Archive for November, 2013
The December 2013 Edition of The Profit Newsletter is available for download just in time for our Atlanta REIA Main Meeting on December 4th. You can download The Profit Newsletter as a High Quality PDF or Low Res PDF for slower devices. The Profit is the official newsletter of the Atlanta Real Estate Investors Alliance and is a digital, interactive newsletter for new and seasoned real estate investors delivered as an Adobe PDF file to read on your PC, Mac, Smart Phone, iPad or other mobile ready devices with a PDF reader. Many of the articles and ads in The Profit contain many hyperlinks you can click or tap to visit websites, watch videos, listen to audios, download content, send emails, comment on articles, share socially and much more! The high res version of The Profit is “print ready” for those who want to print the newsletter on their home or business printer. Also, be sure to Subscribe to The Profit Here so you don’t miss a single monthly issue.
See The Profit Archives for our past editions.
Investing in real estate is profitable, fun and there are times when it can be psychologically rewarding. The real reason why you are doing it though, your motivation, has a lot to do with total financial freedom and with the ability it will give you to dictate your own future away from money worries and pressures that have anything to do with finances.
This is why the decisions you make in your real estate career are going to affect your purchasing record and the way you operate as an investor in terms of identifying the correct market to target.
The thing to remember when you are working in real estate is that it takes almost the same amount of time, effort and attention to detail to close a small deal as it takes to close a large one so there’s no real reason you should not be closing large deals all the time and for that you need to get into the frame of mind that allows you to identify specific goals within specific time frames. Read More→
Recently I wrote an article on “Determining Your Marketing Plan in 7 Easy Steps”. You can apply these 7 Steps to market your home buying and selling business or pretty much any other business, product or service you wish to promote.
In this article, I want to expand on Step #1: Determine How Many Leads You Need to Succeed at _____________. For the purposes of this article, let’s fill in the blank with Wholesaling. In order to determine how many leads you need to succeed at Wholesaling, you need to begin with the end in mind and ask yourself a few more questions…
1. How many deals do you want to do per month and per year?
You need to set a target number of deals you want to quick turn (put under contract to buy and immediately resell or assign) each month to know if you’re achieving your goals. Let’s say you want to find and flip 1 to 2 deals per month or 12 to 24 deals per year. This is a very, very realistic and achievable goal for any part-time real investor.
2. How much cash do you want to make per month and per year?
You need to set the monthly and annual financial goal you wish to achieve so you know if you’ve succeeded or not. Let’s say your goal is to make $10,000 per month or $120,000 per year wholesaling houses on a part-time basis. Again, this is a very realistic and achievable goal for an investor who is willing to put in the time and effort to get the job done. Yes, wholesaling is like a job. It pays you well if you work it and pays you nothing if you don’t. Read More→
“It is not enough to be busy. So are the ants. The question is: What are we busy about?” ~ Henry Thoreau
I love the holidays! But they can be pretty tough to navigate, what with parties, church and synagogue events, school happenings, gift shopping, cooking, work, and everything else I’ve got to manage. Thank goodness for my iPad, because otherwise, I would forget about Grandpa Bill’s annual Christmas Luau. And that party is a hoot!
We’ve talked about applications for getting organized before. Well, I’ve found a new one I think you’ll like: “Mynd” calls itself the “calendar with a brain.” That might be taking it a little far, but it’s pretty darned smart.
The best applications can integrate with other apps to make your life easier. What do I mean by that? Well, let’s say you’ve got an appointment with your lawyer at 3:00. When you made the appointment, you put it into your smartphone’s calendar. (You did do that, didn’t you?) On appointment day, your calendar sends you a reminder, and you’re ready to get in the car and go – but you don’t remember where her office is. If your apps aren’t integrated, you’ll have to exit your calendar, go into contacts, and find your lawyer’s address and jot it down. Then you’ll have to exit contacts, get into your GPS application and enter the address. What a pain in the neck! Don’t you wish your calendar could just talk to your contacts list and fetch the address for you? Well, that’s exactly the kind of convenience I’m talking about. Read More→
Do you have a solid plan to have your real estate investing be your vehicle to retirement? Do you know how many units you need to own to quit that J.O.B (just over broke)?
Not having a solid plan of action is one of the biggest mistakes I see new investors making. Most people know that they want to be full time investors and they want the passive income from real estate to replace their working income but they never really form a solid plan to get to that goal. In this article I will help you do just that! Create that retirement plan!
The first step is to decide how much money you need to live on each month. Not how much money you need to be really rich but just how much money you need to cover your monthly expenses and be free from having to earn a paycheck. Most people I speak to say this is $10,000 a month. Read More→
If you’ve been following our articles, then you know we have often talked about how self-directed IRAs give you the freedom to invest in what you know and understand with your retirement account. This is the first time that we will talk about investing in what you don’t know.
Setting the stage…
Introducing Jenna, she is new to real estate investing and knows some very experienced real estate investors she can lean on for advice. She’s looking for her first deal and has not yet mastered the art of networking.
Jenna is looking for her first purchase with her self-directed IRA…a single family home for $60,000 or less in an area that currently has a shortage of rental properties available. She wants 50% equity in the home she purchases and, given her inexperience, she is looking for a home that needs very minimal repairs. Additionally, she wants a net monthly profit of $250 per month. Her goals are ambitious even for an experienced investor. Read More→
In our last issue, I dealt with Locating Prospects by using a virtual assistant to call FSBO ads. I said that’s pretty much all we do here and can’t keep up with the leads they generate. This month we’ll discuss how to determine if it’s a suspect or a prospect and quickly determine which need to be called and which need to be trashed.
It all begins with my Property Information Sheet. It’s also located in my courses. This form is the heart of the pretty house business. It’s as important to an investor as food is to a restaurant. (Nope, I couldn’t write this without a restaurant reference.)
There are several things you must know before you can prescreen a prospect. Until you get these facts, you can’t tell if it’s a deal or a dud. Many try and wonder why they are confused. You’ll always be confused without the critical facts. Read More→
As a trainer of appraisers for nearly 15 years, to those who hold private and public roles, one thing is certain, local assessor offices around the country make relying on their values rough on investors. However, for those of you connected to REIAComps, the control and feeling of confidence you have over your deals is priceless. The stuff going on in places like Clark County, NV or even your own area won’t shake you.
Most municipalities across the country use a formula tied to market value for assessing residential property taxes. In many parts of the country some form of non-disclosure is the norm. Thus, relying on assessed value is a second option.
However, when the decision to reduce the assessed value of a property from $19.5 million to $2,500 was decided by the State Equalization Board in NV, you can just imagine the problem this caused. The use of any assessed values to develop an offer price or ARV is literally eroded. There goes any hope of making a good offer to buy or sell. Read More→
Last Friday, I took Michele, a new real estate investor, out knocking on sellers’ doors. Hers was a very, very special case that touched my heart.
Recently, Michele lost her husband. This caused her to fall into financially troubled times. In an attempt to dig out of the I-don’t-have-any-money pit, she attended one of those “free” real estate investing dog-and-pony shows that come to town regularly.
Michele went to the seminar hoping to find an “easy” way to make “lots” of “quick” cash. Don’t you know – this is exactly what their course promised! Because Michele didn’t have the $20,000 cash needed to pay for the special “mentoring” package, she chose to raid her retirement account – the last money she had on earth – to buy the “guru’s” package. In other words, she willingly dove headfirst into a barrel of fishhooks!
Before you roll your eyes, know this: Over the years, I’ve met thousands of people who have made similar decisions! Why do you think those dog-and-pony shows continue to come to town?
Michele’s intentions were good – she was simply looking for a way out of her financial mess. She honestly believed she was trading her $20,000 for $1 million dollars. Read More→
Alright – Winter Time! Time to hunker down and do some deals before Christmas. You want to give out good gifts this year right? Well get to it then! It’s cooler out so you will be less tempted by the beach and the pool and can focus on your marketing and getting the phone to ring.
So as I am writing this article in early November, I’m thinking about the deals we did in October. It was actually one of our best months (after a bunch of slow months). We did (9) deals in October. Yeah – that seems like a lot. And they were some of the easiest deals we have ever done – and the way we found and executed the deals was about the most cost effective way you can get them. We spent zero marketing dollars – directly – on getting these deals. How is that possible you ask? Well let me explain.
Networking. The (9) deals were all accomplished just through networking. I found the sellers of the properties and buyers for those properties just through networking. No direct mail, no fancy websites, no bandit signs, no door knocking. Over the past year and a half or so we have been out there in the real estate investing game and doing marketing, meeting buyers and sellers, meeting other investors, meeting other real estate professionals – whether its Realtors, Title Agents, Contractors, Property Management, etc. We get out of the house a lot and do a lot of networking and do our best to build relationships. Read More→
With the holidays here everyone begins to think about everything they are thankful for having in their lives. I did the same and came up with the same things everyone else thinks about like family, friends, having a roof over my head, a career I love, etc. Then I began to think about what I was thankful for having in my work life. When I was done with this list I noticed I forgot the contractor. Without a great dependable contractor, investing in real estate is difficult. Think about how much more work load you would have if your contractor was not dependable. You would have to drive to all your projects every day, you would need to supervise numerous tradesmen daily, order materials, shop around for the best labor and material prices, put up with all the laborers excuses, etc. I am not saying contractors are perfect but they can be trained to work perfectly for you as an investor.
First of all, the best way to know if you have a great deal is to have a contractor validate your estimated repair cost with a scope of work sheet along with the cost. Keep in mind that no one can see behind walls so make sure to have a reasonable cushion. The benefit about having a contractor you continuously work with is that he/she can adjust their numbers if need be to make your project a deal. They do this because they know you will have another project coming soon. I have had many tight deals become very profitable due to having the right contactor. I know what all the wholesalers are thinking, “How can I get a contractor to do this for me if I am still not buying houses and investing myself?” To accomplish this, start by teaming up with a contractor that has shown you his work and you have verified he/she is dependable. When you contract a property have him/her give you a written bid and include it in your marketing packet. If an investor purchases the home, uses the contract and the contractor performs, you are now the go to guy/gal with the right connections. Best of all, when it comes time for you to do your first investment you will have your go-to contractor ready to give you, the guy that gave them plenty of business in the past, a great price. This is the ultimate win-win situation if executed properly. Read More→
The more time I spend with real estate investors, the more I appreciate the variety and creativity of their real estate transactions. However, one thing I hear often concerns me: unlicensed real estate investors “brokering” a transaction for a fee. In the real estate world, transactions with real estate brokers are far from unusual. This is only noteworthy with investors because many investors do not hold real estate licenses. Because the investor is unlicensed, the law will generally void the investor’s ability to get paid a brokering fee – no matter what the contract says.
Let me give an example. Suppose Nick (a real estate investor) enters into a transaction whereby he introduces the Seller of an unlisted property to a Buyer. Nick helps the Buyer and Seller negotiate the price and assists in the execution of the necessary contracts. Because of his work, the Buyer and Seller agree to pay Nick $10,000 at the closing and put it in writing. The closing occurs. However, the Buyer and Seller do not pay Nick. Frustrated, Nick calls his attorney to see if he can recover the $10,000. He receives very bad news. Because he is not a licensed real estate broker, the law will not enforce his contract nor allow him to recover for his time. Read More→