One of the hot topics in real estate investing these days is something called creative deal structuring.  This leads to a question that we’re often asked: What exactly is creative deal structuring?    

To answer this question, we need to begin by describing what it’s not.  One way you can buy a property is to pay cash for it.  You won’t find any creativity in that deal structure.  You can also find a property you like, apply for a mortgage, and then a month or so later, go to an attorney’s office to sign a big stack of hard-to-understand documents.  Not much creativity there either.

Creative deal structuring begins when you find someone with a real estate problem that “normal” solutions can’t resolve.  For example: A homeowner owns a nice home that in 2006 was worth $130,000 but today is only worth $70,000.  She owes $80,000 on her mortgage – making her upside down by $10,000.  Now throw some motivation into the mix – the lady needs to sell immediately so she can move to Tennessee and begin her new life.

Let’s see, a cash buyer wouldn’t be interested in this deal.  And you’d be hard-pressed to find a realtor who would list this house – unless it’s a short sale listing.  So how would you structure this hopeless situation? Read More→

One of the best real estate investing teachers in the country is Pete Fortunato.  What makes him so special?  Pete knows how to creatively structure deals in ways that make impossible deals possible.

Before Pete became one of our primary teachers in 1999, Kim and I did all of our deals the same old way.  We’d find a house, apply for a mortgage, close with an attorney and then either sell or rent the property.  Bottom line: If we couldn’t get a mortgage, we couldn’t do the deal.  We felt like we were buying a Model T Ford from Henry Ford.  Mr. Ford used to tell his customers, “The Model T comes in whatever color you want – as long as you want black.”

One of our biggest real estate investing ah-hah moments happened at our first Pete seminar.  He flashed a diagram of a house up on the screen.  The thing making this house different was that each room represented one of the eight transactional benefits of a real estate investing deal.  The eight benefits are: Growth, Income, Amortization, Profits, Management, Security, Tax Benefits and Use. Read More→

I advise landlords to regularly inspect their rental properties – both inside and out.  This will help keep little problems from becoming big problems.  Another good piece of advice is to know the neighbors around your rentals and make sure those neighbors have your phone number.

A few weeks back, I inspected a property we manage in Canton, Georgia.  The tenants had lived there for about five months.  They kept the home spotless, paid on time and were comfortable to work with.

While we allow pets, these folks didn’t have any…or so they told me.  As I did a walk-around inspection, I opened the gate to the backyard and suddenly realized three very important things:  First, the tenants had acquired a momma Pitbull and her six pups.  Second, momma Pitbulls are VERY protective of their babies.  Third, I didn’t have a change of underwear – something I suddenly needed DESPERATELY! Read More→

Cruising yard sales and working at a pawn shop are two of the best ways to learn how to negotiate.

I’ve spent years doing both, and one of the biggest mistakes I see people make is asking the seller, “What is your asking price?’

Big Mistake – huge!

Think about it:  when a seller prices an item for sale – whether it’s a boat, house, or trinket – he has a ‘written’ price in his mind.  Usually, he will ask one price, but will take another.  So when you, as the buyer, ask the seller, “What’s your asking price?” he mentally sees the ‘written’ asking price in his mind and gives you that answer, instead of the price he will actually take. Read More→

Most folks mistakenly think negotiating is a beat-the-other-side-over-the-head-until-they-quit thing.  This couldn’t be further from the truth!  Over the years, we’ve sat down with thousands of buyers, sellers and tenants and successfully negotiated hundreds of Win-Win deals.

What’s a Win-Win deal?  It’s when both parties leave the negotiating table feeling like they ended up in a better place than where they started.  They may not be in the exact place they wanted to be, but they are in a better place!

Here’s a nugget I learned from Pete Fortunato: No one is gonna say yes to a deal that puts them in a worse place than where they started.  Given a choice between a worse place and the same place, folks will take the same place about every time – in other words, no deal! Read More→

In 1995, when Kim and I made our start as real estate investors, we knew nothing about nothing about real estate.  When we attended local real estate investor meetings, we didn’t understand anything anyone said – it was as if they spoke a different language.  It was very frustrating!

So why didn’t we quit – after all, that’s what most would-be investors do soon after they start, right?  We didn’t quit because Kim and I didn’t want to “work for the man” for the rest of our lives.  We wanted to make our own way.  We wanted to have our capital assets working for us instead of us working for our capital assets.   

Can’t tell you the number of times someone has told us, “Yeah, I’ve been thinking about buying some investment property, but don’t know where to start.” Read More→

How would you like to pay zero property taxes?  Think before you answer.  If everyone paid zero property taxes, then we can say goodbye to silly things like schools, roads, policemen, firemen, EMTs, etc.  So, do you still want to pay zero property taxes? 

Most of us don’t mind paying our fair share – we understand the benefits.  It’s just that we don’t want to pay more than our fair share.  So here are the steps Kim and I take if we think our property taxes are overly high. Read More→

Every year, we get bombarded with questions from property owners asking how they can lower their property taxes.  Most feel their property taxes are higher than they should be.  Problem is, they don’t know what to do and wonder whether it’s worth the time and effort to fight.

In 2006, Kim and I were in that same boat.  But after watching the property taxes on our investment properties skyrocket from 2003 to 2006, we decided that enough was enough.  We made the decision to fight.  We didn’t care whether we won or lost, as long as we fought.

What kind of results did we get that first year?  Though we didn’t know what we were doing, we appealed the taxes on four of our properties – and won all four appeals! Read More→

Last week’s column titled, Will the Number of Foreclosures Increase in 2012, brought in a number of calls and emails.  Several folks in the real estate field accused me of being negative and trying to drive down real estate values.

I asked one caller, “Do you really think my weekly real estate investing column influences real estate values?  Seriously?”

The truth is, Kim and I are along for the ride just like everyone else.  But in case my column CAN influence values, let me try an experiment: The value of fifteen-year-old, two-bedroom, one-bath mobile homes in Cartersville, Georgia just shot up one million percent!!!!  And I just happen to have one I’ll sell you for only $800,000. Call me! Read More→

A couple of months ago, a real estate investor who works the same market we do, told me he wished I’d never write or teach about foreclosures again.  He said all I was doing was creating more competition for him at the monthly foreclosure auction.

Over the years, folks have wondered why Kim and I host a monthly real estate investors meeting.  After all, by teaching folks how to be successful investors and landlords, we are creating competition for ourselves, right? Read More→

For some reason, many folks think luck plays an important role in whether a real estate investor is successful or not.  The truth is, luck plays almost no part in an investor’s success – or lack thereof. 

Think of it this way: Let’s say you decide to run a five-kilometer (3.1 miles) race three months from today.  You run every morning.  Each morning, you run a little further than the day before.  Finally, two weeks before your big race, you’re able to run four miles without stopping.  When race day comes, you easily cross the finish line – raising your arms in celebration for having achieved your goal.  Here’s the important question: Was your success due to luck or was it due to persistence and determination? Read More→

To be or not to be – that is the question.  Are you a monomaniac on a mission, or are you a wandering generality?  It’s YOUR choice to make.

It pains me when someone answers, “I don’t know, I never really thought about it,” to the question, “What are your goals?” 

A person with written, clearly defined goals becomes something like a magnifying glass.  Goals allow one to take scattered energy – like the sun’s rays – and focus that energy into a single point of immense power.  On the other hand, a person without goals is like a wind-up toy that hits a wall, bounces off, heads in another direction, hits a wall, bounces off, heads in another direction, hits a wall…you get the idea – no focus and no direction. Read More→