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How Do You Fund Your Deals?

Posted on July 28, 2014 by

Just met with a would-be real estate investor.  For two years she’s been trying to get into the investing business.  Problem is, she has yet to meet with a seller face-to-face.

When I asked why she hasn’t met with any sellers, she said: “What if the seller takes my offer?  How am I gonna pay for the property?  Banks sure aren’t lending to investors right now!”

Ironically, the fear of the seller saying, “YES!” is what keeps most would-be investors from ever making their first offer. But the astonishing thing is, if your deal is a good one, the money will ALWAYS find you

We get loads of calls from investors who are looking for money to fund their deals.  For example, yesterday an investor contacted me about a 2-bedroom, 2-bath condo he wanted to buy and flip.  The condo’s ARV (after repaired value) is $65,000.  It needs $15,000 in repairs.  The seller agreed to a $48,000 sale price.  But when all the expenses are factored in, there’s no way this investor will make a dime on this deal, and that’s why no one will fund this one. Read More→

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Doing a Subject-to Deal?

Posted on July 1, 2014 by

In last month’s column, we outlined a Subject-to Deal.  This month let’s look at this advanced deal-structuring technique in action.  (NOTE: You can find last month’s column here on AtlantaREIA.com).

In mid-March, we got a call from an experienced investor.  He owned several single-family rental homes.  He had received a call from a motivated seller, who, because of a difficult family situation, wanted his house sold in less than a week.

For years, this investor had heard me talk about Subject-to Deals.  He thought this technique would be the perfect solution for this seller’s problem, and called to see if I’d help him with the deal.

(Sidebar: A Subject-to Deal is when you buy someone’s property, but instead of paying off their mortgage at closing, the seller leaves his mortgage in place, and you agree to make the seller’s mortgage payments, on the seller’s mortgage, for the seller.)

The first thing we did was meet at the seller’s house to discuss the situation and to look at the property. Read More→

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Sat, June 28 @ 8:15 AM – Smyrna, GA
Join us on June 28th for a REAL, LIVE, HANDS-ON…
Door Knocking Field Trip
With Bill Cook

Do you want to SEE the fastest, cheapest, most effective way to get face-to-face with motivated sellers?

Bill CookThen join me, Bill Cook, for a day full of door knocking with real sellers on Saturday, June 28th from 8:15 AM – 3:45 PM. We’ll spend the day out talking to sellers and constructing win-win deals at their kitchen tables.

What’s the fastest, cheapest, most effective way to get face-to-face with motivated sellers? When you see a For Sale sign in a seller’s yard, get out of your car and knock on the seller’s door. It’s as simple as that!

I know what you’re thinking: The seller will slam the door in my face; the seller will yell at me; the seller will tell me to get lost.

I know something else, too: You say this having never spent a single day out knocking on homeowners’ doors – especially out knocking doors with someone who has done it for more than 35 years!

Register Now!

Some of the Questions I’ll Answer While We’re Out Door Knocking:

  • Which homes should you go to?
  • How and where should you stand when at the seller’s door?
  • What should you carry with you?
  • What do you say when the seller answers the door?
  • What do you do if no one is home?
  • Why will 8 out of 10 sellers invite you in?
  • What are the best types of neighborhoods to work?
  • What do you do after the seller invites you in?
  • How do you get to the seller’s kitchen table and why it’s THE place to be?
  • What are the MOST important questions to ask a seller?
  • How do you construct a win-win offer?
  • What do you do if the house is vacant or bank owned?

On Saturday, June 28th, 2014 at 8:15 AM, I’ll be taking a select group of real estate investors out door knocking. We’ll be meeting in at the Home Depot parking lot located at 1200 East-West Connector, Austell GA beside the Garden Section facing Floyd Rd at 8:15 AM SHARP.

Just think, you have the opportunity to spend the day out meeting with sellers in the real world with someone who has made his living knocking on homeowners’ doors for more than 35 years!

Register Now!

I promise you’ll come away with some really great stories, plus a couple of big Ah-Hah moments that can dramatically change the course of your real estate investing life!

Read More→

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What is a Subject-to Deal?

Posted on May 31, 2014 by

In previous columns, I’ve mentioned Subject-to Deals. This generated a lot of what-is-that phone calls and emails – from both real estate investors and realtors.

To help folks better understand this advanced creative deal-structuring technique, this month I’ll explain what it is.  Next month, we’ll look at a Subject-to Deal we just did. 

Normally, when you buy a house, the seller’s mortgage is paid off at closing.  With a Subject-to Deal, the seller’s mortgage is NOT paid off at closing.  Instead, when the property is deeded to the buyer, the seller’s mortgage remains in place and the buyer promises to pay the seller’s mortgage payments, on the seller’s mortgage, for the seller.  In other words, the buyer is buying the property subject-to the seller’s mortgage.  Think of it as a form of owner financing.

When first hearing about Subject-to Deals, most folks believe this type of transaction must be illegal – Kim and I hear this all the time.  Fact is, Subject-to Deals have been around for decades.  Look at lines 203 and 503 on any HUD-1.  It reads: Existing loans taken subject to. 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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Just met with a guy who has a very interesting story that you’re not going to believe: He has $1 million in the bank, but doesn’t have enough money to buy food!  He’s practically starving to death.

This guy worked hard, saved hard and invested wisely his entire life.  When he retired, he had $1 million in liquid capital.  To keep his money safe – the volatility of the stock market scares him – he invested his money in bank CD’s paying 3.6% interest.  Last year, when the CD’s matured, he was forced to roll his retirement money into new CD’s with a dismal 0.6% interest rate. 

Here’s the thing: These days, this guy’s investment doesn’t earn him enough to live on – he’s forced to exist like a pauper.  He said, “Once I became a millionaire, I thought I’d never want for anything.  I couldn’t have been more wrong!”

Before your dumbfounded look affixes to your face forever, fully understand this man’s predicament.  He and his wife have $1 million cash, but they don’t want to spend any of this principal.  Their retirement goal is to live off the interest the $1 million generates. Read More→

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There’s no doubt that the number of properties being advertised for foreclosure has been plummeting for the past year and a half.  The question is, why?

In 2009, when foreclosure numbers began to skyrocket, the only way a bank could deal with borrowers who were behind on their mortgages was to foreclose.  The fact that banks – actually it was loan servicers like the infamous MERS – didn’t have possession of the borrower’s note, nor the legal right to foreclose on the property, is a topic for judges and attorneys.

At the same time, you had thousands of borrowers who, because they couldn’t/wouldn’t make their mortgage payments, simply “gave the house back” and walked away.  (It didn’t matter to the borrowers that the bank didn’t give them a house; it gave them money…and the bank – rightfully so – wanted their money back, not a house.)  A bank’s only tool to deal with this situation was to foreclose on the property, and then sell it in hopes of recouping some of their loss. Read More→

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Learning About Real Estate Investing

Posted on January 24, 2014 by

If you’re a Baby Boomer or a Gen Xer, then you’re thinking more and more about retirement – mainly, how are you gonna afford it?  After all, we all know that Social Security is not much of a retirement plan.

This need-to-know desire is driving lots of folks to learn about real estate investing.  After all, more folks have achieved financial freedom from real estate than from all other types of investments – combined!

The question we’re continually asked is, “What’s the best way to learn how to successfully invest in real estate?”  Here’s a hint: All those TV infomercials are nothing but hot air.  Those “gurus” who come to town offering a “free” seminar are just snakes in the grass…but then, you already know this.

After 19 years of investing in real estate, we’ve learned that the two best ways to learn are 1) Meet with sellers and ask Pete Fortunato’s famous question: “Why are you selling such a nice house like this?”  2) Hang out with been-there-and-done-that investors.

Sure, neither of these ways is sexy, but they are incredibly effective.  Gotta add one other thing: You’ve got to do both a lot…once or twice just won’t cut it. Read More→

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Stay Focused On Your Area

Posted on December 23, 2013 by

Some real estate investors invest in a concentrated area.  Others work huge, multi-county areas.  In our case, we work a five-mile circle around the Cartersville, Georgia Wal-Mart.  This allows us to better manage our rental properties, plus, when a seller calls, we can quickly get to their house.

Staying in our five-mile circle takes a lot of discipline.  We often get calls from motivated sellers a county or two away.  Having a great deal placed on your plate, then having to pass it on to another investor, flat out hurts.

For example, last week a seller called, desperate to sell quickly.  She owned a three-bedroom, two-bath mobile home in a trailer park.  The home was in great condition and needed little work.  We agreed to a purchase price of $4,500.

These kinds of deals are called Lonnie Deals.  A Lonnie Deal is when you buy a mobile home in a park for cash (you own the trailer, not the dirt), then sell it on time to an owner/occupant.  You may think this is a silly deal, but believe me, Lonnie Deals are the highest yielding deals we do.

Let’s look at the numbers: We’d sell this nice mobile home for $9,000.  The buyer would give us $500 down.  Here are the terms of the note: $250 per month, for 48 months, at 18.07% interest.  So what’s the yearly yield on a simple deal like this?  Would you believe 70.08%?  Try finding a bank that will pay you 70% interest on your savings account! Read More→

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Are Women Better Real Estate Investors?

Posted on December 23, 2013 by

I must start by saying: If you’re looking for politically correct, then I’m DEFINITELY not your guy!

Kim and I were discussing who is better at real estate investing – men or women.   Lord knows men and women are very different creatures.  Men are clear, concise and rational thinkers.  Women are not. 

Seriously, I think women can be better – a LOT better – at real estate investing than men.  To prove this, our real estate investor’s meeting this month is about successful women real estate investors.  Our panel will be four women who, between them, do over – way over – 100 deals a year!

Three reasons why I think women can be better at real estate investing: 1) Great time management.  2) Not ego driven.  3) Aren’t scared of hard, dirty work. Read More→

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Cut Through The Obvious

Posted on December 23, 2013 by

This past weekend, I was one of the instructors who taught at a boot camp for new real estate investors. At the end of the four-day event, the frequently asked question was, “What do I do first?”

The advice from the instructors varied. One said to spend the week reviewing the course notes. Another told the investors to put their real estate investing team together. Several thought it best to work on a marketing plan.

When it comes to advising would-be investors how to start – or seasoned investors how to get back on track – I often feel like a salmon swimming upstream. I think the FIRST, most important thing an investor needs to do is to get face-to-face with sellers as SOON, and as OFTEN, as possible!

A number of the attendees didn’t care too much for this advice. One woman best summed up the fears in the room when she said, “I’m not sure what to say to a seller. I’m not comfortable creatively structuring a win-win deal. I don’t know what to do if the seller accepts my offer.” Read More→

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Vacancies Are a Fact of Life

Posted on December 23, 2013 by

Why would a reasonably sane person own rental property?  After all, we’ve all heard lots of landlording horror stories, right?  You know the ones: the tenants refuse to pay rent, the tenants trash the property, the tenants move out in the middle of the night, etc.

Here’s something to consider: We had 61 investors attend our monthly real estate investors meeting in October.  These 61 mom-and-pop investors control 573 properties.  A couple of weeks back, I (along with seven other instructors) was asked to teach at a boot camp for new real estate investors.  The instructors controlled 122 properties.  All told, that’s 69 investors controlling almost 700 properties – incredible, isn’t it?

So why do all these folks own rental property?  Easy answer: They want MAILBOX MONEY!  What’s mailbox money?  It’s when you get checks in the mail because your capital is working for you, instead of you working for your capital.

Are there other ways to get mailbox money?  Sure – some folks own stock and live off the dividends.  We have friends who make purchase-money loans to real estate investors and live off the interest they make.  Of course, there’s also a one-in-a-billion chance that you’ll win the lottery – talk about a shaky retirement plan! Read More→

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