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Today I read an article written by Harry S. Dent who is a famous economist. Mr. Dent is predicting that the Dow is going to tumble down as much as 60% to 6,000 then ultimately tumble again to somewhere around 3,300. Mr. Dent predicts that Gold will fall to $750/ounce and crude oil will eventually fall to $10 per barrel and unemployment will skyrocket, he quotes “It’s going to get ugly”. Mr. Dent predicted the 2008 financial disaster and has been correct about many financial issues over the past 10 to 15 years.

I’m not an economist but I know that we, in the business of houses, have always survived through every cycle the economy has ever thrown at us. Even during the great depression of the 1930’s landlords who had affordable housing survived through those tough years. I believe the secret of being able to keep our properties and even make money in tough times will be based on not so much how much debt we have on each property but how much our monthly mortgage payment is every month. Whether you plan to keep any property as a rental or you plan to sell a property with seller financing terms I believe this will be the key to your survival and ability to prosper in a down cycle of the economy.

A problem I am seeing today where newer investors are concerned is they have no skills talking to sellers. For the past 15 years money has been easy to get for most real estate investors until 2008 when the market dropped out of sight and many investor/speculators lost most, if not all of their properties to foreclosure. Because of the looming market predictions I believe every real estate investor should learn the skills many of us have used for years to negotiate our deals with the sellers directly. I see all too many investors who continue to throw dollars at deals hoping they can get property for CASH. The problem, not all investors have access to unlimited funds to buy property. Read More→

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This month I’m going to give you the other houses I believe you need to avoid if you plan to buy and sell real estate quickly and profitably. I feel very strongly that you need to know about each of these houses so you never find yourself trying to rent or sell properties that just won’t sell. All of the houses I mention have very difficult issues you can’t easily overcome. Why would you want to buy one of these houses when there are hundreds of houses that do not have these issues?

Houses Where Someone Was Murdered or Committed Suicide.

I won’t buy these houses because I fear if a new family moved into a house where someone was murdered or committed suicide without knowledge of what happened there and the children at school were to tell the new children now living in the house what actually happened could cause trauma for the children now living in the house and I don’t want to be responsible for doing that to the kids.

Houses That Are Just Plain UGLY.

Ugly will always be difficult to rent or sell and will be far more costly to correct the problem. When you find a house that is just plain ugly turn and walk away. There are thousands of houses for sale, so why would you want to waste your time trying to completely overhaul an ugly house when there are plenty of pretty houses available across the country? Read More→

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This month I decided to share with you my thoughts about some types of property you may want to avoid if you plan to maximize your profits from the deals you do. I have personally bought several of the houses I now recommend you think about not buying. I believe buying any of the following properties will definitely give you a financial seminar you really don’t want to take for numerous reasons.

I have taken a few of those financial seminars and I can tell you that you don’t want nor need to go there and make the same mistakes I have made. For those just getting started in the business these examples are a must for you to know so you don’t buy houses that will be extremely hard to sell or rent.

This is a two part article for April and May. 

Houses in Area’s with Many “FOR RENT” signs.

Any house located in an area with many For Rent signs leaves little hope of selling to a family who wants to live in that area and can qualify for a loan. Too many renters in any neighborhood will many times run out the families with small children who can qualify for a loan that want to buy. Read More→

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Last month I mentioned I had discovered that every property I drove past was one of four different types of houses every investor needs to be able to quickly recognize if they want to increase their bottom line every year. This month I will explain two types of houses that can really increase your income every year.

I struggled for years to find properties that would allow me to make enough money to feed my family and pay my bills. I had no idea what I was doing or what I was looking for. All I knew was I was trying to buy any house I could find just to make money. I struggled to figure out what I should look for so I started buying houses that I could fix and sell retail. This was a good idea but I could only do a few of these houses each year because I did my own rehabs at that time. It was taking long periods of time to fix and get every property sold and I kept running out of money. It was always a struggle to pay the bills each month. I wasn’t getting checks from my closings very often. All I could do was try to buy houses I thought would make me the most money.    Read More→

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I recently had a telephone conversation with one of my students who asked me what I thought was going to be the next best strategy to use to do more deals in 2014. My student is thinking the market is making a real come back. He is very excited because he is seeing house prices starting to go up, house sales are increasing every month and he had just been told by a traveling Guru that the market has huge profit potential and the market is headed back to 2006 price levels just like it was before the crash.

I can truly appreciate his bright eyes and positive enthusiasm. This student is someone who spends time and money constantly in seminar land listening about the latest niche that will be the next million dollar method for investors to create wealth. I must admit that some of the most recent strategies being pitched could, if done using thorough research and use the correct paperwork could be profitable. My problem with all of these new strategies…. Most of these new strategies aren’t really new. Many have been around for years. The problem, many new investors quickly bore with each strategy as they hear about the next great money making idea that is making investors wealthy. Most of these new strategies will require large sums of money to learn and implement. As market conditions continually change another will soon appear and the investor is again quickly off in a different direction without perfecting the last. Read More→

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A few weeks ago I attended a weekend training put on by, who I believe is the most creative and knowledgeable real estate investor and teacher in this country. The training was put on by Peter Fortunato. Peter spent two days with his class explaining how dozens and dozens of deals he had helped structure without the need for institutional financing or credit. It truly amazed me how he never completed any of the deals he spoke about in the same way twice. Each and every one of the deals was structured in a way to achieve a specific objective. In other words, each deal was structured to come up with exactly what his or the seller’s goal was at that time.  

Some deals were designed to minimize taxes, some were designed to maximize cash-flow, while others were designed to overcome some type of problem the sellers were facing and thought they had no solution to their problem until they talked to Peter. Peter, who is considered the master of “Doing Things on Purpose” would create deal structures that solved the problem at hand. His work has amazed me for years and when I take one of his classes I become even more amazed how anyone could create the deal structures he does. Read More→

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Here it is almost the end of another year and it’s time to ask yourself again, was this a prosperous year for you or not? If you feel that you haven’t had as prosperous of a year as you might have wished for you may want to ask yourself what you could possibly do differently next year to achieve your financial goals. 

What are you thinking might be your problem or don’t you think about it? Did too much life get in the way, or were you too busy to make offers? You didn’t make offers because you couldn’t find any good deals, or you couldn’t find the money you needed to complete but a few transactions, if any? Did you have too much competition in your area, or were the prices simply too high and good deals evaded you because other investors got to the good deals before you and scooped up those good deals? Whatever your reason don’t you think it’s time to come up with a new plan that will allow you to capture some of those good deals others are so proud of?

In just a few weeks it will be time to make another New Year’s Resolution so if this hasn’t been what you had imagined as your most prosperous year, I thought this would be the perfect time to think about making some changes in your real estate business. One thing I can tell you for sure, there are good deals everywhere you look. There are plenty of good deals if you know what to look for and understand how to profit from the deals you find. So let me ask you, what does a good deal look like? Could it be a good deal simply because of the price you have to pay for the property? Could it be a good deal because of the payment amount you can negotiate with the sellers that will allow you to cash flow the property? Could it be a good deal because of the neighborhood the property is located in? All of these can be good reasons why you might have a good deal. It’s a good idea to know why any deal you do is a good deal in your eyes. Read More→

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Recently I was talking to several of my students who each said they wanted to buy 100 houses next year. These students had listened to one of the gurus who had bought and sold over one hundred houses in one year and is now teaching people how to duplicate what he had done. I listened closely to these bright eyed, inexperienced students tell me they wanted to do the same as the guru, which frightened me to death. Later over dinner, I mentioned what I had just heard to my wife. She encouraged me to tell my tale of woe about the years of agony we experienced because I got too big for my britches and against my wife’s better judgment I had tried to do the same thing myself.

What the students were thinking about doing frightened me because several years before I thought I knew enough about buying and selling houses that I could easily buy 100 houses in a year. I thought it was a noble goal and I clearly believed I could create my fortune in months, not years. At the time the market was right to be able to buy houses at the rate of 100 houses per year. That is why I want to tell my story so every overzealous beginning investor will think before they set about to try to do the same. Read More→

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I spent the last weekend attending a training event put on by one of the premier real estate teachers in the country today. As I listened to her teach phenomenal content, I kept hearing her talk about the MAO formula to determine the most that anyone should pay for any property. The basic MAO formula is… “The After Repaired Value of the subject property X 70% less Repair Costs = the most you should pay for any property” when using institutional or private financing.

As she talked, I kept thinking to myself, what if the buyer can’t qualify for institutional financing? What if private financing isn’t possible either? What if the buyer doesn’t have someone lined up who can get institutional or private financing? If that is the case what good is the MAO formula to the buyer?

Sure, I know the buyer could use a Hard Money loan to fund their deals and there is a formula for getting a Hard Money loan too. The basic Hard Money formula used in my area is… “The After Repaired Value of the subject property X 65% less the Lenders points and fees = the most that can be borrowed on that property”. The biggest problem I see using Hard Money loans is if the borrower can’t get the property they are buying resold quickly. Most hard money loans are short term, usually one to two years in length and if the property hasn’t sold and the Hard Money loan becomes due and payable, the borrower may find it impossible to find other financing to replace the Hard Money loan and could lose the property. Read More→

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If I could wave a magic wand and re-live my early real estate investing career from the beginning, I think I would first try to learn more about what seller’s needs and thoughts are. I would also want to better understand the thoughts and logic that run through a seller’s mind when they are motivated and want to sell their house.

If I had a better idea of what the sellers wanted it will be much easier to make offers the seller might be happy with and hopefully get them to sell me their house at a price and terms I’ll be happy with, and they will get what they want and also be happy with. If I had only known what I know now it would have been far more profitable for me and my family.

I shudder to think of all of the lost deals I have had simply because I never stopped to think about what the seller’s needs were? My thoughts were usually about how I could make a killer deal for myself. This was not the best nor the most profitable way to make money buying real estate. You need to take a minute, step back and analyze what the seller’s wants or needs are, (or at the very least use a little logic to try to think about what the seller might want or need before making them an offer) you are making a big mistake. If you think about what the sellers needs are you will have a distinct advantage while actually sitting face-to-face with them and are negotiating. If you will do this, at least you would have a direction to start going in.

As you talk with the seller and start to ask them the important questions you will start to better understand what is motivating them to sell. If you don’t ask the important questions you’ll never get the answers you need to put together a profitable deal – a deal which is good for both you and the seller. Let me explain… Read More→

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Hello fellow investors,

I hope you enjoyed the 4th of July last month and took a moment to think about the fact that this country has fought many wars to give each one of us independence and the ability to create and do business as we wish with unlimited income potential. In this country our income is only limited to our vision and our determination to succeed at what we choose.

As the year goes on I am getting reports that many of my students are doing deals and starting to make some serious money, and I’m not talking about doing short sales or wholesale deals exclusively. One of my students found a seller who has 80 free and clear houses they want to sell and are willing to do seller financing terms. My student is cherry-picking the deals she wants and is finally deciding that sending letters is a good thing not a laborious waste of time. Three of my other students who are working together have bought 40 properties since the first of the year all with seller financing terms and many with zero percent interest rates and monthly payments as little as $200. I had lunch with another student from Missouri yesterday who has four properties ready to close in less than a month and one of the properties doesn’t have a monthly payment due for 12 full months and zero interest. All of these deals my students are doing are coming from their letter campaign sending letters to “Non-Owner Occupied – FREE & CLEAR” Property Owners. Read More→

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Hello fellow investors,

Now that summer is officially upon us it’s time to do some serious thinking how to maximize our profits over the next several months in the most effective ways. A few years ago I noticed another investor I knew who became very intensively busy starting in late March and early April. One day while we were having lunch I asked him why he did most of his deals in the summer months. He gave me a very well thought out and profitable explanation of his strategy, why he used it and how profitable, if done right, his strategy could be.

With so many schools continually receiving poorer evaluations, for many parents sending their children to good schools is becoming more and more important in today’s world. My friend explained that as the school year draws to a close and summer is quickly approaching that many parents start to look for areas with the best school accreditations to send their children and find a house to rent or buy. Once he explained what he was doing I started looking for three and four bedroom houses in the best school districts where I could buy houses affordably I could fix and rent or fix and sell to these families. I started looked for houses in those area’s that needed some cosmetic work done to them that I could buy at an affordable price or with terms that would allow me to make a monthly profit no matter what I did with the houses, rent or sell. Read More→

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