All Forum Posts by: Kathy Fettke

@Anthony Rosa I was thinking that owning rentals in B neighborhoods would be a safer bet. Those who live in A class properties may have to downsize to something more affordable, and those in C class will either move in with family or be able to move up as B class becomes more affordable. During the 2008 recession, Real Wealth Network helped people sell bubble property in CA and exchange it for cash flow properties in Dallas. Those investors didn't even feel the recession because they received so much cash flow from people who were forced to rent after losing their homes. Rich and I bought 9 homes and the rents stayed high. And we were even highly leveraged on those, but the cash flow more than covered expenses. It was the CA homes I kept that took me down... plus a couple in Boise and TN that didn't stay rented -not enough diversification of employer and not enough cash flow

@Alan Lacey I hope you're right. My sources at the Fed have told me they are actually not sure how to deal with it. $75B a day is a lot of money....

@Scott Mac When the Federal Reserve is creating and injecting $75B per day to keep banks liquid, that is concerning. This is not being covered in mainstream media and quite frankly, my inside sources tell me high level people at the Fed do not know how to solve it.

I'm taking as much money as I can out of banks and into gold but also buying cash flow properties in B neighborhoods in solid job growth markets. Those who think the economy is the strongest ever (in spite of $1 trillion annual deficit) should look at basic accounting practices.

The economy seems to be on fragile ground based on this "unexposed" information about the Fed repo. How are you preparing for a potential downturn?

Bottomline:  If there was fraud, he should go to jail. Absolutely. Sadly, this doesn't mean the investors will get their money back. 

But... did he knowingly do it? Or did his partner defraud him? 

Maybe I'm in denial, because it's still so hard for me to believe that someone with so much potential would be willing to commit fraud and somehow think he could get away with it - especially when he is so high profile and could have made a fortune doing the right thing. I guess I am still just hoping he was naive, inexperienced and maybe careless, not evil. We shall soon find out.

God knows I lost lots of money being naive, trusting and inexperienced in the past. I've spent the last 16 years trying to educate myself and others on how to protect ourselves when buying property, whether it's turnkey or otherwise. There are such SIMPLE steps to take!

When I started, there wasn't much help out there for me. I had to figure it out the hard way. It's amazing to me that today, with all the info available on the internet and here on BP, that some people still take their hard earned PRECIOUS RETIREMENT INCOME and throw it at some stranger. 

I prefer to think like other countries do - that if you're that careless, you'll just have to pay the price and get back to work - hopefully armed with a little more awareness of how the world works. That's what I've done (like moving on and forgiving myself for losing $150K on that condo in Nicaragua that never got built... I guess I shouldn't have signed the contract after having 2 drinks. lol)

I would speak with an asset protection attorney. Some have told me it's OK to transfer title to an LLC. Others have told me to first transfer it into a land trust. And the biggest concern is that some lenders have "due on sale" clauses so transferring to an LLC might look like a sale. Of the thousands of landlords I know, I've never seen this happen, but it could...

In the meantime, be sure you have really good liability insurance and maybe an umbrella policy.

I have close friends who Airbnb in Encinitas. They actually made quite a lot of money. But laws are getting stricter. In LA, you can only Airbnb rooms in a house you live in. Be sure the property makes sense as a longterm or 30 day rental in case you can't do short-term.

I have serious FOMO. I love all these speakers. Hope to see you there next year!

I had Clayton on my podcast years ago and was shocked that he was selling properties in the hood. I'd been down that road and knew the perils of it. I asked how he was making that work as it sounded risky to me. He said it was going great. (I thought, there must be something he doesn't know quite yet...)

In 2010, a large group of Australians came to me begging for $10,000 properties that rented for $900/month, as they'd seen on TV somewhere. I told them if I could find such a thing, I would buy it too! :-) 

We ended up touring Kansas City together and met with several "turnkey" providers. One of them was a property manager in the inner city of KC. On paper, he had these kinds of returns. I warned the Aussies in a follow up email that low-income, high crime areas were not recommended by me or RWN. They wrote back saying it was none of my business what they do... After all, the homes were so very cheap  - often less than $10,000 - what could go wrong? (Everything!)

Several bought these rentals, in spite of my advice. Not many months later, they contacted me to tell me it was a nightmare. The properties had high turnover, and every time they did a make-ready, items would get stolen. The repair costs from damage and theft were so high they begged to sell these inner-city properties. But who would buy?

They tried to blame me but I reminded them of the email I sent them. Investors really do need to take responsibility for the choices they make. They can sue all day long, but in the end, they won't get their money back in most cases. Does Clayton have insurance? I doubt it. While he should have been on top of the situation, so should the investors. Did they visit the properties, perform inspections and appraisals and rent comps? They never should have paid for renovations before they were done. 

I don't mean to sound harsh, but I am quite Republican in this regard. People, especially investors, need to take responsibility for the choices they make. Many of these losses could have been avoided with property due diligence. A Fox TV host does not make someone a savvy real estate investor. 

Some consider me a "celebrity" too but this doesn't mean that just because I recommend something, investors shouldn't also do their proper due diligence. A guy bought some crappy properties through a provider we no longer work with. He failed to visit the property, get inspections or appraisals. He didn't do any investigation at all. And when things didn't work out, he wanted to blame me. I didn't even know he bought them! He never asked for my advice. We were never paid any kind of referral fee.

I hate seeing investors lose money. I have lost money from trusting the wrong people, and it stinks. But I never blamed anyone but myself.

I'm looking forward to seeing you all!