We’ve all heard the wise, old saying: Save for a rainy day.  Dave Ramsey calls it an emergency fund.  Whatever you call it, it should be enough cash to support you and your family for three to six months.  Because these funds need to be liquid – in case of an emergency, you want to be able to get to your money quickly – it’s best to keep this money in a money market account.

This morning, I met with a couple of other real estate investors to discuss year-end and 2013 tax strategies.  Part of our discussion was about our emergency funds and the question of when is enough really enough?

Right now, if you’re lucky, your money market accounts are paying a whopping 0.9%.  This means that if you have $10,000 in your emergency fund at the beginning of the year, by the end of the year it will have grown by a whopping $90.00!  Oh be still my beating heart! Read More→

The December meeting of North Georgia REIA is one of our favorites.  Real estate investors from around Georgia, Tennessee and Alabama show up to answer this question: What was your best and/or worst deal in 2012?

Why is it such an important question?  Because one of the best ways to learn how to be a better, wiser investor is to learn from the experiences – both good and bad – of other investors around you.  This keeps you from trying to reinvent the wheel.  Remember the old saying: A smart man learns from his mistakes.  A wise man learns from others’ mistakes. 

During the meeting, the first thing we determine is how the deal was found.  You quickly realize that there’s not a “the” way to find a profitable investment property.  Some folks knock on sellers’ doors.  Others do lots of internet marketing.  Then there are mail-outs and the foreclosure steps.  The list goes on and on. Read More→

I was born a blonde, but as I got older my hair turned auburn(ish).  When I was diagnosed with cancer, my sister colored my hair red to give me a much-needed lift, both mentally and physically.  But now that I’m pushing 55, my hair is turning grey and I find that it’s harder to keep it colored red. 

Ah, everything in life changes, doesn’t it?  If we are fearful of change, and reject it, then we miss out on so many great opportunities.

Change is happening to our real estate business, as well.  Years ago, Bill and I worked hard to buy properties before they hit the ‘steps’ at the foreclosure auction.  We dealt face-to-face with homeowners in distress, and really worked our ‘deal-structuring’ muscles to find ways to purchase homes prior to the auction. Read More→

You’re probably asking “Are you really gonna talk about financial calculators?” and thinking: Yawn, yawn, yawn – wake me when it’s over!

Here’s the thing: Our real estate investors group is geared for experienced investors.  To master creative deal structuring and financing, we all need to know how to speak the same language.  A great communication device that accomplishes this task is a financial calculator. 

Remember, a financial calculator is about MONEY, not math!  Knowing how to make it sing and dance is critical to achieving financial freedom.  I promise, once you know how to use a financial calculator, your real estate investing world will never be the same.  Plus, you will be head and shoulders above most any investor you meet – including the so-called gurus!

Let’s use a financial calculator to answer this interesting question:  Can you become a millionaire by delivering pizzas part-time for five years?  If you think you can’t, then you’d be W-R-O-N-G!  Read More→

Something new and bizarre is happening at the foreclosure auction in Bartow County.  It seems to be a seismic event that marks an increase in the price properties are selling for on the steps.

A few months ago, a different kind of investor showed up at the Bartow County auction.  Their mission is to buy around 200 properties a month in the Atlanta area.  One company buying two hundred properties a month is unheard of in Georgia!

The buyer is some sort of investment company that controls a conglomerate of money.  Here’s how it seems to work: The investment company has a good number of folks pool their money into one pot.  I understand – but have not confirmed – that these money-partners are promised a return of around 8%.  This is a much higher yield than they can get at a bank.  The investment company uses these funds to purchase property at foreclosure auctions.  Once a property is bought, the exit strategy is to find a tenant for the property and manage it as a rental.  One day, when property values return, I’m guessing the company will sell these rentals for a nice profit.  It’s an interesting business model. Read More→

Just mention tenants and rental property at a party filled with “normal” folks and the partygoers scatter like mice after the lights go on.  POOF!  They can’t get away from me fast enough!

I don’t get it.  Many folks can’t retire because they’re broke.  They’ve worked their whole lives and have little to show for it.  Lord knows, getting a $1,000 Social Security check every month isn’t my idea of a retirement plan.  However, receiving $15,000 a month in mailbox money is a lot more like it – don’t you agree?

People often point to the downside of being an investor – tenants.  True – if you put a bad tenant in your house, then you’re not gonna have an enjoyable time.  The other side of the coin is this: Most tenants – if you screen them properly – are easy to work with, take great care of the property, pay their rent on time and are good neighbors. And here’s the best part – you get to choose which tenant – a good one or a bad one – goes in your investment property! Read More→

Just finished having a nice lunch with two experienced real estate professionals.  One was a realtor, the other a mortgage broker.  To be specific, they wanted to know how quickly I thought property values would rise from this point forward.

All real estate is local.  Just because values may be skyrocketing in New York, it doesn’t mean they’re also skyrocketing in North Georgia.  These are two completely different areas.  Thankfully, in Adairsville, we’re not covered up with hard-to-understand Yankees!

Home values have been dragging along the bottom for about a year.  I explained that values would rise only after the excess inventory was gone.  They stated that there wasn’t any more excess inventory in Cartersville, Georgia.  I asked, “How did you come to this conclusion?”  “We read the paper and watch TV news,” they replied. Read More→

She rang the doorbell and silently prayed for guidance: “Lord, help me to say the right thing.”  The homeowner answered and invited her in…and she started yakking.  Yak. Yak. Yak.  She yakked about her experience in real estate, her precious dog and her friend’s struggling business.  The homeowner listened patiently, even offering encouraging words of advice.  When the meeting was over and she walked to her car, she realized that she knew nothing about the homeowner’s situation and hadn’t a clue how to help – but the homeowner sure knew a lot about her! 

That ‘she’ was me, sixteen years ago.  Understandable, since I was a newly minted investor.  But the sad thing is, that ‘she’ was also me last year, when I ventured out into the field after six years of sitting behind the comfort of my desk coordinating short sales.

I can’t tell you how many houses I’ve walked into – homeowners I’ve talked to – only to screw up the deal because I talked more than I listened.  Ugghhh!  Nervous energy would override my brain and cause my mouth to go into overdrive.  I would yak, yak, yak and not learn a single thing about the homeowner’s situation.  Then I would try to structure the deal!  Well heck, NO ONE can structure a deal when they don’t know what the homeowner’s needs are.  So I had to teach myself to listen.  Truly listen. Read More→

A couple of weeks ago, I spent the day inspecting several of our rental properties.  At one of the properties, I quickly realized that something was definitely amiss.  The home’s interior was filthy and the yard hadn’t been mowed.  Turned out the tenant’s wife had left him two months before.  The poor fella didn’t know whether he was coming or going.

As we sat at the kitchen table discussing his problems, a big, honkin’ two-pound cockroach ran across the table.  I FREAKED out!  I HATE roaches!!! The man finished what he was saying with: “Oh, and I have roaches, too.”

This family had been in the home for three years without any problems.  The wife was as neat as a pin.  Now that she had left, everything had gone to pot.  Dirty dishes were everywhere, the trashcans were overflowing, and when I opened the cabinets, I found more roaches.  This is called a we’re-gonna-solve-this-right-now-today problem.

Because the tenant was no longer able to take care of the property by himself, he decided that it would be best for him to find a smaller, more affordable place.  He moved the following weekend.

As soon as he moved out, we got busy scrubbing, cleaning and disinfecting.  We also called Dale Yarborough, our long-time friend and bug man with Guardian, to get rid of the roaches.

Landlords, there’s something you need to know about roaches: It takes time and several applications to get rid of all of them.  Oh sure, back in the good old days, when we could use DDT, you could kill all the roaches in one day…but then you also killed the dogs, cats, birds and small children at the same time.  The point is, if we discover a roach problem, I know it will be several weeks before I can put the house back up for rent because no one wants to move into a roach-infested property.

There’s an important lesson to learn from this story: You should regularly inspect your rental properties – both inside and out.  By doing regular inspections, you’re able to keep small problems from becoming big ones.  For example, in this situation, what if it had been three more months before I discovered the roaches?  How bad would the infestation have been then?

There are other advantages to doing regular property inspections: They help you to build good relationships with your tenants.  Also, since the tenants know you do regular inspections, they take better care of the property.  Finally, inspections will save a ton in repair costs.

How often do I inspect my rentals?  With newer tenants, the property is inspected once or twice a month.  Once I’m positive the tenants are good tenants, I only inspect the property every couple of months.

Hope this helps you to become a better, more effective landlord.

Bill & Kim Cook are a husband and wife real estate investing team. They live in Adairsville, Georgia and have been investing in real estate since 1995. They specialize in buying single-family homes, mobile homes and mobile home parks. They also run North Georgia REIA and teach folks how to successfully invest in real estate.

When it’s time to buy an investment property, most would-be real estate investors think that it’s as simple as going to a bank, filling out some paperwork and getting a mortgage.   While that may have been true back in 2004 and 2005, that’s not how it’s done today.  In fact, if you need purchase-money funds, good luck getting them from a bank!

So how and where do you get the money you need to fund a real estate investing deal?  Easy answer – the money is all around you!  Do you think anyone likes keeping their money in the bank, where they’re only earning around 1% interest?  Think about it: Inflation is at 4%; this means that someone with money in the bank is actually going backward 3% each year!

The big question is: What would make someone want to loan you the money to do a deal?  First, the lender needs to make a much better return than he can make at a bank.  Second, his loan must be safe, and by safe, I mean that it’s secured by a whole bunch of collateral! Read More→

Joseph David English, welcome to the world!  By the time you’re able to read and fully understand this letter, your parents, Joe and Ashley, will be wealthy real estate investors who, it will appear to you, have nothing better to do than travel the world having fun while constantly interfering in your life. 

I’m writing this to you, Seph, because it’s important you know that your parents weren’t born with silver spoons in their mouths.  Their success wasn’t due to luck or a winning lottery ticket.  Your mom and dad’s success was a worked-at, strived-for thing.  In the early years of their marriage they sacrificed greatly.  They lived like no one else so that one day, they – and you – could live like no one else!

You were born on Friday, August 24, 2012 at 11:57 p.m., at the Gordon County Hospital.  There to welcome you was a waiting room full of joyous family and friends, many of whom were real estate investors.  You may think that there’s no such thing as a born real estate investor, but trust me on this, Seph – you are one! Read More→