Archive for May 2014

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The May 2014 Edition of
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The Profit Newsletter - May 2014The May 2014 Edition of The Profit Newsletter is available for download just in time for our Atlanta REIA Main Meeting on May 7th. The Profit is an 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.

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Quantum Coincidences

Posted on May 2, 2014 by

Jay ConnerI’ve been known to say that “Coincidence is God’s way of staying anonymous,” and I feel like my life, and my career is proof of that! You may not know it, but I moonlight as a world famous composer. I started writing music at 17, and while I didn’t put out my first album until 1997, it’s always been a passion for me. Back in the day, my grand piano came all the way from Texas to North Carolina in the front of my 72 x 14 single wide—it never left my side.

Getting back to the world famous part, my big break came in a little known movie, an Alan Smithee Film, “Burn, Hollywood, Burn”. While the show itself wasn’t a favorite, my music was! Right after the movie came out, my family and I went on a vacation to California. I’ll never forget my wife pulling me out of the shower one morning in Palm Springs to listen to my song playing on the radio! Today, my compositions are played in stations across 22 countries, and in spite of the 8% rating on Rotten Tomatoes, I still get royalties from my Hollywood days.

Music taught me to follow my passions. I knew that work should be something I could be passionate about, and when I stepped into buying and selling homes, that was exactly what I was able to do—live and work passionately. I like to think that some of my best moments, or “quantum leaps,” come from my moments of greatest adversity. Maybe their power comes from the way they force the best out of you, and I look forward to the challenges – they always bring opportunities for something new!

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Follow Up – Part 2

Posted on May 2, 2014 by

At this point, we’re down to the area where we’re ready to fill out a contract. And we’ll come back to that in step five after we get through the follow up step which is the next one on our list. But before we do all of that let’s talk about the other steps involved in getting to the point where we’re ready to fill out a contract. I guess the first one is knocking on the door at the appointment time you’ve set. What I usually do when they answer the door is say, “Hi, I’m Ron. I’m here to take a look at the house.” They’ll greet you and invite you in and I’ll say, “Can I take a walk through the house?” and they say “Yes” and I say “Okay, no dogs or naked people?” and then they chuckle and say, “No”, and I do exactly that, take a walk through the house.

My walk through the house will take less than three minutes because I’m not going to pick it a part and point out any obvious issues that the seller is already aware are there. If the walls need painted, we all know that, I don’t have to point it out. If the house has an odor, no sense in mentioning it because there’s nothing the seller is going to do about it. Regardless of what the situation is, you do yourself no good by making the seller feel small because of the issues that are readily apparent with the house. The best thing you can do is walk around, take a look, shut up, and get to the next step.

The next step, in my case, is I always simply ask the seller, “Do you have any questions?” If they say yes, I’ll answer them as briefly as I can and go on to the next step. Be careful here, when you answer questions, your goal is to answer them briefly, not get in to a teaching seminar. The worst thing you can do for yourself is get diarrhea of the mouth. Your job is to get in the house, get the job done, and get out of the house. You’re not there to make friends. You’re not there to have a fireside chat. You’re there to answer questions, get an agreement, and leave. And believe me, the seller wants you out of the house probably worse than you want to get out of it. So when you ask questions, answer them briefly, shut up and move on to the next one until they’re out of them. Read More→

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Some Like It Hot: Are YOU Ready?

Posted on May 2, 2014 by

Is the market getting strong where you are? Are you sitting on the side lines waiting for a house to land on you? If you are waiting around, you are not getting wealthy! And I want you to be wealthy! I want you to get in the market through partnerships with an experienced person like myself.

The 1st quarter of 2014 has been very exciting, and with summer approaching, we can anticipate the market getting even hotter than it is now! Areas are turning around, the phantom inventory is shrinking, and prices are rising.

But, you ask, is the housing market out of the woods? Yes and no. There are a few variables that would set us back into a recession causing the prices to drop again which would affect jobs and people’s ability to buy a house. A change in interest rates will affect the probability of people to get into a house and investors to buy with credit.

This all brings us to the essentials: How do you know a great deal versus an average deal? The answer is only a portion of what an experienced partner like myself can help you learn. Read More→

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Direct Mail. Craigslist. Bandit Signs. Websites. Emails. Phone Calls… And everything else that it takes to generate leads – in real estate (or anything else).

These are all fantastic sources, and should definitely be used in your marketing efforts in some combination.

But wait a minute! Even if you’re using ALL these methods already, you may still be missing out on another, just as powerful marketing medium… This ‘missing medium’ will work for you, whether you’re looking for sellers or buyers of property, private lenders, wholesalers, rehabber buyers, or whatever else you can think of!

Of course, this ‘Mysterious Marketing Medium/Media‘ to which I’m referring is: VIDEO!

Let Me Ask You Something… Ever watch a video on YouTube? I’m guessing your answer is yes. These days, you can watch video from practically anywhere – your home, your car, your office, the bathroom…anywhere! When I say ‘you,’ guess who else that includes? Your PROSPECTS & CUSTOMERS! Read More→

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Congratulations. You’ve got a new tablet computer! Whether it’s an iPad or Windows or Android – and I’m an iPad man, myself – buying a new tablet is a lot like having a baby: You’re going to want to buy some stuff to go with it. And boy, is there a lot of stuff to choose from! But it’s easy to get overwhelmed, both by the variety and by the potential cost. Where is your money best spent? Today I’ll talk about some basic extras you’re going to need.

You probably bought your new device at an electronics megastore, or perhaps online. You can get a lot of accessories from the same place. Many of them will be cheaper on eBay, but you’re going to want to play with your new tablet right away, and it needs some immediate protection. That’s reason enough to go ahead and buy a couple items right then and there, even if it means paying more.

First, you’ll want a screen protector, because you’ll be messing with that screen a lot, and it’s going to get scratched. Don’t choke at the price. It may well be military grade. Okay, so you’re not in the military, but what the heck, it couldn’t hurt. Be careful putting this thing on. It takes a steady hand and some patience to get the bubbles out. 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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Another way I use to fund my deals is by utilizing money from private lenders. Hard money lenders and private lenders are distinctly different in their approach to lending you money.

A private lender is a person who will fund your deals usually with no points and a much lower interest rate. There are usually no pre-payment penalties and they are usually more flexible with regard to the terms of the loan. For example, they may allow you to pay part or all of the interest payments at the end of the loan. So the cost of the money is a lot less in the long run. Working with private lenders offers me a lot more flexibility as a real estate investor, so if a private lender will allow me to pay all of the interest at the end of the loan for example, I may offer them a higher interest rate or maybe a point or two for allowing me to pay at the end. If I can pay all of the interest at the end of the loan, then the property cash flows at one hundred percent each month. This gives me the opportunity to fund multiple rehabs at the same time without having to worry about monthly payments. Then once I sell the property the private lender receives the principal amount they loaned me and all of the interest that has accrued.

There are several ways for you to find private lenders for your real estate investing business. One way is to simply check with people around you (relatives or friends) who may have funds available that are not drawing a very high interest rate in a CD, IRA or money market account. In today’s market that shouldn’t be too difficult. I have found several of my own private lenders this way. Read More→

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In part two of my article series on the contract for deed, I promised to discuss the most popular remedies a seller can select when a buyer defaults under a contract for deed, including the risk the seller may owe money to the buyer when the buyer defaults.

The most popular options when a buyer defaults under a contract for deed are (1) to rescind the contract and evict the occupying party or (2) to rescind the contract and repossess the property (if it is vacant).  However, when the contract is rescinded, the law requires that the parties be restored to their original status.[1]  In the context of a contract for deed, restoring the parties to their original status means following a restitution formula.  In accordance with the formula, the seller must account to the buyer: (1) all payments made, (2) the value of improvements made, and (3) damages incurred.[2]  Let me give an example:

Suppose Buyer Bob buys a property from Seller Sally using a contract for deed.  The market rent for the property is $500 per month.  Bob and Sally agree that Bob will make a $10,000 down payment and make payments of $1,000 per month for five years.  At the end of the five years Bob will receive the deed, free and clear.  However, two years into the agreement, and after Bob has spent $5,000 renovating the property, he defaults.  In response, Sally decides to rescind the contract and evict him.  Sally is legally entitled to do this, but now the parties need to be restored according to the legal formula – which means she must give an account to Bob. Read More→

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The Reverse Mortgage (RM) market has had massive growth in the last decade. This phenomenon makes ripe a great opportunity for investor success as Americans live longer.

Basically a RM it is a product to help seniors finance their retirement in an age of longer lifespans, long-term stagnant wages and fewer younger workers to fund public and private retirement programs. An RM is similar to a refinance but different in that a monthly payment from the overall principle is paid monthly like an annuity.

Frankly, a significant group of older Americans just don’t have enough to retire. Thus, an RM is a product that needs to exist. We as investors come in when the family member who has to sell the house to cover the principle which was utilized up to the time the family member passes away. Believe it or not, this is literally happening today.

For those of you already connected to REIAComps , the control and feeling of confidence you have over your deals is priceless. Add these new Reverse Mortgage deals to your tool belt and it gets even sweeter. Using REIAComps to investigate the value of houses as they come to market, against other less reliable sources continues to be a no brainer. Read More→

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Dung Beetle Meets Honey Badger

Posted on May 2, 2014 by

My plan for 2014 is to spend a lot of time traveling the country teaching real estate investors how to knock on sellers’ doors and creatively structure and fund deals. 

The Alpha and Omega of successful real estate investing is to get face-to-face with sellers on a regular basis and make lots of written offers.  Nothing an investor does is more important than this.  And for the past nineteen years, I’ve proven time and again that the fastest, cheapest and most effective way to get face-to-face with sellers is to simply knock on sellers’ doors – eight out of ten sellers will invite you in!

The skeptics – and there are many – say, “Bill, that door-knocking thing may work in Georgia, but it won’t work in (insert whatever state you want).”  The thing is, since 1978, I’ve traveled around the country (and most of Canada) making a living by knocking on homeowners’ doors.  The truth is, people are the same everywhere – wonderfully kind wherever you go!

I told some investor friends in Tampa, Florida that I’ll be heading down there soon.  A texted message came from Timber Benning, a real estate investor in that area.  Her text read: Hey Honey Badger, when you come down, please keep me in the loop for your door-knocking extravaganza.

Honey Badger?  What in the heck is a Honey Badger?  I called Timber and she explained that at Wayne Arnold’s Exchangers meeting in St. Pete, he told his folks that I was coming down and that they should spend some time door-knocking with me.  He said that when it came to door-knocking, I was like a Honey Badger. Read More→

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Your First 90 Days in Real Estate

Posted on May 2, 2014 by

Are you just getting started in real estate or are you thinking about getting in? This article is to help you get off to a great start in the business.

Step 1

What are you trying to buy? Do you want to start small such as single family houses or smaller multifamily such as 2-4 units? Maybe you want to go big early and get into commercial real estate such as apartment buildings or self-storage.  Whatever your goal is, you need to start with an education. Find material on that type of asset that will teach you the basics of what you need to know.

Step 2

Know your market. Now that you know what you want to buy, you need to know where you are going to buy it. You need to decide on a market or city. My suggestion is to start in your own backyard. I define “backyard” as the area within a 1 hour drive from your home. The closer to home you can start the better. The more travel you have to do to get to your property, the more obstacles will get in your way. The cost of travel goes up (possibly plane tickets) the farther away from home you get as well.  Lenders and investors get a lot less comfortable with your deal as the distance from you increases.

Once you have picked a market you will need to study that area. Here are some things to know… Read More→

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