LLC") or Limited Partnerships ("LP"), most practitioners still recommend that you follow through on these formalities.

4. Create letterhead and business cards for each business operation and use them. You want it to be clear that you are acting on behalf of your company and not in an individual capacity.

5. Maintain a separate checking account for each company and don't co-mingle business assets with personal assets. Using your personal account for business activities shows complete disregard for the Corporate Veil since you are not treating the company as a separate entity from the business owner.

6. Receive business income in the name of the business and pay for business expenses out of the business bank account(s).

We are looking for official sponsors for our live radio show "Creating Wealth Through Real Estate". The show educates and informs the public on a variety of topics which relate to real estate and real estate investing. It includes retirement planning, tax planning, buying and selling techniques, and much more. We have regular guest speakers who are some of the sharpest minds in real estate.

The sponsorship would include internet advertising on both our website as well as the radio station website (the largest internet traffic commercial website in the area), commercials each week on the show, guest speakers each month, and much more.

Please contact us for details and additional information on this limited opportunity. Only one sponsor for each area of business (one realtor, one accountant, etc.) Call us at 800-469-2260 or email us at info@nationwidepropertyinvestments.com

Supreme Court Rules That Creditors May Not Seize IRA Assets in Bankruptcy Proceedings

In a huge victory for managed and self-directed IRA owners everywhere, the U.S. Supreme Court ruled last week that IRAs receive Federal Creditor Protection. This means that creditors cannot seize assets in an Individual Retirement Account.

The Supreme Court ruled unanimously that IRAs should join pensions, 401(k)s, Social Security and other benefits tied to age, illness or disability, that are afforded protection under federal bankruptcy law and thus shielded from creditors in bankruptcy proceedings.

Until recently, IRA protection was covered by state laws, which varied to a great extent on coverage provided. This ambiguity led to a great deal of confusion and uncertainty for IRA owners wondering how their assets were protected from creditors.

The case before the Supreme Court was heard because of a lower court ruling against IRA protection based on the faulty notion that since investors can make IRA withdrawals at any time, IRAs are similar to savings accounts, which are unprotected from creditors under bankruptcy law.

Justice Clarence Thomas, writing for the Court, said a bankrupt Arkansas couple was entitled to keep more than $55,000 in retirement savings from creditors. He reasoned that IRAs are benefits tied to a person's age under the federal statute because a tax penalty is imposed if a person makes withdrawals before age 60.

Interestingly enough, the court did not choose to address the topic of whether very large IRA accounts would be protected under the federal bankruptcy code. The code has a provision stating that certain assets (such as retirement plans) that are deemed to be "reasonably necessary" to support a debtor and his/her family are protected from creditors.

The uncertainty of what is "reasonably necessary" means some assets in extremely large IRAs might not be protected. Having said that, this issue will surely be brought to the court's attention in the future. However, for the time being, the vast majority of Americans will not have to worry about creditor attachment of their IRAs.

The ruling comes at a time when IRA assets are set to reach the $3 TRILLION mark and, for many Americans, the IRA has become their most significant retirement asset. Having the same protection in bankruptcy that workers receive for their 401(k) plans and company pensions shields a nest egg relied upon by millions of Americans and provides another layer of financial protection.

October 17, 2008

"“How The Economy Is Affecting Real Estate Investors”
By: J. Scott Scheel

Lately, we have been hearing about the need for the financial industry bailout, that the US is in a recession, and that times are tough.

The reality is that what is happening in the financial industry today is really not any different from what was happening in the 1980’s. Commercial interest rates ranged between 8-9%, banks were merging everyday, and everyone was worried about how they would get their next loan funded.

The real problem facing America is the devaluation of the dollar and the increased costs of energy. What most people do not realize is that these factors can affect us as real estate investors in many ways.

Increased Operating Costs
First and probably the most obvious way we are affected is through increased costs. Real estate investors have felt the pain of increased costs to operate their properties over the last several years.

Heating costs have tripled over the last five years and crude oil has gone from $25.00 a barrel in 2003 to $146 a barrel in June of 2008, and has now settled to around $110 a barrel in September of 2008.

Oil is used in so many aspects of our lives from transportation, to manufacturing, to heating, so it is easy to see why living expenses have increased so substantially.

This, in conjunction with the devaluation of the dollar, has also increased the cost of operations.

We have seen these increased costs affect utility costs. It has affected our costs for repairs and maintenance since construction material costs have increased along with the cost to transport the goods. Finally, our overall supplies and office expenses have increased.

These increased costs have affected the bottom line, decreased our cash flow from operations, and decreased the value of our properties.

Since the value of the dollar has dropped, Americans can now buy less overseas than they used to be able to. In 2005, the Euro was worth $1.22 according to the Federal Reserve.

This summer the Euro was worth $1.58. This means there was a 28% increase in all merchandise manufactured in Europe and sold in the United States. In other words, if you went to Europe, it would cost you 28% more money than it did in 2005. However, it would be a 28% savings for Europeans buying US-made goods and products.

Fewer Traditional Funds Available to Borrow
With the decreased value of the US dollar, investors who used to invest their cash in the United States have switched their investment preference. Scarcity of funds means that just getting a loan will be more difficult and rates will be higher. The banks will be lending to only the best of the best prospects.

More foreign investors will invest in US assets. They will be able to get more for their money here since the Euro and the Yen will have more buying power. The scarcity of funds will also force some lenders to leave the real estate market all together.

Changes to Bank Loan Terms
Another potential issue is that lenders may shy away from any sort of fixed-rate loan in an effort to hedge against any changes in interest rates.

The banks do not want to find themselves in a situation where they are paying investors 9% for their funds, but have long-term loans funding real estate deals locked in at 6-6.5%. We will see lenders offering variable rate loans and starting at a little higher interest so the banks can protect themselves from market rate fluctuations.

Lenders will also decrease the terms at which they allow real estate investors to finance the loan. They will do this as another step to hedge against changes in the rate market.

Instead of long term loans, loans will mature in three years or shorter, forcing borrowers to be sure they stay on track with their cash flow and giving the banks the flexibility to change their investment strategy if necessary.

Last, lenders will decrease the loan-to-value in what they lend. This will protect the banks from declining values on properties due to lower NOI levels and the decreased value of the dollar.

For example: Today, if they lent at an 80% LTV on a $500,000 property, they would have a $400,000 loan. If the value of the property decreased by 10 %, the new value of the property would be $450,000. Now, the bank’s LTV based on the new value would be 90% and far more risky.

Not all Doom and Gloom
Even given the above-mentioned factors, all is not doom and gloom for real estate investors. If you follow the principals that have been successful, you know there are still a lot of deals out there that are yours for the taking.

You can buy properties in this market at prices lower than you may ever seen before. Also, rates are still low, averaging in the 6.5-7.5% range through traditional banks. This means that if you are a qualified buyer, you can finance your property for low interest rates and have a lower debt payment to service.

Many lenders have adjusted rate indexes to go off of the international indexes such as LIBOR (the London Interbank Offered Rate) to make their mortgage-backed securities easier to sell on the international market.

By using the Opportunity Evaluator Software, you will have the confidence of knowing you are buying your properties correctly, not over-leveraging or overpaying for them, which will allow you to withstand the changes in the current market place.

The above article was written by Scott Scheel who is a trusted advisor on Nationwide Property Investments' team of professionals. He specializes in commercial real estate investments and some of the strategies and techniques we use today were taught to us by Mr. Scheel.