Archive for January, 2015

When it comes to Wholesaling properties, I see the question asked frequently:  “Where should I start?  Marketing for Motivated Sellers?  Or Marketing for Cash Buyers?”

We are somewhat biased when it comes to this subject, because in most of the materials we went through when we were first getting started out all said to start with Marketing for Motivated Sellers.  The theory is that if you find a Hot Deal, meaning a property under contract that is WAY below market value, if you have that then the Cash Buyers will find you.  So just get out there and go find a Hot Deal and the Cash Buyers will come to you.  On a side note, same principle applies when it comes to finding Private Money.  If you find the Hot Deal, the Money will find you.  Not, go find a Private Lender then go look for a Hot Deal.  I always like to have the Ace up my sleeve – when you have the Hot Deal, you have control.

I am somewhat intrigued by the theory of building your Cash Buyers List first though.  The theory with that one is that if you go out and build a big buyers list, then you can just wholesale other Wholesalers deals.  So you have lined up “Buyer Bob” and he wants to spend $100K this week on some cheapo rental houses, but you have nothing under contract.  You don’t tell him you have nothing, you say “let me check with my people”, then you call your Wholesaler buddies and see if you can Joint Venture on some deals that they have under contract and split the profits.  I can see this as a viable strategy. Read More→

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Flippers Earning Record Profits

Posted on January 1, 2015 by

The market’s never been better for house-flippers. That’s the word from a recent report from real estate data and information clearinghouse Realty Trac.

Flippers accounted for 26,947 home sales in the 3rd quarter of 2014. That represents roughly 4 percent of all single-family home sales in the U.S., according to Realty Trace – a five-year low and close to the long-term average historic levels. Those figures are down somewhat from 4.6 percent in the preceding quarter, and even more from the 5.6 percent of single family residential home sales accounted for by fix-and-flippers in the year-ago period, according to the Realty Trace U.S. Home Flipping Report.

So flippers represent a somewhat smaller percentage of the market than they used to. But they’re getting their prices: The average fix-and-flip deal averaged a gross profit of nearly $76,000 per home. That’s the highest average profit per flip in history.

Breaking the numbers down a bit further: Read More→

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New Year Resolutions

Posted on January 1, 2015 by

Happy New Year! I know a lot of you are looking for a “break out” this year and some are looking to continue their multifamily growth in 2015. No matter what your goals for the year are, they all begin with one very important concept… Focus!

At the beginning of every year most people make crazy resolutions that they never keep. We make resolutions to eat better, get on a crash diet, start that extreme workout program etc. While these resolutions start with the best intentions we usually don’t follow them through or at least not to the extent we had planned on.

In the business world this is what I call the battle of the “Comfort Zone” vs “Shock Zone”. This can probably be applied to our daily lives as well. When I first became a real estate student I realized a very important lesson. The need for FOCUS! Read More→

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The banks are turning on each other! Over the past few years, Americans have become aware of the financial fraud that was committed against the country by the major banks. The more the public hears about the Federal Reserve spending $60-70 billion dollars every month to buy garbage loans back from the banks that created them at 100 cents on the dollar, the more upset they get. Well it looks like the banks are starting to get upset with each other, too. Bank of New York Mellon (BONY) has sued JP Morgan Chase for misrepresenting the value of a pool of loans that was sold to BONY for nearly $1 billion. You would think that BONY would expect this sort of thing from Chase. After all, it has been common knowledge for years that the banks have been lying about the values of their loans and mortgage backed securities since the beginning of the housing boom. In fact, we now have the first person testimony of a person who tried to stop the fraud at Chase.

According to Chase whistleblower Alayne Fleischmann, Chase knowingly bundled up garbage loans with good ones, slapped a good rating on them, and sold them off to investors. These garbage loans were referred to as “scratch and dent” in the industry because they were a lot like dinged up cars – worth nowhere near the same amount as cars in good condition. This isn’t just an accusation though. Chase has admitted to selling hundreds of millions of dollars’ worth of these loans to investors by lying about their quality. Not only do they admit to doing this, they also admit that they were warned by people like Fleischmann that they were committing fraud by knowingly selling these mortgage backed securities. Read More→

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Roger SalamIn the previous article (if you missed it, see Part I), I mentioned about all the things you’ll need to do before and during attending a seminar to maximize the investment of your time and resources.  

However, that’s not enough. If you really want to capitalize (and I’m assuming you do, otherwise you’d not be reading this), you MUST implement these post seminar suggestions. Actually, these are more than just “suggestions” they are requirements to truly maximize the experience of being there.

1. What To Do With The Business Cards

I hope you collected tons of business cards (or exchanged contact information electronically) to expand your contacts and sphere of influence. Now what do you do with them? Stack them in some corner of your work desk at your office or home perhaps with the rubber band? No, that’ll not do. I hope you’ve some kind of contact management software (I use Infusionsoft.com).   Type them (preferably your assistant) into your contact manager or you can use a business card reader to make it faster. I give my stack of business cards (with notes on back) to my assistant and they go into my CRM (Customer Relationship Management) software for follow up actions. On the back of the card, I write down where and when we met and anything that stands out about that person in the notes section of the contact. Read More→

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Who Values the House More?

Posted on January 1, 2015 by

Investors and homeowners alike are almost intuitively inclined to have a higher opinion of their existing or potential properties than other parties. This would include potential buyers, lenders, brokers and even appraisers. However, this wasn’t always the case during the bubble years of the last decade. We know inflated real estate appraisals contributed to the excesses. The data within REIAComps has consistently shown investors how to determine both solid acquisition value and after repair value for residential real estate.

For those of you already connected to REIAComps, the control and feeling of confidence you have over your deals is priceless. Having valuation data at the ready adds power and knowledge to your tool belt. Use REIAComps to investigate the changing values of dwellings no matter what market area you are in.

When we look at the half-dozen years after the financial crisis, everything got turned upside down. We know Appraisers became in most cases overly conservative.  Every one saw Appraisal values were consistently lower than homeowner value opinions from 2007 to 2013. We could even say this factor was a drag on the U.S. housing-market recovery.  Read More→

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I have been asked by new and veteran investors if they should consider getting a real estate license. My response is usually, “Sure, why not?” I do not want to push them into it nor do I want to convince them not to do it. I simply want them to consider for themselves their own pros and cons of having a license. Personally, I like having my license and could not imagine being an investor without one.

Are there cons to having a license? Yes, but the cons are insignificant or temporary. The one con that most investors and real estate agents alike share is the cost of having a license. Just getting licensed is an investment. You need to take some classes and make a minimum score before given permission to take the actual exam to get licensed, which cost a few hundred dollars. Once you are licensed and depending in what state you are in you must pay a National Realtor Association fee, local Realtor fee, MLS fee and brokerage fees. In order to keep the license you must also pay to take continuing education courses. However, if you close enough properties they will more than pay for these fees. Another con you may have as an investor is having to work for a brokerage. Read More→

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What’s New in QuickBooks 2015?

Posted on January 1, 2015 by

It is the goal of this column to answer questions about QuickBooks® and how it is used in the REI arena. Know how to record transactions in the proper way and have your set of books in good shape when it comes time for taxes. It is our intention to do this by you the members submitting questions to Karen@smallbusinessadvisor.biz, and getting answers here in this column.

QuickBooks Pro 2015

If you have QuickBooks 2013 or 2014 and are thinking about purchasing 2015 version – there are a few changes to this update. I will point out just a couple here but there are many more.

The same as 2014, QuickBooks Pro 2015 has a “What’s New”yellow bar on the side of many of the windows that have new features. When you click on the bar an overlay feature will pop up to indicate where the new features are. Most of these are in your shortcut windows. Once you have viewed them and are comfortable that you know the features you can turn off the yellow bar under the “Help” drop down list. You can always turn it back on if you need to refresh your memory about a feature. Read More→

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