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The Biggest Real Estate Myth

Posted on September 2, 2014 by

Duncan WiermanWe all think we’re in the real estate business.  That is a fundamental mistake!

It’s true that we have checks written to us in exchange for services of buying and selling houses, so it’s understandable to think we’re in the business of real estate.

When someone at a party asks what we do, we naturally say “I’m in real estate” So when we look at growing our businesses, we look at what we do for the levers. And that’s the mistake.

You’re not in Real Estate!

You’re in the business of “marketing your real estate abilities”

When you really understand this, a whole new world of possibility opens up.

Here is the TRUTH: Read More→

Working Healthy Now

Posted on September 2, 2014 by

The first wealth is health.” ~ Ralph Waldo Emerson

Fall is in the air. Before you know it, Halloween will be here. Then Thanksgiving. And Christmas, and New Year’s, and Martin Luther King Day. And Valentine’s Day! Oh, my gosh! it’ll be swimsuit season soon, and I’m not ready!

Sometimes it seems like we live life in the future, doesn’t it? It’s fun to think about that vacation coming up next spring, and it can be daunting to think of all there is to do tomorrow. But rewards in the future require action in the present. Nowhere is this more true than when it comes to our health. It’s all about nutrition and exercise, and it’s all about now.

Real estate does have its physical side – anybody who’s ever slithered through a muddy crawl space knows this. But to a large extent, our profession is pretty sedentary. And as technology allows us to do more and more from our computers and smartphones, it gets easier to sit for longer and longer periods.

My Uncle Fergus has turned sitting into an art form. I’ll bet you know somebody just like him: If you were to turn his computer keyboard upside down and shake it, you’d get enough crumbs to coat three chicken thighs. Uncle Fergus can open a beer, grab a handful of Cheezy Wiggles, and write a notice to vacate without so much as turning his head. I’m pretty sure he hasn’t walked to the end of his driveway in at least six months. He tells me he’s going to start eating right and exercising soon. Yep. Just as soon as he feels like it. Technology has given him the ability to be a true man of leisure. Read More→

Knowing When to Move On!

Posted on September 2, 2014 by

There was once a great and powerful king, King BOB. He had everything that a King needed or wanted. King BOB had real estate, cars, money, jewels, wine, and a Queen. One day, a gardener came to offer his services to King’s gardens, so King BOB hired him. The Gardener brought in exotic plants and trees and planted specimens that no one had ever seen. When King BOB gazed upon the palace gardens, his mind was taken to great places of beauty and peace. King BOB, while walking his garden, began to consider new frontiers. His mind often wandered to continents yet unconquered.

Little did King BOB know that he was being challenged by the lowly Gardener. He was being introduced to a new spirituality, new wealth, and new ideas. He began to feel inferior to the challenges the Gardener was presenting. The Gardener, on the other hand, was doing what he felt the land needed. King BOB’s mind was now unsettled; he reconsidered his values, goals, and purpose.

Meanwhile, other leaders were envious that King BOB had such a vast and enchanting garden. This made King BOB feel great and more powerful. He became known as the Great Arborist, the Supreme Real Estate Investor and Entrepreneur. He was no longer just a great leader or counselor; he had reached new heights. Even the Gardener became famous. There were great leaders from all nations who wanted the Gardener’s services. Read More→

Last month, we talked about locating buyers and finding out if they had any money and/or credit, which is the definition of prescreening them. In this issue, the next step is getting them to the point to where you have a meeting of the minds and collect a deposit so you’re only a few days away from either lease optioning it to them or selling it with owner financing. Of course, this is assuming that our exit strategy is either lease purchase or seller financing. If it’s not and your intent is to cash out with a qualified buyer, your mission is to simply determine that their credit is good enough, which is usually a credit score of 620 or better, and/or their debt ratio is good enough and they have enough down payment to satisfy FHA or the lender’s needs. This is done by putting their application in the hands of your mortgage originator and letting them come back to you and tell you whether they will qualify or not. Once that’s done, on these cash buyers, it’s just a matter of setting up an appointment with the loan originator and letting him get the application and take it from there.

But in the case of seller financing or lease purchase, now it’s up to you to be the loan committee, and to do that you’ll need to have collected the facts and then have the meeting, get the commitment and set up the closing; we can do this all in one meeting. Before you call a meeting with the potential buyers, you should know how much money they have to put down, what they can afford per month and what their credit score is. Of course, all these numbers have to be satisfactory to you. Once you have arrived to the conclusion that you like this potential buyer, you then set the meeting. This is where you will determine if they have any more to put down and if you can get any more per month from them, and make sure there’s nothing about them that turns you off so bad you do not want to move forward. Read More→

Making $13,000 With No Money Invested

Posted on September 2, 2014 by

Want to see how to make $13,000 in two short weeks with no money invested and without owning the home?

With creative real estate investing, Jack Miller taught us to structure on purpose. Pete Fortunato taught us to use what we want, to get what we need, to get what we want. Let’s take a look at these two all-important lessons in action.

Jonathan and Christie help us maintain some of the rental properties we manage. About a month ago, Christie told Kim that her mom wanted to sell her home in Acworth, Georgia.   After meeting with Christie’s mom, Kim determined that the home was worth $90,000 and needed a $10,000 rehab. Kim offered either $63,000 cash or a $90,000 owner-carried note with payments of $300 per month, but the mom turned down both offers.

Kim then asked, “What’s the house of your dreams?” The mom answered, “One out in the country.” Unfortunately, we didn’t have any such property available.

The next day, Kim had an idea. Our friends Joe and Ashley English had a house on the outskirts of Adairsville that had just gone up for rent. Kim called Christie’s mom and asked, “How would you like to trade your house in the city for your dream home in the country?” The mom got so excited at the idea that she loaded up her family and immediately drove to the Adairsville house. She LOVED it! She agreed to a trade. Read More→

Unplugging… To Recharge

Posted on September 2, 2014 by

As I write these words, the summer is almost over. School has already begun in many places throughout our country, and will soon start in the rest. Vacations have (hopefully) been taken, and before you know it, it’s back to the ol’ grind again. Yay!

So, have YOU taken a vacation? Did you have the chance to get away and do something fun, relaxing, or otherwise fulfilling this summer? If not, why not? There have been countless studies done and research conducted that prove that people who take the time to take vacations live longer, happier, and healthier lives. Google that if you don’t believe me.

It wasn’t too long ago (when I was -gasp- working a full-time job) that I started to get burned out from it. I began hating the thought of going there and facing certain people again, and even the activity of what I was doing started to get on my nerves. The funny part is that my job at the time was the best ‘job’ I’d ever had: I was a Ballroom Dance Instructor!

I remember asking myself, “Why am I feeling this way about what I’m doing?” Then the thought hit me: I realized that I hadn’t had a vacation in 6 years! Like a lot of people, I was simply working too hard to think about it. I immediately set one up – a week at the beach – then planned it out & went. Read More→

This is the final part of this article but it is not the end of the mistakes I have made negotiating with sellers through the years. I will continue to provide more negotiating ideas for every serious investor who realizes that negotiating directly with the seller is where the most money will be made.

  1. Being Inflexible – can you imagine a real estate genius like me passing on a deal just because the sellers and I were $500 apart on the price? Even at the higher price it was still a good deal for me but my pride and ego wouldn’t let me give in and do the deal because I wanted the deal to go my way and the sellers wanted the deal to go their way. I can’t believe I was that immature that I let a beautiful asset like that house slip away over $500. I have learned over the years, there is no place in this business for your pride or your ego. If you have negotiated a good deal get the deal closed and enjoy the benefits that property will give you and your family. Read More→

There are lots of great ways to make a lot of money in real estate, not the least of which is buying and selling vacant land. This is an effective way to do real estate deals with no hassle, no rehab, no insurance and no worries of vandalism and theft. Plus, there is virtually no competition for these properties since many investors are simply not going after this incredibly lucrative portion of the market place. I was actually in the real estate business for several years myself before I discovered this very profitable part of the market. In addition, in this current market buying and selling vacant land is another good strategy to continue making money in the real estate business.

If you live in an area that is particularly rural, then buying and selling vacant land is a more lucrative means of doing real estate deals. Since it can be more difficult to find homes to purchase in more rural areas, vacant land is definitely the way to go. There are several different ways to find vacant land deals.

One is to simply drive around and look for them. However, since it can be kind of difficult to find addresses for properties this way, it is probably a much better idea to create a direct mail campaign to the owners of vacant land. Some of the parameters I use for this list are out of state owners of vacant land, especially those with past due tax bills or folks who have inherited vacant land. These are some of the most lucrative deals out there. Be especially aware of those properties that front main highways since these will create even more valuable deals for you. Read More→

All Investors and Realtors need to know the guidelines of their Title Company’s requirements for buying and flipping short sales. Each Title Company may have one or two underwriters which tell them how to conduct their business. I am a firm believer in having all my i’s dotted and my t’s crossed with full disclosure. Whenever I want to use the end buyer’s money to fund the first transaction “A to B” closing, I have already sent all my forms to the Title Company to send to their underwriter to review. This way, I will not have any problems when it is time to close. Some Title Companies will require additional documentation and others approve my forms and are ready to close, saving you points and interest on hard money.

Recently though, I had a short sale closing set on Friday with a Foreclosure Auction set on the following Tuesday, leaving 3 days after the closing to get them the money (which must be certified funds), and have them stop the Foreclosure Auction Sale. Obviously, when purchasing short sales, we don’t want to procrastinate it to the last minute due to the new guidelines with the Florida statutes about the timeline for postponing Foreclosure Auctions. These guidelines of making sure that the Plaintiff’s Counsel and/or the Defendant’s counsel has filed a Motion to Cancel Sale at least 10 to 15 days prior to the actual auction make it difficult to get Fannie Mae and Freddie Mac to act due to the fact they follow that guideline. Meaning, if you have passed the window of the 10-15 days and it’s down to only 8 days before the sale date, they will say you missed it and it’s too late to request postponement. However, there are times when “stuff” happens and you close within that 10-15 day timeline, not giving the Plaintiff’s Counsel enough time to get a Motion to Cancel heard before the original Judge. Our court system has turned into a mill! Even if both parties agree, Plaintiff and Defendant, they are having a hearing before the original Judge. When I worked for attorneys, all you had to do was prepare a Stipulation and Order of Postponement and/or Cancellation, both parties would have agreed and the Judge would sign it without a hearing. I believe the Plaintiff’s attorney just likes to charge the bank more money for representation and this would be too easy for all parties. The Foreclosure Auction could be held on line or before a different Judge that does not know the Seller’s situation, nor do they care. Many times, if the Sellers wait to file their Motion to Cancel in Pro Per (acting as their own counsel), the Foreclosure Auction Judge will deny it versus the Judge who has heard their case all along. Read More→

How to Close 10 Wholesale Deals in 1 Day

Posted on September 2, 2014 by

It’s pretty easy actually. Get (“contract”) (10) unwanted houses from a seller at a great price and turn around and wholesale all (10) to a cash buyer. Boom – easy right? We’ll of course it’s never THAT easy. What if it was your 1st deal ever? That would be scary. What if it was your 6th thru 15th deal? That was my scenario. But I did it. And you can do it too – because I knew practically nothing when I did it – had done 5 deals at that point. So how is it possible?

Well it was around November timeframe (2012) and we had just done our very 1st Wholesale deal a few weeks prior. Our 2nd deal was with a guy who had (13) or so rental properties down in the “South Side” of St Pete, which is a very rough side of town for the most part and you can get houses pretty cheap. We had done a lot of “driving for dollars” in the South Side and found a house and sent a letter to the owner and they called us off of our letter. I think he said he would sell the house for $20K, so I went and looked at it. It was terrible! Terrible, terrible house! Old, rickety, wood frame, termite infested, tiny house in the rough side of town. So I offered $11K and we finally settled on $13K I believe. I wrote up the contract and would close in a few weeks. He also mentioned he had (12) more houses and he’d be interested in selling them all – but he’d let me know about those after we closed on this one. Read More→

Buyers should be extremely cautious about entering into a contract for deed to purchase a property. There are two main reasons. First, it is possible for the seller to lose control of the property while the buyer is making his payments according to the contract. Second, if a buyer defaults he will likely lose any equity developed in the property.

This first reason may seem counterintuitive. But, sellers are allowed to borrow against the same property they are selling under a contract for deed. In other words, a seller can go to a bank and obtain a mortgage on the exact property they have contracted to sell. They are also allowed to borrow against the property without notifying the contract-for-deed buyer.

The lien that a bank would place on the property would be superior to any rights that a buyer would have under an unfiled contract for deed.[1] Thus, if the seller defaults on his loan to the bank while the buyer is making his payments, then the buyer is in trouble. The bank would foreclose on the property, and the contract-for-deed buyer would lose all rights under the contract for deed, including the right to possess the property. Read More→

Self-Directed Real Estate IRAs are a powerful tool that allow for tax-free and tax-deferred profits. In some cases, capital gains taxes can even be avoided when investing within an IRA. Still many people are still unclear on how to transition from investing in real estate outside their IRA into investing in real estate within their IRA. We’ve compiled a cheat sheet summary in this article to serve as a reference tool.

The Account

First and most importantly, you need to open and fund a Self-Directed Real Estate IRA. This involves simply filling out an application which is quick and easy with American IRA [Hint: The American IRA staff will be standing by to help with this]. The second and most important part is to fund your new account. You can fund an account by making a contribution, transferring funds from another IRA, rolling over funds from another IRA, and/or any combination thereof. When transferring from another IRA, it is important that you follow up persistently with your prior custodian to make sure they move your funds in a timely manner [Remember: You are moving money “away” from them so they are in no hurry.].

Finding Assets

Once your account is open and funded, you are ready to find deals on those assets that you want to purchase. Before making an offer on that asset, make sure you review the list of prohibited assets to ensure that the asset you want to purchase is permitted. Prohibited assets include: life insurance, certain kinds of precious metals, art, alcoholic beverages, and collectibles. You also need to make sure you are not purchasing the asset from a prohibited individual including: yourself, your spouse, your descendants, your ascendants, nor their spouses or entities they own or control. Read More→

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