Archive for August, 2015

Receiving Payments in QuickBooks

Posted on August 1, 2015 by

It’s probably one of your favorite QuickBooks activities. Be sure you understand the mechanics of recording payments.

There are numerous ways to prioritize your workday. Do the most difficult things first. Get important phone calls out of the way. Respond to various emails.

But it’s likely that one activity takes precedence when you see that it needs to be done: recording payments. While you’re probably very careful with this process, it’s critical that your actions here are accurate. If they’re not, you could either lose money that you’ve earned or anger tenants by requesting payments they’ve already made.

QuickBooks comes with some helpful pre-defined payment types; however, you also have the flexibility to edit that list and add new types. To see your list, open the Lists menu and select Customer & Vendor Profile Lists, then Payment Method List. This window opens: Read More→

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Setting the RIGHT Goals

Posted on August 1, 2015 by

Improper goal setting can really hurt your business. Proper goal setting can make you rich. This is a concept that I see most new investors and real estate business owners learn the hard way. If you don’t know how to set proper goals for yourself then you are very unlikely to obtain any goal. In this article I will help you to learn the art of goal setting.

Whenever I begin mentoring a new student or business client I always start by having them submit their goals. I am actually more interested to see how this person sets goals more than the goals themselves. Most people will set goals based on what they want with little knowledge of what it takes to accomplish those goals. Understanding the requirements of the goals we set will greatly help us achieve them.

I follow a similar process for goal setting that the U.S. military follows. It’s called “Backward Planning Process”. Basically I decide where I want to be. What is my end goal? Once I know exactly where I am trying to go, I work backwards from that point. For example if I want to buy an apartment complex I start working backward with questions like this… Read More→

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Mailing for Dollars

Posted on August 1, 2015 by

My students always ask me “How many letters do we have to mail in order to get a deal?” Before I answer, I want to state that the #1 reason a Seller sells their house for less is because they are motivated. An unmotivated Seller will not take less for their house, as they are not in a hurry to sell. Let me clarify the situations that make a Seller motivated:

  1. Property is upside down – they owe more than it is worth.
  2. Property taxes have increased and they can’t afford to pay them.
  3. Mortgage interest rate(s) adjusted to a higher payment that they cannot afford.
  4. Job Relocation and they can’t sell the house fast enough.
  5. Divorce or Separation will send individuals into foreclosure because they depended on two incomes.
  6. Job loss or reduction in their income.
  7. Bankruptcy – For most people who are upside down on their bills, it also includes their house payment. It is important to know whether or not your Seller is in bankruptcy or planning on it. No transfer of a property can be done while the Seller is in bankruptcy.
  8. Retirement causes a reduction in income.
  9. Insurance rates have been increased and they can’t afford the insurance.
  10. Illness, Permanent Disability or the Death of Spouse/Family Member causes individuals to get behind on their payments.
  11. Exhausted Landlords – Most of the time, the Landlords had great credit but the Tenants won’t pay and the Landlord may have used up all of their financial reserves.
  12. Economic and Functional Obsolescence The Seller may own a residential property, but it’s located in a commercial district. The floor plan of the house is old and chopped up.
  13. Business or Partnerships failing
  14. Vacant House

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I’ve been in a few businesses in my life, still have a few and probably will until I check into the nursing home, and maybe even after.

When comparing buying and selling houses to other businesses, the contrast is so big, sometimes I wonder what the world would be like if all small business owners were exposed to my training before they opened their businesses.

Let’s take a look and compare to my restaurant.

You can start real estate immediately with no money, no credit and no risk and expect to make a profit within the first month or two.

The restaurant required several months looking for a location I had to build out. Then, I signed a long lease with a $7,500 deposit (albeit non-recourse). Then it took 10 months and several hundred thousand dollars to get it opened and a massive amount of my time. As to the profit…it’s been a serious negative and will take many more months to break even. Then we’ll discuss a profit, maybe.

Your real estate business has no employees, only a virtual assistant or two. That means no payroll alligator to suck you dry and no employees to manage or account for and no regulations strangling the life out of your business. Read More→

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All good real estate investors know the valuation of their deals is key to insuring success and projected profits. Since late 2013 transactions in numerous market areas have seen strong sales activity. But what to do when transactions start to slow? All the market areas covered by REIComps, insure when sales changes happen you are not caught off guard.

Last week, we began seeing a number of Support Tickets asking the question, “My retail sale properties aren’t getting multiple offers any more. What am I doing wrong? Equally, we have seen tickets which ask, “Several of our current units for sale in the same area where they have sold in less than two weeks aren’t getting showings”.

Truly, essentially these are the same question, but we had to dig deeper from a valuation perspective. Remember, when we “buy right” typically we can drive the market selling slightly lower. Or in some cases due to sound acquisition, an investor is able to improve a dwelling insuring that buyers can’t wait to make an offer. Read More→

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How Many Leads Do You Need?

Posted on August 1, 2015 by

How many times does your phone need to ring to make a deal? Well, the more rings you have, the more possibilities there are, right? But here is the catch: you don’t want just any calls. You want quality calls. It doesn’t matter how many calls you get if they aren’t ones that are going to lead to getting paid.

You may have heard real estate gurus telling you how to get that phone to ring. But I can show you how to get the phone to ring so that when you answer, you’ll have a potential good deal on the other end.

First, quality calls will decrease your overhead. I typically spend $1000 per closing on marketing. In the past, I bought the latest in high tech products which were supposed to send me 10 leads per day. The problem was that, while the leads were plentiful, the number that actually worked was less than I wanted.

You see, I want to make the time that I spend worth it. I want sellers who call me so ready to sell that I can barely finish saying, “Hi, this is Russ. How may I help you?” And I want them to say, ” I heard you were the best in the Atlanta area, you pay a fair price, you are respectful, and you do what you say you are going to do. I don’t care what you offer me, I will take it because I know you will be fair. I know you can close in 30 days. I trust you.”

How can YOU get these kinds of calls? I’m about to tell you. Read More→

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This month I believe what I will be sharing with you can be very important to you financially as well as to build your financial freedom faster and easier. Last month I questioned why all of the so-called Guru’s are pitching how everyone should be wholesaling properties to build wealth. From my own experience as I said last month, if all you do is wholesale deals you have a job. This month I want to explain what I have experienced over the years doing this type of deal and what I have learned that keeps my buyers clamoring for more deals on a continual basis. The reason I decided to write about this subject is because without the practical knowledge of how to structure your wholesale deals, it is going to be more difficult to pass those deals along to other investors. I hope this information will open your eyes to the real world and what it takes to be more profitable.

Last month I left off by saying, if you always pay too much for the properties you wholesale, the seasoned investors aren’t going to be interested in the properties you find and you will be forced to sell or assign the purchase agreement to other people who don’t know what they should pay. This is because those people don’t really understand how to figure the numbers and once they do figure out they paid too much, it only stands to reason that they won’t want to buy more properties from you. Once word gets out you are asking too much and it will be assumed you don’t know what you are doing and investors will avoid you like the plague. Everyone wants to make an adequate profit from every deal they do or they won’t do the deal. You must realize that there are other ways to profit from real estate other than being a wholesaler. Read More→

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Ok, I admit it. I use four-letter words. A lot. Some of these four-letter words are the kind you may not like to hear if you’re a fine, upstanding person of high moral fiber. Oh well.

The OTHER four-letter words I use are awesome, and if you know how to utilize them properly, they can make you super RICH!  Best of all, you can say THESE four-letter words in ANY crowd, around anyone, without having to worry about getting slapped or getting the evil eye.

So, without any further delay, I’d like to share a short list of some of my favorite four-letter words that can make you rich & are safe to say around women, kids, and Baptists. ;)

I’ll also present these words in a way that mostly applies to real estate, but I promise you that what you’re about to learn here will apply to ALL areas of your life where you want to have success!

FAIR enough? (hey! That was a four-letter word already!)  Here we go…

The first word on the list is an F-Word: FLIP. Read More→

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No Seller Wants Cash – EVER!

Posted on August 1, 2015 by

Just got a call from a realtor. She represents a homeowner who needs a quick sale. The realtor said, “Bill, my client will only consider an all-cash offer. We’re not interested in any of your creative razzle-dazzle deal structures, understand?”

Kim and I get a lot of calls like this. I’ve learned not to say, “No seller wants cash – EVER – ya dingbat!” Saying such would ruin the relationship and destroy the possibility of meeting face-to-face with the seller.

So what do you think? Do sellers really want cash or could I possibly be right?

In this situation, what if I immediately agreed to pay the seller’s $80,000 asking price – in cash? There’s only one condition: The seller must put the $80,000 on her kitchen table, cover it with plastic wrap, and agree that once a month the seller, realtor and I will get together and marvel at the big stack of money.

Sure, this is a silly stipulation that no seller would agree to. But why – since the seller is getting exactly what she wants – wouldn’t she agree to it? Think hard on this. It’s an important question to contemplate! Read More→

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Many of us are aware of the potential for real estate to function within our portfolio. Not only do we believe in real estate as an investment, but we know that over time, it tends to go up in value – there is, after all, only so much land to go around! But what happens when you incorporate real estate into your retirement portfolio? Do the rules change when you’re running a Real Estate IRA?

Truthfully, many of the same principles of real estate hold true when you’re investing in real estate from within a Real Estate IRA. But that doesn’t mean there aren’t some other things to be aware of – this is, after all, a different type of investment account.

Even so, you’ll find that investing in real estate through a Real Estate IRA isn’t only intuitive, but can be just as intuitive as investing in real estate from a “general investment” perspective. We’ve put together three “Golden Rules” here to not only demonstrate some of the similarities but some of the differences in investing in real estate for short-term growth and investing in real estate for retirement: Read More→

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Last month I wrote about how you could use the right of rescission as a silver bullet to stop a foreclosure in its tracks. Once you drop a notice of rescission in the mail, your loan has been nullified as a matter of law and the bank must either comply with the rescission or prove within 20 days that they have the right to enforce the note. Well, over the last few weeks I have been seeing more and more from the banks that the right of rescission has them on their heels. The banks are sending their lawyers around their offices explaining exactly how rescission leaves them vulnerable.

The main point that the lawyers are making to the banks is that mailing in a notice of rescission is all it takes to cancel a borrower’s loan, note, and mortgage. The notice is effective from the moment it is dropped in the mail as an act of law. This was written specifically into the Truth in Lending Act (TILA) so that homeowners wouldn’t have to use an attorney to act on their behalf, thus restricting the remedies provided by TILA to borrowers who can afford an attorney. While the note is canceled immediately as soon as the notice is dropped in the mail, the bank has 20 days from the date of receipt to respond. This is a good reason to send the notice with return receipt requested. This provides you with proof of the exact date the notice of rescission was received. Read More→

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Wholesalers send me deals daily but I have started to notice that many of these wholesalers are wholesaling another wholesaler’s property. Before proceeding, I want to be clear that I have no issue with this but there is a right way and a wrong way to go about it. Also, understand that if a buyer/investor receives the same property from multiple sellers he/she will contact the seller with the best price. Wouldn’t you? Keep in mind that you did nothing to acquire this property. You merely sent it out to a buyers list you put together, which with today’s technology takes only a few minutes. So what should you avoid and what should you do when wholesaling a wholesale?

Let’s list a few of the major DON’TS:

  • Don’t wholesale another wholesaler’s property without permission. It is best to ask and establish a long working relationship with that wholesaler/seller. Just imagine if you end up having a buyer for the property but the wholesaler/seller has sold it or maybe he/she is not interested in working with you. It is best to get all this out of the way first.
  • Don’t add on a ridiculous fee to the price if it is not justified. The last thing you want to do is be known as the wholesaler who markets deals with very little to no potential profit. What’s worse is if the property is being shopped by multiple wholesalers in the market area and your price is the highest.
  • Don’t waste time marketing another wholesaler’s “deal” until you have seen a contract. Many times a wholesaler will claim to have a deal under contract but in reality he/she is still just waiting for it to be executed. Pre-marking is fine but don’t spend too much time on it until you see a contract.
  • Don’t contact the original seller of the property. If you run across the seller at the property and want to know more about the condition of the property or the neighborhood that is fine. However, do not discuss price, closing dates, mention wholesaling, etc. These are items you discuss with the wholesaler/seller you are working with. The last thing you want to do is jeopardize another person’s contract or be accused of trying to go around the other wholesaler to contract the property yourself.

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