Author Archive
Why Improve Your Raising Capital Presentation Skills?
Posted on October 3, 2017 byI believe we all need to improve our businesses. The only way to do this is intentional reflection and forensic analysis. We all can learn a better way to look at our business to stay on top of our game. The best example of this was back in 2000 when the market opened up and anyone who had credit could get into a house. I was using an old business model to screen tenants and respond to inquiries about my properties. I had to make a change quickly because the vacancies lasted longer than needed. I learned the lesson to stay on top of the market. If you become complacent your business will drop off.
In the last article, I wrote about sitting at the table with two sellers and working to get them to finance their house so I could renovate it. Then I would pay off the mortgage. It was a buy, fix, and sell. I will be using poetic license in referring to the “lender” as owner financing / private lending/ hard money. Read More→
Mayor Kasim Reed Blowing Smoke
Posted on August 7, 2017 byMayor Kasim Reed is a short-sighted politician. Thank goodness for term limits.
Mayor Kasim Reed says he is concerned about affordable housing. In a recent AJC article, Mayor Reed used terms like “predatory purchasing”. I believe this slanderous name calling only causes separation and stirs up animosity between the sellers and investor buyers. I am upset about this article where Mayor Reed said that investors are using predatory purchases to acquire houses and force the property values to go up, so there is no longer affordable housing in Atlanta.
If the city of Atlanta is going to point fingers they need to look at the predatory purchase of the surrounding land, which now houses the Falcons Stadium. My understanding is the city of Atlanta did threaten eminent domain in order to get that stadium in place. I did like the powers to be forcing that move though. Even if it will displace 30 properties of affordable housing. I think the Atlanta Mayor must have been referring to the investors that buy single family houses as predatory purchasers, not the commercial buyers. But that is another article. Read More→
Raising Private Capital – A Lesson Learned
Posted on July 10, 2017 bySitting at the kitchen table there were three people, two sellers and the buyer. I wanted to buy their house but did not have the $40,000 cash to do it… now. The presentation from my side went just like I had planned. From the Seller’s prospective it was too good to be true. They were unfamiliar with investing in residential real estate. They did have other investments like a 401 K. They let other people handle their investment accounts. They haven’t touched it or changed their investment direction in 20 years and they had lost money during the recession. When the 401K and investment statements came in the mail they never opened the envelopes to see what they had. What they had was HOPE! They had a mortgage and had owned two houses prior with a mortgage. They had never heard of private real estate investing and getting an interest rate as high as I was proposing.
What I wanted to do was to buy the house. The house had a first mortgage of $120,000 and equity of $40,000 for a total financing of $160,000. I wanted to keep the first mortgage in place, have a $40,000 second and pay an interest rate of 8%. My exit strategy was to buy, fix and sell the property, just like they do on TV. It would be for one year, then I would sell the house and the mortgage would be paid off. This method of financing was going to save me $16,600 in interest fees and costs. I could pay a higher price for the house with the owner financing. It would be a lower price if I paid all cash. Read More→
Getting Prepared To Make Your First “Ask For The Money” Presentation
Posted on June 5, 2017 byIt is about time that you are making your very first “get the money” presentation. I am not going to tell you much about my first presentation for money, since it was so long ago. I think I was 3 years old and wanted some candy. I am sure it did not turn out very well. I think I did the presentation in front of the wrong audience and I was not very professional. My ‘ask” presentations have gotten much better especially since I know how to effectively raise capital today and every day.
How can you get prepared to make your first professional “ask” presentation? The first thing you must do is place yourself in front of the right audience. If you are doing the presentation in front of a group of people without any resources, you might as well be talking to the wall. If you are talking to people who have shown interest and know something about what you are working to achieve then your chances soar! So, think of doing a presentation in which the potential investors in your project have a mix of people who know you and people who don’t have a clue as to your reputation, experience level, motives, or character. The great news is the people who know you will probably advocate for you. Read More→
Why Would Anyone Give Me $100,000 Cash to Invest?
Posted on May 1, 2017 byI think the better question is why wouldn’t someone give you $100,000 in cash? Is it because you would run off with the money? Is it because you have little to no experience in handling that kind of money? Does that thought run through your mind on a regular basis? Well it needs to stop! Focus on the goal and dump the negativity! If you are a crook stop reading this article. The best question to ask is, who will fund my whole project, (the purchase price, the repair costs, the monthly payments, the utilities, the taxes, and insurance) and allow me to make a good profit?
Let me put the quantity of money into prospective. Let me also put into prospective the major two differences between a hard money lender and a private lender.
In the past I thought that $100,000 was a lot of money. Today this amount will buy a nice single family house in a blue collar neighborhood. The house will need to be fixed up and it might be in an area with a less than desirable school system. So, if your business plan is to fix up houses in the price range of $50,000 then sell at the $100,000 this will work. You will be very happy to have a person invest in your project. The project must make sense. The project must make money for the investor/ lender. The investor/ lender is sharing the risk with you. The investor/ lender will want to know that they will be paid back on time and in full with no excuses or late night phone calls. Read More→
How to “Print” Money for Your Real Estate Investment Business
Posted on April 3, 2017 byI have learned how to get enough money to buy any house, at any time, any place, and any condition. Wouldn’t it be great to have the relationships to be able to do just that? This is not out of reach and it is not very far from where you are sitting right now.
I recently got into a conversation with a fellow Investor at the gym and it went like this:
Russ: How is business?
Gabriel: I am so busy. I have 17 houses (being rehabbed) right now and the one you sold me (two months ago,) I haven’t been able to get to yet.
Russ: This is great. How are you getting them?
Gabriel: From people like you, wholesalers.
Gabriel: What are you doing? Read More→
Creating a Money Machine That Will Allow Me to Buy Houses With Private Money
Posted on March 6, 2017 byLast month I wrote about beginner’s rules and the first presentation a person could do when looking to raise capital. I talked about the mistakes that I made early on. I just changed the names to protect the innocent, me.
I want you to think about being able to raise private money from local sources, business people, retirees, and people who have money sitting in banks or accounts that are barely earning them a .01% rate of return. If you are one of those people, then we need to talk.
So, picture yourself walking up to people and building a relationship. Is this scary? Is this awkward? Is this a cake walk? Read More→
Beginner’s Rules for Raising Capital in 2017
Posted on February 6, 2017 byThis year will be different. Has it happened? Has the flame gone out? Is the passion gone away? Have you followed through? One way that I keep the passion alive, is to have access to more money than I can use to produce great investments. Raising capital is not very hard. Getting over the psychological parts of making “the ask” seems to be the difficult part for most people. I have been approached over the past year by a number of people who want me to fund their projects. I can get excited about this because I can see they have a project which will work and make us a lot of money.
I was at a networking event recently. There where people in the room who wanted to invest in real estate projects and earn a great rate of return. There were people who did not have a clue as to what lending is all about, that there are multiple alternative investments, other than the traditional ways Wall Street gets your money. There were individuals who were reluctant to dip their toes into the pool of lending to investors. There were people there who had projects, which they wanted to get funded. So the environment was ripe for synergy to happen. Read More→
Have We Reached the Top of the Market?
Posted on January 9, 2017 byOn the Front Page of The Wall Street Journal on Wednesday Nov. 30, it stated “Home Prices Hit record levels”. If you read this article, you will think it is over, the window of the “massive profits in real estate” opportunity has slammed shut. If you did not buy any property since the great recession, you have missed the boat. In your old age when you go into the smelly retirement home, that your Social Security or what’s left of it will pay, you will remember this lost opportunity of buying real estate in the 2012-2016. Yes, it is true the national average states that prices have recovered. If you sat on the fence, you have missed that once in a lifetime opportunity. You decided that the market wasn’t right and you would wait. Those who waited have lost the greatest opportunity in this decade or life time to hit it big and coast into retirement. You might as well go to your “JOB= Just over broke” opportunity and sell your health, back, brain and soul to the company. Don’t invest in any more real estate courses… Save your money, you will need it for your retirement. Read More→
Working With Realtors
Posted on December 5, 2016 byIn my business model I need very motivated sellers. They need to be able to have a desire to sell at a reduced price and give me favorable terms. Most Realtors have been trained to only accept a cash deal (mortgage included), as there is no reason to do anything beyond this traditional method, especially if it is complicated financing that they don’t understand. So it is important to figure out how to work with a Realtor. Here are some tips that I have found to be effective when working with Realtors:
- Work with a Realtor that is accessible and follows through. Some are so busy that it might take too long to be able to communicate with them effectively.
- Once you are able to talk to the Realtor you will need to get some information: Is the seller motivated? What does the listing say that causes you to believe the seller is motivated? What does the owner owe? Will they consider owner financing? Most Realtors will not ask these questions because it doesn’t change the transaction (I believe they do in my business).
The Realtor’s sole job is to act as a fiduciary. The Realtor’s responsibility is to make the most commission for themselves, which has a benefit of making the maximum for the seller. The Realtor has no risk if either party makes a profit or loss. You see the conflict immediately between a Realtor and the investor. The goal of a Realtor is to get as much earnest money out of you as they possibly can. (Just like a wholesaler). This causes you to follow the money… your money. I was told by a mentor who was willing to walk from $5,000, if you do your due diligence and find the deal will lose more than your earnest money, then walk away. This was a big lesson for me. Read More→
It is a Deal or No Deal in 2016?
Posted on November 7, 2016 byI have been challenged in the past few months as the competition in the market heats up and the number of wholesalers who are working the area are making offers to sellers which are outrageously high. I want to talk about the way to figure out if the subject property is a Prospect or a deal. This way you will get the keys to remembering if the opportunity is a deal or dud.
I have recently taken some training because my business and I must change, in order to stay ahead of the changes in the economy, the market, and life in general. I took specific training that was on options. This gave me a new tool in my tool box in order to buy more property. I’m excited. I am using these techniques. They are working. When I understand that all scenarios that work for me the chances for success go up dramatically. I must know my plan of: what to buy, where to buy, when to buy, & what price to buy. Just because it is a deal for me doesn’t mean it is a deal for you. NEVER compare yourself to another investor or person! Read More→
The Real Estate Market is HOT NOW! Do I Want to Get In?
Posted on October 3, 2016 byWant to Get In?
Having a simple process to learn new things can enhance your personal and professional life. For example, I wanted to learn how to listen to Jazz. It’s all about the learning curve and experience. I had to have a desire to learn something new. There had to be a simple system that I would be able to relate to and learn something about complicated jazz music. The music seemed to fit my personality. I did not grasp why some jazz was so caustic & other jazz was soothing romantic and enveloping.
If I couldn’t get an understanding quickly, it could prevent me from being able to listen to a new richer, quality music. My goal was to be able to discern really good jazz and why jazz sometimes, just did not fit with my values or my personality. I utilized a five step process to determine if Jazz was a new genre for me to enjoy. This same process can apply to seeing if a career in Real Estate is for you, and how to be successful. Read More→
