Baltimore’s Pennsylvania Avenue now a state-designated black arts and entertainment district

Baltimore’s Pennsylvania Avenue now a state-designated black arts and entertainment district

If you have an economic, familial, and/or cultural interest in Baltimore, below is some major news about west Baltimore that may be of particular interest to you:

Maryland Designates “Pennsylvania Avenue Black Arts & Entertainment District” in West Baltimore
Here’s the official announcement from the State of Maryland:

To better understand the potentially transformative impact of such a district to West Baltimore, I’ll leave you some examples from the DMV and Baltimore City to consider:
DMVGateway Arts District: Spring Arts District:
U Street, NW DC Corridor:

BALTIMOREStation North Arts & Entertainment District:
Bromo Tower Arts & Entertainment District:

4 REI Scams To Avoid

4 REI Scams To Avoid

by Tod Snodgrass

History is replete with (in)famous real estate scams. In the 1920s in Florida for example, charlatans sold millions of dollars worth of swamp land that was literally under water and basically worthless. Today, the scams are normally more sophisticated, but can still be very damaging to your wallet. Real estate transactions, and particularly those involving Real Estate Investors (REIers), are inherently complex. What follows are four problematic areas to beware of and cautious about.

A. Letter of Credit (LOC)

Recently, a new crop of scammers have been peddling LOCs for use as collateral for the purchase of real estate. The problem is that legitimate LOCs are normally not sold, offered as investments, or used as collateral. Real LOCs are typically issued by banks to ensure payment for goods shipped in connection with international trade, and have no connection to real estate investments. LOC frauds can occur when a con artist offers a “Letter Of Credit” or “bank guarantee” as collateral for a property purchase.  NOTE: Equally useless, to REIers, are SBLCs (Stand By Letters of Credit). FYI: Many of these frauds stem from supposed overseas financial institutions or governmental agencies. Smart REIers should be careful with LOCs/SBLOCs, especially if they are being used as collateral for real estate deals.  

B. Realtor Assigning a Sale to Themselves

This can occur when a shady realtor takes advantage of a real estate investment buyer. For example, after the purchase contract is signed by all parties, but before the deal closes, the buyer experiences some form of financial distress. The buying broker coerces the buyer into assigning the deal to her for a substantially discounted price, because the buying broker has convinced the buyer that he would have difficulty keeping the financing from the bank (due to his recent financial reverses). If in doubt, you should consult legal counsel about how to handle the above problem. The good news is that the vast majority of realtors are straight shooters and would never engage in such questionable behavior.

C. Forfeited earnest money deposit funds

The danger for inexperienced REIers is that there are a few shady characters in this business who take advantage of naïve REI buyers as regards the refundability of earnest money deposit monies. And in that regard, it is a form of scamming. To buy real estate, most purchase contracts contain verbiage which requires you to provide an earnest money deposit into escrow, typically equivalent to 1%-3% of the purchase price. Assuming escrow closes OK, the earnest money is usually applied towards the purchase price of the property. However, if the buyer pulls out of the deal for a reason that isn’t allowed under the contract, they forfeit the deposit. Every year, by some estimates, buyers lose millions of dollars in forfeited deposit money because they did not understand the fine print. The way for REIers to avoid forfeiting deposit money is to include verbiage in your initial offer that protects you from such a potential negative outcome. Consult a real estate attorney for advice if you have any doubt at all about an offer you are about to make.

D. Fraudulent Wire Transfers

Real estate con men and/or hackers have been known to target realtors, closing attorneys and escrow providers. The scam often begins with what appears to be a legitimate email communication from a party involved in a current real estate transaction, touching on the subject of wire transfer instructions, i.e. which account to send the funds to. What you and others do not know is that a con artist has hacked into the email account; he has watched the email traffic and eventually sends an instruction to wire the funds to his (illicit) account rather than the actual valid account. Once the funds are successfully wired to the illicit account, the criminal tests the transaction, by sending a token percentage (of the total amount of money), via a wire transfer to another bank in which the fraudster has a second illicit account. If the small amount transfers successfully, the remaining balance of funds are then transferred to the other bank. Usually 100% of the illicitly transferred money disappears within a day or two. To counter such scams, a process needs to be set up to prevent such problems from occurring in the first place:

1. If wire transfer instructions are to be emailed, be sure the wiring info is NOT in the body of the email itself, but instead should be included inside of a PDF, as an attachment to the email.

2. Use a password provided via USPS, over the telephone or in person.  

3. Before wiring the funds, first call the legitimate potential recipient and confirm the wiring instruction(s) information via telephone.

What We Do: Quickly provide short-term, first position, private capital funding, in smaller amounts, on a cash-on-cash investment basis, to real estate investors.

Contact info: Tod Snodgrass,, 310-408-7015

NOTE:  If you are receiving this article by mistake and/or you do not wish to receive any more articles, etc., then please do the following… in the subject line…please type in: UNSUBSCRIBE + your email address…hit the send button, and you will be immediately removed from all future emailings from us.

Time to Shift Investment Gears?

Time to Shift Investment Gears?

by Tod Snodgrass

Those who cannot remember the past are condemned to repeat it.

–George Santayana

Whether you are a relatively experienced real estate investor (REIer), or provide services/products to the investor-related real estate trade, let’s face it: we are all in the same boat. When the larger REI universe prospers or falters, our individual boats rise or fall on the same financial tide. And right now, the REI tides over the next couple of years do not look that favorable. Many financial indicators are showing that the real estate market is slowly turning south. The next downturn will hopefully not be as draconian as what we all went through in 2007-2010, but it is always wise to prepare for  the worst, wish for the best, and hopefully we all come out of this in fairly decent shape.

Some of the hallmarks of the RE downturn of a decade ago was the access to easy money; that tended to inflate housing prices. Many REIers leveraged themselves to the point of being overextended. Then when the market turned down, they found themselves in a very vulnerable financial position. Rehabbers often wound up stuck with properties they couldn’t sell (for lack of buyers). Landlords suffered because when tenants lose their jobs, they often cannot afford to pay rent. Flippers were afraid to make offers because they didn’t know if the prices were going to keep dropping over time—and they often did.  

This doesn’t mean you should stop doing what you like to do best: REIing. Far from it. What this is about is reducing risk as much as possible, while still engaging the market as an active investor. What follows are some strategic concepts and tactical ideas for weathering the gathering storm. Accept the best, reject the rest.

1. OPM. Decrease how much of your own money you can/will commit to deals, and increase the use of OPM (Other People’s Money). As the old saying goes, Cash is King. Start thinking about holding your own cash back as a rainy day reserve, i.e. for emergencies. OPM can include: private debt or private equity; Joint Venture deals; “Subject to” funding; seller financing; seek out investor-friendly sources  who will provide 100% of your flip funding needs.

2. Deleverage. During normal times, it is wise to leverage as much as you can to maximize ROI yields. However, if and when the market does turn, you might want to give serious consideration to reducing or even eliminating (most or all of your) investment-related debt. Deleveraging can include: selling off assets for cash; bringing in an equity partner to pay off any debt. Another idea: Consolidate from multiple properties with debt on each one, to fewer properties with no debt on any of them. In this way,  you will wind up with no debt that the bank can hold over your head. If needed, when you have no bank debt, you can even temporarily reduce your rental rates, in order to keep good tenants, then raise them down the road when the economy improves.

3. Pursue lower LTVs. Shift from 65%-75% vs. 30%-35% LTVs. Put greater bid emphasis on properties where the owner is DMF: Distressed, Motivated and Flexible. These are usually off-market (not on the MLS) properties where the owner is facing obvious and serious problems such as: in pre-foreclosure, clouded title (tax liens, law suit/lis pendens, probate, etc.), divorce, job loss, disability, etc. Find lower LTV/DMF properties using: bird dogs/property scouts; “driving for dollars” looking for run down properties; “dialing for dollars” (answer ads that use wording such as “fixer upper: or “needs TLC”), etc.; seek out investor-friendly realtors who send you their “back pocket”, low-LTV property listings.

4. Offer an equity incentive. If you need to sweeten the pot to get say, a DMF homeowner to sell you their property, offer them some of your future (backside) profit (once you have successfully sold their property), in exchange for a “front side” discount now. FYI: This of course assumes the homeowner still has enough equity remaining in their property to make it worth your while to invest in their property in the first place.

5. Switch from fix/flip to straight wholesale contract flips. They take less time, you make your profit faster, they reduce your risk, and you can do more deals in a shorter period of time.

6. Reverse flipping. Instead of putting a property under contract, and then trying to find a buyer for same, the process is reversed: First you find the end buyer, then fill their request with a property that you go out and find, and put under contract. Think of it as pre-selling.


During a looming real estate downturn, the key is risk management. In this case, you may want to consider trading some potential upside profit in order to reduce downside risk. Each deal is unique. While it is obviously impossible to remove all risk, it is possible to reduce it substantially via calculated and well thought out strategic and tactical techniques. Good Hunting!  

What We Do: Quickly provide short-term, first position, private capital funding, in smaller amounts, on a cash-on-cash investment basis, to real estate investors.

Contact info: Tod Snodgrass,, 310-408-7015

In Shutdown? In DC? Want Lunch and Convo? Read This!

In Shutdown? In DC? Want Lunch and Convo? Read This!

One of my good associates sent me the enclosed invitation to a potluck for those who are impacted by the government shutdown. 

In times like these, we need community – unity – conversation, laughter, and it is always good to add food to the mix.  This is an opportunity to sit down with other “fellas-in-a-ship.”  (In church we call it FELLOWSHIP.)  LOL!

I am looking at my schedule to determine if I will be free to join and bring a dish.  Forward this post to all that you believe may have been affected.

LGBT Clergy?

LGBT Clergy?

When I first heard about LGBT Clergy, I was floored and thought. “May it not be so.” Then, I met a fair amount of local clerics who either identify as LGBT or are in extreme support. Some were in the pews. Some where in small gatherings.

As a recovering “Super Pentecostal”, I was raised with more than fire and brimstone – exorcisms (“casting out devils”), speaking in tongues and the like. While I do enjoy a good tent revival or “Devotion Service” from time to time, my beliefs have changed a bit.

I was able to experience the Holy in quiet and contemplative services of say the Quakers to the pews of “high church.” I was astonished at the vast amounts of information I learned about our church leaders and their both public and private affirmation of the LGBT community.

I have come to believe that there are organizations that really love God as much as I do and do not hold to all of the beliefs, customs, and rituals that I grew up with. After talking with another pastor friend of mine a while ago, I understand that the following organizations are friendly to the LGBT community.

If I have any of the information incorrect, let me know. I will remove. If you have additional information to add, let me know. I will add.

WHY SHARE THIS, JONATHAN? Well, life is short. There are tons of men, women, and children that I have met over the years who are on the spectrum and want to connect with God, the Holy, Christ. Churches want to grow and identify with those that are not churched or want to reconnect. This is a community that has been overlooked, abused, and neglected.

May this be the year that this community be conned to God – Christ – again. PAX CHRISTI.

New Year Quote on Vocation

New Year Quote on Vocation

A pastor friend of mine challenged me about finding an fulfilling my Vocation. Often, most people think about this a ministry within a church. Can it be that it is something that you may be able to do outside of church?

Here is what Frederick Buechner said, “Vocation is the place where our deep gladness meets the world’s deep need.”

So, may this year be the year that your gladness needs the world’s need!

Prince George’s County Opportunity Zones Conference in Largo, MD (Nov. 7th)

Prince George’s County Opportunity Zones Conference in Largo, MD (Nov. 7th)

Good morning! In reference to the previous email message below, Prince George’s County have several designated “opportunity zones,” in which investors will receive tax breaks for investing in communities that are in need of redevelopment.

That being said, the County will host a free two hour opportunity zones conference in Largo, MD on Nov. 7th:

Prince George’s County Opportunity Zones Conference

If you’re interested, register ASAP, as space is limited!

End Game REI Advice

End Game REI Advice

by Tod Snodgrass

There are (at least) five stages of real estate investing maturation: bird dog/property scout, wholesale contract flipper, fix/flip (buy/rehab/sell), buy & hold, note holder. Not every Real Estate Investor (REIer) gets involved with all five stages.

For example, “newbies” often start out as bird dogs (property scouts) in order to learn the ropes of how to identify and qualify potential investment properties; after some success, the next logical step is to try your hand at being a wholesale contract flipper. The next step up the REI food chain are fix/flips. Here you wind up temporarily owning the property, during the time you are rehabbing it, and before selling it (hopefully for a profit). You will probably be required to bring money to the table, i.e. say 25% as “skin in the game” required by the hard money lender to be able to acquire the property.

Eventually, many REIers wind up owning rental properties, collecting rents, etc., a.k.a. “buy and hold” since it provides passive income that we all need in later life as we head towards retirement. However, after several years of acting in the capacity of a landlord, many REIers tire of the four T’s associated with rental property management: trash, tenants, taxes and termites.

Once you come to that point, you have some key decisions to make about what comes next with property you own. For example, you can undertake to do a 1031 tax free exchange. However, that means you are effectively transferring the “4 T’s” issue from one property to another. You can sell the property for all cash, but that may trigger a major tax payment to Uncle Sam and your state government.

Which brings us to the “owner financing” (or end game, note) option (assuming you have no debt on the property): You put it on the market for sale, and offer payment terms to the buyer: Good sized down payment with monthly payments spread over several years. You are essentially acting as the bank. You receive a first position note/deed; the buyer receives a grant deed to the property. Obviously before undertaking such a sale, it is strongly recommended that you enlist support and advice from professionals who can help you get the best deal possible for yourself: a realtor who is very familiar with non-owner-occupied investment properties; a real-estate savvy CPA; maybe a real estate attorney.

Two advantages of taking back a note, via owner financing, include:

1. Limit your tax liability (by undertaking to do an installment sale vs. all cash sale)

2. Maintain needed cash flow via the monthly payments from the buyer of your property

Conceivably, you can accomplish both with owner financing. For example, take the down payment (DP) amount involved. Done the right way, you very well may be able to secure a sizable DP with limited tax ramifications to yourself. This can be accomplished by carefully adjusting how much DP money you receive. You first need to start with the Adjusted Tax Basis (ATB).

The ATB is arrived at by adding up all the costs you have incurred with the property during the entire time you have owned it, less deprecation you have taken against the property. Roughly speaking, you can take a down payment from the buyer for an amount that equals the ATB (DP, payments, repairs, etc.), less deprecation.

Example: Selling price: $500,000. ATB: $200,000. Depreciation: $100,000. DP: somewhere between $100,000-$200,000. Balance the buyer owes you: $300,000 ($500,000-$200,000 DP) spread over say, 15 years at say 9.9% interest. Net result: Depending on how the numbers shake out, you may very well be able to keep a good chunk of the $200,000 down payment tax free. (NOTE: If you want to pay less in taxes, then reduce the DP and increase the amount you are financing.) Subsequently, the payments you receive (on the $300,000 note for 15 years at 9.9% interest) should equal about $3,025 per month. Yes, you will have to pay taxes on the monthly payments you receive from the buyer, but since it is spread over many years, the tax bite in any one year should not be too draconian.

Risks: It always possible that the buyer will run into trouble and quit making payments to you. Should that happen, you can always foreclose (take the property back), and sell it to someone else. NOTE: Should that occur, you get to keep all the monies he has paid you to date: the down payment and all the monthly payments he made over the years.

What happens if you need cash, sometime during the 15 year term of the note? No problem. You can sell the note at any time—possibly at a modest discount from face value—for cash if you need the money sooner.

Another advantage to offering seller financing: Potentially higher selling price. By making it easier for buyers to purchase your property, this can serve to increase the pool of available buyers, which in turn can result in a more money in your pocket.

What We Do: Quickly provide short-term, first position, private capital funding, in smaller amounts, on a cash-on-cash investment basis, to real estate investors.

Contact info: Tod Snodgrass,, 310-408-7015

Reminder: Everything You Need To Vote in Two Weeks (Re: Flexing our political muscle in 2018)

Reminder: Everything You Need To Vote in Two Weeks (Re: Flexing our political muscle in 2018)

Great Tuesday!  Two weeks from today is Election Day, when you’ll be afforded the opportunity to flex your political muscle in this critically important election year.   However, in some states, you now have the option to vote early!
As a friendly reminder, listed below are several resources that you (and/or those you know) can use to register to vote, confirm your registration status, obtain IDs (if you live in a voter ID state), report problems encountered while trying to vote, etc:
Election Protection – 866 OUR VOTE (Purpose: Identifies & removes roadblocks that prevent people from voting at the polls)
Election Protection Telephone Hotline: (866) 687-8683
Early Voting Calendar (Purpose: Find out which states offer early voting, and when) – From League of Women Voters (Purpose: “One stop shop” source of election related information)
Natl Voter Registration Day (Purpose: Update your registration – change in marital status, change in address, turned 18 yrs old)


Campus Vote Project – State Student Guides (Purpose: State-specific voting/elections info for college students) (Purpose: Access to state specific guides to verify your voter registration status, request an absentee ballot, determine polling place location, etc.)
Spread The Vote (Purpose: Obtain govt issued photo IDs for eligible voters)
VoteRiders (Purpose: Offer free voter ID info, help citizens get IDs to vote – especially in states with stringent voter ID laws)