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Satori Alliance is a Silicon Valley coaching and training enterprise that teaches wealth building strategies, financial mastery, and balanced living.

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To be a leader in teaching our clients to create and manage sufficient wealth to fulfill their dreams, support their families and communities, then give back by teaching others to do the same.

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Now that the barn door is open and the horses have galloped off into a landscape of foreclosed homes, the U.S. Department of Housing and Urban Development has developed guidelines to help people more aware that they’re entering into dubious mortgage arrangements.

The Real Estate Settlement Procedures Act www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm) took effect on January 1, and represents a whole new set of guidelines lenders must follow in order to keep consumers from doing stupid things and avoiding common sense entirely. Part of RESPA is the requirement that lenders deliver a new four-page good-faith estimate about the costs of a mortgage. In response to the government tradition of trying to bring simplicity to finance, Wells Fargo has issued a 35-page document to help brokers understand the four-page form.

I’m not going to come out against consumer protection, but these changes are doubling or maybe even tripling the workload of real-estate financing professionals. It’s not clear who’s going to pay for this added administrative time, though it’s likely that it’ll be taken care of by higher, hidden fees. Then the vicious circle will continue: the government will require another form to explain the hidden fees. The lender will have to have still another form for borrowers to sign saying that they have been given the hidden-free form and understands what that form explains.

Where does this extra work come from? We used to be able to get a good-faith estimate of costs at the beginning of a client’s search for a home. It was always helpful to give the client a sense of what kind of property to look for. Now RESPA requires one form at the beginning of the process, and another good-faith estimate when there’s a property in sight. And that good-faith estimate must be within a small percentage of the final cost, or the lender is out of compliance. This makes one wonder, then, why it’s called an estimate.

It’s a merry-go-round. Consumers do stupid things, like applying for no-money-down, interest-only loans, in the expectation that their property value will rise. Economic laws kick in, bringing down the house of cards, and the government comes along trying to fix a problem that’s already taken place. It asks for more forms and more signatures from consumers who still don’t know what they’re signing; they just look to their real-estate professionals, who confirm that if they don’t sign the form, they can’t get the loan. Those two-hour hand-cramping signing sessions are just going to get longer.

As longtime readers of this blog know, my goal for DBNR Investments has been simple: to put people into homes who want them, can afford them, and will improve their situation in life through home ownership. Without apology, there is more than a little altruism there, a throwback to the philosophy espoused in that Christmas classic It’s A Wonderful Life.

I believe, as Jimmy Stewart’s character George Bailey did, that at the heart of all our actions is simple human decency, however you characterize it - as a concern for humanity or the planet or people or just making a difference.

In this business, however, that philosophy sometimes collides with another strong American philosophy, capitalism. (Or, as it was described in that other Christmas classic, Miracle on 34^th Street, “Make a buck, make a buck, don’t worry about the other guy.”)

Don’t get me wrong - I have a strong profit incentive here, and my commitment to getting property back into the hands of people who need it is carefully balanced with the profitability that a business and its investors require.

But what I’ve been noticing recently - perhaps in counterpoint to the holiday season just passed - is that the conversations I’m having with potential buyers relate more to the idea of revenue and profitability than with our original goal. I understand that, but I miss the background element that I had hoped would drive the conversation. I’m looking for George Bailey and the people I’m meeting are Mr. Potter, the money-grubbing skinflint of Bedford Falls. I worry that we are losing sight of what we’ve committed to.

I’m looking for that same altruism in my colleagues as well. I was talking to my brother, who’s doing some sales work for us. He and I are a lot alike. While we acknowledged that there has to be some income for him to continue with this project, given how much time it takes, we also agreed that you don’t get wealthy simply by looking for ways to generate money. You get wealthy doing the work you’re passionate about, and that’s what pays you well. He’s going to continue, of course, because he believes. As Natalie Wood said in Miracle on 34^th Street, “I believe. I believe. I know it’s silly, but I believe.” She was talking about Santa Claus, but the theory still holds.

As the new year dawns, I’m going to keep believing, keep having faith, and keep looking for the George Bailey in everyone.

The late Speaker of the House Tip O’Neill used to say, “All politics is local.” That used to be true about the real estate industry too. In order to make investments, you needed a local expert, someone who understood the market and could guide your way.

The evidence continues to mount that the world is changing in that regard. I’ve talked frequently about the increasing number of opportunities for private individuals to invest in real estate anywhere, circumventing the need for assistance from traditional players in the real estate and financial community.

Part of it is, of course, the reach of the Internet, and the ability of anyone to track comparative housing prices through sites like Zillow, Cyberhomes, Eppraisal, Realtor.com, or to check advertising in multiple cities through sites like Craig’s List or Backpage. But that’s not all — low-cost travel through airlines such as Southwest is changing the landscape too.

Let me use just one woman I spoke to as an example. She was from Maryland, and had called regarding a property we have in Syracuse. She told me she had 15 properties in various states, though primarily in New York, Florida, and Ohio. The properties represented $1.2 million in property value and about $9,000 in monthly income (so-called “passive income,” the amount she gets after paying the mortgages). She wanted to know more about the property because she was flying to Syracuse to look at it the following day.

This is how she spends her time — talking to people in real estate, especially in the areas where she wants to invest, and traveling to see the properties herself. She ended up not pursuing the Syracuse property because it didn’t match the parameters she’s set for her investments. She calculated that it would have a market value after repair of $50,000 in the current market conditions, but that it would take as much as $25,000 for those repairs. Though we paid $7,000 for it, we were going to sell it for around $12,000. She said she likes to have no more than 70% of current value invested, so she passed. But she wants to stay in touch with us.

This woman and people like her are changing real estate investing. Now, you still have to have a title company involved to make sure title is transferred properly, and you need to know about the regulations real estate agents are familiar with. But by taking real estate agents out of the mix, you can save anywhere from 6-10% of your costs. Add to that the opportunity of finding growth areas beyond your own back yard, and the opportunities are staggering.

One of the hardest parts about starting a business, I’ve learned over this past year, is balancing the mundane with the mission.

The mission, of course, is being successful. To achieve this, we’re engaging in planning sessions for 2010, setting strategies and mapping milestones. Our goal for 2010: becoming wildly profitable.

Unfortunately, most small businesses don’t do this. It’s difficult to keep your eyes on the horizon because the items on your desk need attention too. Each one is a distraction to the other, but each is necessary. Admittedly, sometimes I get bogged down in my little to-do list. All of those items are important, relevant, and need their space and my time. And if I don’t focus on them, the whole never makes it into existence.

But we do set aside time for strategy twice a week. My partner Bob and I will frequently have conversations over lunch, but it’s something I need to put on my calendar, so I’m committed to it.

Even more difficult for small businesses, however, is the concept of flexibility. They frequently need to shift their strategy, tweak their tactics, and then communicate that to the rest of the staff. As situations evolve differently than we anticipated, we then face the question: what now?

If we ignore reality, we may suffer financially. If we incorporate the new reality into our tactics poorly, the business becomes a mish-mash with no real purpose. Such situations must be addressed.

But that’s the way life occurs in its natural habitat. It never goes as expected. There are unimaginable variables. Real leaders — which we’re learning to become — have the ability to flex with what happens, keep moving, and maintain their eyes on the far horizon. When life goes a different way, alter the plan and keep on going.

New York Times columnist Thomas Friedman frequently talks about how technology has “flattened” the world, which both makes connections easier and business models more fragile. This is nowhere more true than it is in residential real estate, which used to be local and, thanks to distressed property programs such as ours, is now shifting toward something broader.

But even in an electronic world, when all you face is a computer screen and all you hear over a telephone line or a Skype connection is a disembodied voice, participants must trust who they’re dealing with. I’ve made some interesting connections this past week that show both the potential and the pitfalls of this new flat world.

As regular readers know, I participate frequently in the forums of a Web site called BiggerPockets.com, a social networking site for real estate investors. I got a call from another member on the site, a young man with a South American accent but clearly fluent in English. He has a bachelor’s degree from San Francisco State in business administration, and like me, has worked in both real estate and as a mortgage broker. He has big dreams, and he’s savvy about the Web.

He unabashedly told me he was intrigued by what DBNR Investments is doing and asked if I would be his mentor. Although I usually associate the word mentor with someone who’s a celebrity in one’s field, I realized doing that has some of the same characteristics as being a coach, which I’ve certainly done before. However, I’ve always charged for coaching services; I’ve never known anyone to charge for being a mentor.

It’s conceivable that I could be teaching this young man everything I’ve learned over the past few years, only to find out that he’s struck out on his own and become a competitor.

The second connection came from one of those unsolicited e-mails that pop up in your electronic in-box with annoying regularity. But this one was intriguing. It was from someone in Las Vegas offering assistance in navigating the morass of grants and loans the federal government was offering small businesses for the acquisition of assets — including real estate.

I spent 15 minutes on the phone with this person, who turned out to be a grant writer. He offered no promises regarding the money, only his assistance in navigating the nightmare of red tape that was potentially involved.

Will working with each of these individuals be sinkholes of time and effort that will come to naught? I don’t know. I do know that the structure for trusting people is the same whether the world is flat or you never venture out of your neighborhood. I converse with them. I take notes. I compare their ideas to others I’ve talked to. Are their ideas concise and logical? Do they have conviction about what they’re doing? Are they confident about their skills? Most important, do they deliver what they say they will?

I consider establishing a connection with these people a low-risk effort. Finding connections in the business world may come from longer distances and be stranger than ever before, but over time, when both sides deliver on what they said they will, trust will always develop.

As winter descends on most of the United States, our work selling DBNR’s distressed properties has to heat up. The cold weather is - pardon the expression - crystallizing some of our priorities.

One of our first big challenges is making sure the properties in the coldest part of the country are prepared for the change in weather. Some of them are already winterized, but others aren’t - and as someone who has lived in California for many years, the to-do list is an unfamiliar one.

An even bigger challenge is the prospect of some of the properties figuratively going cold.  It’s time to get creative. I’m shifting my efforts, putting the Internet marketing skills I’ve been learning to work. I’m not sure what will happen, but I know what I’m going to do. I’m going to use the Internet to spread the word - ask questions on social media network, post information on the sites of investment clubs, get information on other ways of publicizing and selling these properties.

I’ll research municipal governments that buy depressed housing and convert it for Section 8 (low-income) recipients. I’ll see if eBay presents any opportunities. I need to converse with other investors who are doing something like this and find out how they’re dealing with these opportunities. I’ll make both human and neural connections and the answer will come through.

I’m confident I will stumble on something cool, and that I’ll know it when I see it.

Even as I’m working on finding prospects who will be passionate about acquiring distressed property, I’m knee-deep in administrative activities to ensure the success of the project. Here’s a progress report of what’s been happening.

I’ve sent lists of our properties to a couple of different wholesalers - one in Florida and one in North Carolina - who will post them on their Web site and add their fee to the purchase price. This effort has made me realize that we need to have photographs - not just listings - of all our 33 properties posted on a Web site. But we’ve gotten as many as three dozen photographs per property, and it’s time-consuming not only figuring out which ones would be best, but uploading and captioning all of them.

I’d really like to find other wholesalers, as well as other on-the-ground services to help out. Unfortunately, Stonecrest, the originators of this project, are keeping all the people at DBNR’s level isolated from each other. They are concerned that if more inexperienced investment groups have access to the more experienced ones, the latter will be bombarded with queries. I understand the logic, but I don’t agree with it. In the meantime, Web communities such as Bigger Pockets are filling in the gap somewhat, but there’s a lot of information there to sift through.

We’ve been wrangling over customer-relationship management (CRM) systems as well. We started out with a product that Stonecrest recommended, but that proved inadequate. We’re now working with ACT, but need to be able to upgrade to SugarCRM at some point in the future. All we really need is a database that everyone can access remotely, and one that is updated regularly, and it’s proving to be tougher than I thought it would be.

This project is also turning out to be an education for my management and leadership skills. Coordinating the activities of salespeople is still not the same as me doing it myself. For someone who’s worked independently for so long, I find myself getting impatient when people don’t file their sales reports. I anticipated that it would be challenging to manage a remote staff - and it is. We’re all learning together.

I have finally chosen someone to provide title information. That was my second-to-last piece of infrastructure work. This was also tougher than I thought, because some provide niche services for escrow companies and lenders, and charge more simply because they can. But other people are putting information on the Web and charging as little as $100 per month, which is a third of what industry leader First American wanted to charge for the same information. I went to First American and told them about this discrepancy, and to their credit, they gave me a contract at the lower rate.

The last piece of infrastructure work? To find someone to do evictions, if that becomes necessary. That’s something that, thankfully, doesn’t have to be done right now.

It’s clear from my work on our DBNR project - buying and reselling distressed properties - that the recent meltdown has changed the rules of real estate considerably. If nothing else, the people we’re encountering and the work we’re doing across the country differ greatly from what I’m accustomed to here in the Bay Area. Further, I’m finding that our project requires a different kind of due diligence - one that incorporates judging both qualitative and quantitative qualifications.

Take, for example, our property in St. Louis, Missouri. Generally, before any kind of a housing transaction, you request a credit report to see what someone’s payment and credit history has been. We had five prospects, four of whom supplied four credit reports. In the Bay Area, a credit score of less than 620 is cause for alarm. The highest score of the four in St. Louis was 524, and the lowest was 390; frankly, I didn’t know credit scores went that low.

You want to be convinced that someone can make their payments on time. The report should show whether there are late payments, and if so, with what frequency? Mostly, we want to see if there were any evictions, which would indicate they’d stopped making rent or mortgage payments.

With this group, though, we had to dig a little deeper and see if there were mitigating circumstances. I learned a lot by asking such questions. For instance, one woman had a foreclosure on her record, but it was because she had helped her sister buy a house, and it was her sister that hadn’t made the payments. Another prospect had declared bankruptcy, but was quite upfront that he’d done it to protect his assets from his ex-wife. In other situations, there have been medical debts that remain outstanding.

You might be surprised to know which prospect we finally chose - the one with no credit score.  He had a good explanation - he had always worked for cash. While he had no credit score, he not only had documented income, but he was able to document that he’d owned other properties. We negotiated a $38,000 purchase price, with $500 down and $600 per month.

We also came up with what I think is a highly creative way to ensure his passion about his property. If he makes his payments on time for a year, and documents the repairs he’s going to make, we’ll reduce the balance by $5,000. That gives him a purchase price of $33,000, for a property he believes may be worth as much as $50,000 once it’s fixed up.

This is someone who’s passionate about owning a house. Given the number of people who have chosen to walk away from their homes in this crisis, perhaps this is the way the mortgage industry should have been qualifying homeowners all along.

DBNR investment group’s current project - buying and flipping distressed properties - always had a bit of a grab-bag aspect to it. The idea was always to gather up properties (33 of them in 14 states), extract them from the balance sheets of overwhelmed lenders, and sell them to interested and committed buyers. We never had any control of the what and the where, which has yielded some interesting treasures and potential troubles.

Cleveland, Ohio

We have an old, gabled house sitting on a 6,000 square-foot lot on Church Street in Cleveland. The house is white with vinyl siding, the kind of place that’s common in the Midwest. I got a call from a carpenter who’s interested in the property because it reminds him of the home he grew up in. He had an accent straight out of the movie Fargo, in which he unexpectedly asked me about the second house.

I wondered, What second house? We only received title to one address, but he said there were two houses on the lot and that both had address numbers. We each did some research and determined that not only did the local zoning rules allow for second houses, but it was a common practice to build second homes for an older family member. The second house’s address numbers - which apparently were unofficial - may have been added to keep the mail straight between the two houses. But that was a clear bonus.

Syracuse, New York

We were under the impression that only single-family homes were part of the packages. But when I looked at the picture of the property on McClennan Avenue in Syracuse, I realized it was actually a four-plex. A call from a woman whose boyfriend does fix-up work confirmed this. It needs sheet rock, flooring, and water heaters in the units, but we only paid $4,300 for it, and multiple units almost always have more value than a single-family home. Another surprise bonus.

Clearbrook, Minnesota

Not all of the surprises have been pleasant, I have to say. One of our properties in Clearbrook, Minnesota looks like a barn that was converted to a house. It’s painted a bilious shade of pink. As if that weren’t challenging enough, we got a call from a neighbor insisting that the structure has been mooching off of his utilities and there’s no easement on his land. Any sale is going to have to involve paying him something, he insisted. Interestingly, though, he said he’d be willing to take the property off our hands, cheap. We’re going to have to hire a surveyor and maybe a lawyer on the ground there to hash out the facts.  Or, we may just sell it to him, after all, it appears to be 29 miles from nowhere. . .

All in all, we’re finding that, if nothing else, it’s a big, diverse country out there. Some of the accents of people who are calling are so thick, we have to listen to the messages two or three times before we understand them. The ease with which that second house was built in Cleveland and the pink barn was built in Clearbrook presents a strong contrast to the difficulty entailed here in Silicon Valley of building a second structure on a property. I’m finding that there may be much easier places to live than here in California when it comes to real estate.

I’m also meeting lots of motivated people, and enjoying the surprises along the way - well, most of them. . .