Success in business is based on principles and formulas

To be able to succeed in business first of all you must align three areas:

1)        What you know about yourself, others and the specific subject matter at hand

2)        How you feel about what you know, about yourself, about others and the subject matter

3)        How you act about that knowledge and feeling in a way that elicits the best reaction and results from others and produces the best outcome with the subject matter.

A simple business conversation or negotiation could turn sour in a split second if you express yourself in the wrong way because you knew or felt that the other person was lying.

A more effective way may be to act as if you believe the person, so as not to expose them and use the information you know to get to know them better and get them to cooperate.

If you cannot control your mind and emotions, you will act against your best interest.

But I see that quite often people have a hard time thinking on the spot when the action is happening. They wish things would slow down so they can sit, think, reflect and analyze their feelings about it. They do not know when and where to draw the hard line and when and what issues to compromise about. 

So how can we train ourselves to think faster, better, with more intensity, about many subjects that come at us in all directions, unpredictably and unmercifully with demands for immediate decisions?

The answer is simple:

1)        Train yourself to observe what is happening and analyze the facts and figures

2)        Then communicate more with the people involved and ask direct questions to evaluate the answers and predict the behavior of those involved

If you have already done your homework and came up with the principles of success in your type of business endeavor then you will know the formulas and proven methods that bring about the desired outcome you want. You will also know the type of people you need to have that can help you get the business venture up and running successfully.

Having workable proven formulas is a crucial element to your survival and prosperity. You cannot be trying to think anew each time you are faced with a challenge.    

Wishing better and faster decisions in your business.

Cherif Medawar

www.CMREI.com

Blog 2 of 2 - The way we think and how it affects us

In Blog 1 in “The way we think and how it affects us” I described how we process information as events occur in our lives. I also explained how based on how we interpret (give meaning) to certain occurrences we make decisions to help us, survive and prosper.

Based on the results of our decisions, we either feel more confident of how we understand the world around us or we feel lost and overwhelmed by our poor analysis and interpretation of future events, and we end up slower and more cautious to a point of paralysis by analysis.

With all what I just described in my previous blog and recapped above, I want you to just imagine how the world seems so overwhelming to a child who barely can define words, let alone understand the concepts of what is happening around him or her to process a few possible impact scenarios and the consequences of each on their weak life that is so dependent on others.

Now think also of almost the same process happening to an elderly or a sick person whose mental faculties have slowed down due to age and/or sickness or have been damaged due to a physical accident or an emotional traumatic incident.

You can also think of anyone who is under a huge amount of stress or any factors that can affect their understanding such as language barrier, fear, stress, hunger, tiredness, exhaustion and so on and you could see how many people have a hard time processing accurately what is happening and deciding in a timely fashion on the best course for action. Hence the emotional outbursts and strange reactions or over-reactions we encounter with others. It is often based on giving the wrong meaning to what is happening.     

Finally think of those who look and behave like normal people. They are under no special kind of undue stress but they actually find it hard to communicate with others because “how we think” is a bit overwhelming to them.

They prefer to interact with machines or innate subjects, where the communication is in form of direct and conscious command: From the basics of activities such as turning on the lights to more complex commands like programming computer software and the like.

The functions require much less human effort and interaction and that’s their comfort zone. It gets overwhelming for them to try to communicate with other human beings where there a lot more to process, understands and there are actual and there is constant interaction and feedback to consider and adjust to.

For instance when we communicate with other human being we must observe their facial expressions, emotional reactions, voice intonations, body language and so on.

This process could be overwhelming for those introverts and the impact is they usually do not do well in life, or in investments.

They fit perfectly however in a large business organization where they place them in a box to do specific functions that evolve in a pace they can keep up with.

Knowing your own natural talent, inclinations and comfort zone will help you focus on developing and nurturing your skills more powerfully. The most important thing is to make a choice to reach for your maximum potential.

Then know others by recognizing their God given talent, so you can place them in positions where they can build and nurture the skills set that is aligned with their natural abilities. But make sure they have made the decision to constantly improve. Otherwise you will waste your time and frustrate your self and others. 

It all starts with the mind and how we think so we can be, do and have what we deserve and are willing to work smart and hard towards.

Wishing you a clearer understanding of life and better living based on self-analysis and the accurate evaluation of the world around you.

Sincerely,

Cherif Medawar

www.CMREI.com

Blog 1 of 2 - The way we think and how it affects us

The process of thinking, one could say, is divided into three time frames: Past- Present and Future.

In the present time when something occurs we pause and answer three specific questions to ourselves in sequence:

1)        What is happening?

2)        What does it mean?

3)        What should I do about it?

Different people give different meanings to the same occurrence. People process the events based on their emotions, past experiences (good or bad) and other influences.

When we think about a past event, we refer to the same set of questions but use a comparable frame of mind:

1) What I thought happened?

2) What did it mean then? (The meaning I gave it)

3) What did I do about it? (Based on my interpretations)

And then we compare it to:

1) What really happened? (Based on new evidence)

2) What was the real meaning? (Based on better understanding)

3) What could we have done better about it?

(In comparison to what I did and the result I got vs what I should’ve gotten if I processed the information more accurately)

The gap between both serves as a way to give us doubt about our abilities to understand and act or serves as a reinforcement that builds confidence on how intelligence and success in choosing the right course of action.

 

When we think about the future or plan for it we also refer to the same questions but we pull on our past experiences to be more effective:

1)        What could or should happen?

2)        What would that mean? (Based on a possible outcomes)

3)        What could I do now to make it happen and/or what should I do to prevent it from happening

The idea however is not only to process the data accurately but to give it the right meaning so as to not have it affect us in the future negatively since we desperately look for meanings in every single thing that happens around us.

With all what I just described above, I want you to just imagine how the world seems so overwhelming to a child who barely can define words, let alone understand the concepts of what is happening around him or her to process a few possible impact scenarios and the consequences of each on their weak life that is so dependent on others.

Now think also of almost the same process happening to an elderly or a sick person whose mental faculties have slowed down due to age and/or sickness or have been damaged due to a physical accident or an emotional incident.

Finally think of those who look and behave like normal people but they actually find it hard to communicate with others because “how we think” is a bit overwhelming to them.

They prefer to interact with machines or innate subjects, where the communication is in form of direct and conscious command: From the basics of activities such as turning on the lights to more complex commands like programming computer software and the like.

The functions require much less human effort and interaction and that’s their comfort zone. It gets overwhelming for them to try to communicate with other human beings where there a lot more to process, understands and there are actual and there is constant interaction and feedback to consider and adjust to.

For instance when we communicate with other human being we must observe their facial expressions, emotional reactions, voice intonations, body language and so on.

This process could be overwhelming for those introverts and the impact is they usually do not do well in life, or in investments.

They fit perfectly however in a large business organization where they place them in a box to do specific functions that evolve in a pace they can keep up with.

Knowing your own natural talent, inclinations and comfort zone will help you focus on developing and nurturing your skills more powerfully. The most important thing is to make a choice to reach for your maximum potential.

Then know others by recognizing their God given talent, so you can place them in positions where they can build and nurture the skills set that is aligned with their natural abilities. But make sure they have made the decision to constantly improve. Otherwise you will waste your time and frustrate your self and others. 

It all starts with the mind and how we think so we can be, do and have what we deserve and are willing to work smart and hard towards.

Wishing you a clearer understanding of life and better living based on self-analysis and the accurate evaluation of the world around you.

Sincerely,

Cherif Medawar

www.CMREI.com

Twelve (12) steps to financial freedom

Twelve (12) steps to financial freedom

1) Education (academic- professional - financial) 

2) Work for a corporation that has a good structure and proven success 

THE JOB (you work for the money)

3) Savings programs: SDIRA or SDRIRA and 401k etc.

4) Build credit (personal and a c corp. in NV)

5) Learn how to avoid taxes (Type of activities, location, entity, activity, Deferral vs. Avoidance)

THE COMPOUNDING EFFECT

6) Get into residential RE flipping (buy- improve - sell) improve property through rehab or expansion or terms such as seller financing and creative ways to get in and get out

THE BUSINESS (you work the money)

7) Get into commercial RE (buy- improve - sell or refinance) improve value through cash flow (Have assets perform for you

THE INVESTMENT (The money works for you through assets that pay you)

8) Get Privacy (LLC - C Corp. and trust entities) - 

Protection (umbrella and life insurance) added debt- 

Plan for Probate (estate Planning involves writing a will and controlling disbursements through a Trust)

PROTECTION

9) Learn securities for added cash flow (stocks- options etc)

GROWTH

10) Set up a business to manage everything from a distance - using a system, automate it, scale it and prepare to sell it

Freedom

11) Give back though training and contributing to good causes

CONTRIBUTION

12) Have faith and always stay free: healthy, wealthy, wise and ethical

SET an Example

Wishing you much success,

Cherif Medawar

www.CMREI.com

A Checklist for business relationships

A checklist for business relationships

In the course of doing business you may create strategic relationships with people that can help you. These relationships vary from associates, to partners to outside counsel and so on.

It is not what we know about these people that counts most, it is rather what we are willing to learn about them on an on going basis.

When it comes to the people you deal with, you must keep your observational skills sharp and your mind alert to see any inconsistencies or incongruent signs between what they think, say, feel and do.

When you are aware of the possible shortcomings in a business relationship, you can plan ahead and strategize wisely. If they are good people, but weak in some areas, you could probably find ways to complement or compensate for each other. But if they are bad at the core, you want to be ahead of the game so you don’t end up entangled in a bad business relationship with an incompetent, disloyal or unethical person.  

It is always best to set the right expectations and clarifications of duties and responsibilities in writing from the beginning so all parties can quickly pass the argument stage and reach agreement so good performance and results could quickly become the norm:

I created a checklist of items be aware of especially in the early stages of a business relationship. They are basic human weaknesses that we must be aware of:

1)        The ego factor: People want to see themselves as successful, respected, influential individuals. They want to see others recognize them for their intelligence, contribution and importance. But some people’s ego is so big, it clouds their decision making. Others are so afraid to appear like fools that they stay quite and distant even in crucial situations that require for them to express themselves.  

2)        The jealousy factor: Are they trying to be like you (stealing your ideas, by passing you, taking credit, planning to compete?) or are they cooperating with you? Do they see their role as adding value or want to take from you and succeed alone.

3)        Conflict of interest: In most business relationships, there could be a conflict of interest as you deal with others in the same field and line of business.

4)        Their state of mind: Are they clear at this time and focused with you on what needs to get done, when and how? Or are they too busy and overwhelmed with their other projects? You can know that by asking them a few simple questions when you see them like: “what’s new?” and stop talking. Or: “What are you working on these days?” and listen carefully not only to what they say but how they feel about it.  If they are excited and happy you will feel the energy, if they are frustrated and upset you will sense the emotional charge.

5)        Their financial condition: You must assess where they are financially as it will affect the way they will charge you, the way they will deal with you, the way they will assess their services and it will even affect their moods towards the results that will ensue. I always say you only truly know someone when your dealings involve money. Especially losses or default or negative cash flow. Some people become unreasonable and unrealistic as well as unfair. Others become enraged. Some people shut down completely and become apathetic. You need to be prepared to deal with them if these issues come up.

6)        Their history/reputation: You need to know if they had similar business relationships with others and how they performed? How long did it last? Did their relationship grow better or has it gone sour? Did they retaliate or work things out or ignore the matter?

7)        Your history with them: If you had any history dealing with them, do not expect them to change much. We often work with people we do not like or do not trust completely but need them due to their special skills or connections etc. so we must set some clear rules in writing, supervise them and stay in control, otherwise the cost will be too much to bear.

8)        The fudge factor: The gap between what people “say” and what people actually “do” could be huge. The exaggeration of some people’s claims about what they have done in the past and can do especially in the beginning of a relationship versus what they truly deliver on could be far apart. I call that the fudge factor.

9)        The flake factor: You must watch out for early signs of incompetence, ignorance and/or unreliability. I call that the flake factor.

10)  Their background: Any legal issues? Any bankruptcies? Any lawsuits? Complaints? Health issues? Unusual beliefs?  Obsessions? Unfinished work, pending matters of vital important to them? Something important that preoccupies the majority of their time? Education? Experience? Past jobs? Family issues etc. Anything that could help you assess how they came to be who they are, their emotional reactions to people, money and projects will help you predict the future outcome of the relationship.

In summary which way do they handle your relationship?

1)        Magnify your success and enhance it?

2)        Nullify you and invalidate your thoughts, emotions and actions?

3)        Try to attack, control and dominate you?

You must pay attention to every signal, sign and clue to predict and protect your business relationships.

Wishing you the best,

Cherif Medawar

www.CMREI.com

BLOG 5 of 5 – Non Performing Notes – STRATEGIZE

STRATEGIZE to profit from Non-Performing Notes:

This is Blog 5 of the FACTS system that I created for Non-Performing Notes. This Blog clarifies the S part to “Strategize to profit”:

If you have performed the due diligence process in a timely manner and bought a list of non-performing mortgage notes from a bank, there are several options you have to be able to profit:

1)        You can foreclose and evict borrower

2)        You can assist the borrower to be able to refinance

3)        You can resell the Note for profit

4)        You can partner up with an attorney that would foreclose and pay you off at a later date when he/she resells it

5)        Do a deed transfer in lieu of foreclosure with the borrower (cash for keys)

6)        You can work with the borrower to list and sell his/her property and accept a short sale that you approve based on the amount you want (remember you are the lender and you bought the note at a discount)

7)        You can modify the loan for the borrower to make payments that are affordable

8)        You can modify then sell a partial (meaning sell a few years of income from the note then it reverts back to you for the rest of the years)

9)        You can create an equity share opportunity with the borrower- where you can have them make lower payments for a few years in exchange of a percentage of equity on the resale)

10)    You can syndicate the loan (sell the loan to a group of investors based on a work out payments you make with the borrower or based on a pay off when you resell the note or the property)

Wishing you the best investing. There is nothing like case studies and actual practice in the investment world.

Contact my office for live training, coaching and mentorship programs in Non-Performing Notes.

Sincerely,

Cherif Medawar

www.CMREI.com  

BLOG 4 of 5 – Non Performing Notes - TIME (Due diligence and Closing)

TIME the process of Due Diligence and Close on a list of Non-Performing Notes:

This is Blog 4 of the FACTS system that I created for Non-Performing Notes. This Blog clarifies the T part to “Time the process” of due diligence and closing:

You have 45 days to complete the following checklist for the due diligence work you must perform before purchasing the Notes:

a)      Get a copy of the actual loan and note terms documents executed by the parties to review it

b)     Verify the original loan amount versus the balance and actual repayment terms of the note

c)   Check the value of the property based on comps and send a broker to get you a BPO  (Broker price opinion)

d)      Check with the Bank (Assignor of the note) to see how many payments were made and  when the default started and finally when the next payment is due

e)        Verify that the First Lien position you are buying is insurable.

f)           Get a copy of the existing mortgagee/lenders title insurance policy that was issued  probably when the loan was originated. 


g)      Verify the property tax status and if there are any impound escrow funds for tax and fire hazard insurance premiums that will be transferred to you

h)       Check on the credit and background of the Borrower in default to assess the possibility of a loan work out.

i)     Talk to the Bank and find out if they are flexible on the price based on your assessment of value.

This process could be performed by an office of qualified attorneys, but you must know and verify for yourself the above key points or you could easily overpay for a note and/or get into trouble trying to make profit using non-performing mortgage notes.

Wishing you great investing

Cherif Medawar

www.CMREI.com

BLOG 3 of 5 – Non-Performing Notes - CONTROL

This is Blog 3 of the FACTS system that I created for Non-Performing Notes. This Blog clarifies the C part to “CONTROL the process” of selecting and negotiating the contract to Buy the list from the bank:

The bank usually follows specific steps to sell the non-performing mortgage notes that they have.

Here is a checklist to follow and control the process of buying non-performing mortgage notes: (Analyzing non-performing notes is a separate blog)

1.          Show proof of funds for a specific gross amount that you will buy at a discount (Could be as low as 20 to 30 cents on the dollar- it depends on amount purchased- volume of notes and bank relationship)

2.          Bank usually gives you the list of non-performing notes with a UPB column (the UPB is the unpaid balance amount) that you need to confirm

3.          If you are buying in bulk, the bank usually gives you approx. 45 days to do a due diligence (see blog about Timing the due diligence)

4.          If you are satisfied with the due diligence, get the actual mortgage (or trust deed) security instrument assigned over to you or your entity.

5.          The assignment, once executed and recorded, will transfer all rights, title, and interest in the instrument to you; the assignee. (If bank had started the process of foreclosure, it may work to your advantage in saving you time and money as well as creating a sense of urgency and better response from the defaulted Borrower)

6.          Make sure you have physical possession of the original promissory note instrument and it is endorsed over to you or your entity. (This is the negotiable instrument you are purchasing and whose rights you will be able to enforce for non-payment of the debt).

7.          Make certain that the assignment of the security instrument and the endorsement of the note matches one another. (The endorsement can take place right on the actual original promissory note instrument).

8.          You may want to obtain an estoppel affidavit from the Bank/Assignor. They will affirm for you the actual balance and terms of the note and this might be useful in a later dispute with the debtor.

9.          Send notification letters to the defaulted borrower and the fire hazard insurance agent to notify them of the transfer of the note account. (These are often referred to as so called "goodbye," "welcome," and change of loss payee letters).

Now you are in CONTROL on the Non-Performing Note and the collateral real estate asset backing it up.  Start by offering the bank 20 cents on the dollar. I paid as much as 50 cents on the dollar for good Non-Performing Notes and as high as 85 cents on the dollar for Performing Notes. The goal is to get the Non Performing notes less than 30 cents on the dollar (The “dollar” being current value).  It is all based on UPB vs market value.

In the next blogs we will discuss how you can Time the process of final due diligence then close. And Strategize by following the state rules for collection, foreclosure and/or negotiation with the defaulted Borrower.

Always use a qualified attorney familiar with non-performing notes to verify the control process describe in this blog.

Wishing you best investing results,

Cherif Medawar

www.CMREI.com

BLOG 2 of 5 - Non-Performing Notes - ANALYZE

How to ANALYZE the Non Performing mortgage Notes you want to buy.

This is Blog 2 of the FACTS system that I created for Non-Performing Notes. This Blog clarifies the A part to “ANALYZE the list of Notes” to select the ones that are safe and profitable within a short period of time and effort.

When you approach a bank and offer to buy a portfolio of non-performing mortgage notes the bank usually gives you 45 days to perform your own due diligence.

The five key elements you want to verify:

1) The property value:  It must be high enough to make profit (based on comps- location- condition and potential)

2) The loan documents:  Must have been drafted properly (First Lien) for ease of foreclosure in case that’s the chosen route

3) The property liens: No pending liens or other issues such as tax obligations, code enforcement, utilities unpaid etc.

4) The Borrower financial status: Borrower preferably should have a good credit history except for recent and sudden problems causing him/her to default

5) The Bank discount:  Must be low enough to leave room for risk reduction and profit potential

6) The Process the bank uses to sell the list to bidders so you can follow up and close on the transaction, and not waste your time and then they sell the list to another bidder.

In the next blogs we will discuss how to control that list to negotiate the best price and terms.

Sincerely,

Cherif Medawar

www.CMREI.com

BLOG 1 of 5 – Non-Performing Notes - FIND

I am writing a series of 5 blogs to explain the steps any investor would need to follow to profit from NON-Performing Mortgage Notes.

The business model I created is called the FACTS system:

F for Finding the Non- Performing Notes

A for Analyzing the list of Notes

C for Controlling the list to negotiate price

T for Timing the due diligence and closing

S for Strategizing to make the most profit

This is Blog 1 of the FACTS system that I created for the Non-Performing Notes business. This Blog clarifies the F part to “FIND the list of Banks that would sell Notes”.

Obviously, you can pay a lot less for a NON- Performing Note than you would for a Performing one. And if you know what you are doing as I will explain in this series of Blogs, you could make a lot of money in a very short period of time with a high level of safety since the Non-Performing Note is always secured by a real estate property.

So how do you find a bank that is interested, willing and able to sell you some of the Notes they may have?

The answer is: Find a failed local community first and contact them to get to the key executive in charge of selling Mortgage Notes.

Google: “Failed Community Banks” and you will get a list of banks. Search for the phone number of a local branch in your city and call.

Ask for the Manager or the executive in charge of loan work outs, modifications, or foreclosures.

Once you get to an executive, tell him/her the following: “I am not sure if you are the right person I am looking for but I need to talk to the executive handling the sale of Performing and Non- Performing Mortgage Notes”. 

Once you get to the right party ask them:

1)        Do you sell Performing and Non- Performing Notes?

2)        Do you have any local Notes?

3)        Would you sell individual Notes?

4)        If it is a list, is it divided by type of property, such residential or commercial?

5)        Can I get access to a list of Notes to review and assess if I want to make an offer?

6)        What kind of action do I need to take to receive a list? (ie proof of funds)

7)        How long will I have to do my due diligence? (Usually 30-45 days)

8)        How often do you sell/assign Notes?

9)        Do you use an in-house attorney or an outside firm to foreclose?

10)  What steps do I need to follow to start the process with your bank?

 In the next few Blogs, I will clarify what you are looking for and the steps you will need to follow to Analyze, Control, Time and Strategize for a huge profit in this untapped and limited business opportunity.

Wishing you much success,

Cherif Medawar

www.CMREI.com