Atlanta Real Estate Investors Alliance Blog

Most real estate investors have heard of the “Note Business” but many misunderstand it while others think that it is completely separate from the real estate business. The fact is, most real estate investors are in the note business, and they just don’t know it. The note business is the financing side of the real estate business.

Note Business in the Simplest Terms

The note business is based upon the purchase, sale and assigning of two documents: the promissory note and the mortgage agreement. These two documents represent a promise to pay and a solution for non-payment.

Note = Promissory Note = IOU (I Owe You)

Mortgage = Collateral Agreement = Foreclosure Agreement

When someone borrows money to purchase real estate, they have to sign an agreement to promise to pay it back. This agreement also outlines the terms of the payback. This written promise is not enough to get a loan. This promise must be backed by collateral of value, which is typically the real estate itself. The collateral agreement pre-authorizes the foreclosure of the property if the debt is not paid according to the promissory note. Read More→

Be proactive about the security of your QuickBooks company file, and you’ll be less likely to encounter data theft.

Thanks to the internet, privacy has been on the wane over the last few years. We assume that our addresses and phone numbers are public information, thanks to sites like Switchboard and 411.com. We hope that our dates of birth are private (though the number of birthday wishes on Facebook makes that doubtful), and we assume that our Social Security numbers are hard to get.

Your customers/tenants trust you enough to provide you with additional private information, like credit card numbers, bank numbers and more. And you’ve seen what an uproar occurs when major corporate entities like Target and Home Depot get hacked.

Your small business may not have hundreds of thousands of customer/tenant information files, but you can still be targeted by external hackers and even your own employees. Are you taking measures to ensure the security of that data stored on your hard drive and/or in the cloud? Read More→

There has never been a foreclosed house which didn’t have potential profit written all over it. Today, several indicators including the firm RealtyTrac have released 1str Quarter 2015 data which shows foreclosure filings and default notices, scheduled auctions and bank repossessions are down over 5% from the prior Quarter over 2014 and are the lowest since 2007.

Knowing the true value of real estate is critical, try to do a deal without it and see. The guidance and data within REIAComps has consistently shown investors how to determine both solid acquisition value and after repair value to earn lasting profits.

Some of the most stubborn foreclosure cases are finally being flushed out of the foreclosure pipeline, and we all can expect to see more noise in the numbers over the next few months as national foreclosure activity makes its way back to more stable patterns by the end of this year. Thus, while foreclosures are down, they will always be with us. As investors, this s a good thing!

The data tells us a total of 152,147 U.S. properties started the foreclosure process for the first time in the first quarter of 2015. This number is down 11 percent from the previous quarter and down 8 percent from a year ago. Read More→

Partners can really make or break your business. Finding good ones is easier said than done. How do you   find or attract the right partners? How do you know when the right person comes along? Will they want to partner with you and what should you offer them when they do want to partner with you? These are questions I get asked all the time. Here are some ideas about partnering in real estate but this article is not about the legal structuring side of partnerships, it’s about the people side.

A good partnership starts with equal but opposite skills, not necessarily a friendship. It’s good to be friends with a partner but contrary to popular belief that is not the most important part and not where you should start. A good partner will bring strength to your weaknesses and you the same for them. You are going to be splitting a lot of hard earned cash with this person so you want to know what it is that they bring to the table. What are they capable of that you are not and what are they capable of that you couldn’t easily hire an employee to do? The first step in answering the questions is to do a long self-analysis. Start with what you are good at. Ok you don’t need a partner to do any of those things. Now what are you really bad at? Now you know what a partner should bring as far as skills are concerned. They need to be good at what you are bad at or have what you don’t. Read More→

Warm weather is finally upon us! Time to get ready for those Summer vacations – trips to the beach, cookouts, swimming, boating, golf, tennis, and everything else that we love to do outside when the weather is warm.

Of course, if you live in the South, Southern California, or a place like Phoenix, you’re used to having nice weather all year ’round. And I hate you. :)

But if you’re like me, and live in a place where you get all four seasons (yay), you can appreciate how the change in weather can also trigger a change in perspective.

Long intro aside, there’s something that I’ve been noticing over the past few years when it comes to marketing…

Ugly is the New Pretty!

What does that mean? It means that a lot of the usual, conventional, traditional marketing pieces or campaigns that USED to work for many years… simply don’t work much any more these days. Read More→

One way a lot of real estate investors use lumpy mail is when they are working the pre-foreclosure market. These people are getting stacks of mail and post cards every day from mortgage companies, attorneys and other investors. There is a lot of competition for these properties so you need to do something to make your mail stand out and look different from the others so it gets opened first. Since there are fewer foreclosures these days getting noticed is even more important to your success.

There are several ways to do this. One is to simply insert something into the envelope if you are mailing a letter. It might be a piece of candy or gum with information about your business with a tag line of “In a sticky situation? Call us first”. Or, if you are using a piece of candy it might say, “Call us first, we can make you a sweet deal”. It just needs to be something that makes your mail piece look different, and makes it stand out from everyone else’s.

You could also use a lumpy mail piece like a penny, then within the body of your letter; say something like “a penny for your thoughts on selling your home”. You just need to be using something that grabs the seller’s attention. Anything that feels different or makes noise will accomplish this for you. Be creative with your mailings and you will create more leads and do more deals. Read More→

Recently a friend of mine sent me a chart created by the United States census bureau showing the numbers of home ownership from 1965 until 2015. Amazingly the number of home ownership in 2015 was almost exactly the same as it was in 1965. I found this very interesting because throughout all of those years between 1965 and 2015 homeownership escalated slowly until 2006 when the real estate market crash took place because of all the defaulting loans. As house prices dramatically declined people felt their homes were worth less than what they owed so many people quit making their loan payments causing many of the defaulted loans people could no longer afford. I thought about what this chart represented for today’s real estate investors and I believe this chart shows us there is great opportunity for real estate investors of all kinds everywhere.

I am starting to see more and more new construction everywhere I travel and I am also seeing more and more deals completed by my students who are savvy investors all over this country. I’m an optimist, I truly believe that we are going to see huge profits made by those who step out of the traditional box and structure their deal differently than those who only do what everyone else is doing. I believe those of us who think different than the masses will prosper far more than the status quo. I am seeing the market slowly making a comeback from the disasters of 2008 for some of us but not those who are stuck in yesterday’s methods and mindset. Read More→

Picture this familiar story: You go to a real estate meeting and meet a Buyer looking for property. Ecstatically, you immediately add them to your Buyers list which they fully expect. Within the next week or two, you get a deal and send it to them via your Buyers list. A day later or perhaps only a few hours, you get a phone call from the Buyer (let’s call them Bob) and it goes something like this:

You: Good afternoon Bob, how are you?

Bob: Doing well, yourself?

You: Doing well. How can I help you?

Bob: Well I got this deal here at 123 Main St that you sent me however I have gotten it from five other people and am trying to figure out who has it since they all have different prices. I am very interested but need to know who really has the contract so I am not wasting my time. Another gentleman called me and said he was under contract but it seemed odd since your price was lower yet he was adamant. You seemed like a nice fellow and your price is the lowest so I am starting with you. Is this your deal?
Read More→

Since we don’t use banks, how do we fund our deals?

Do banks have money to lend? Think carefully – this could be a trick question! Don’t banks “borrow” the money they lend from their depositors? And why do depositors keep their money in the bank? Because it’s the safest place to keep it, right? But is it really?

What interest rate is your bank paying on savings these days – 0.3%? And what is the current rate of inflation…something like 4%?

Here’s a broad-brush picture to help you understand what’s really happening. You put $10,000 in the bank earning 0.3% interest. One year later, your nest egg has grown to a whopping $10,030. But let’s not forget about inflation. In reality, after you factor in inflation, the actual buying power of your $10,000 dropped by 3.7% to $9,630! What – you LOST money? Read More→

Here is some news that might surprise you…

banks and hedge funds can actually make your business stronger, especially if you own property.

I can say this with confidence because I’ve been in this business for a long time, and I want to share with you what I know about the relationship between you and the banks:

Banks: Right now, banks are holding the prices up artificially, meaning that values are rising. Banks are pushing the limits of pricing. They are getting data on the best-selling styles, features, and geographic areas. They know which houses sell and rent the fastest. Remember: banks are in the real-estate business; a business makes money. Do not expect them to treat you like a friend.

Hedge Funds: According to The Wall Street Journal, hedge funds are gathering analytics on the type of housing that is in demand. Their information is so specific that they know which houses’ rents can be increased. They also control the home owner and rental market, making it clear which way you should go when you put a house under contract. Read More→

All men are created equal. But not all states, as far as Real Estate IRA investors are concerned. This is especially true for those who hold rental property in their Real Estate IRAs. Naturally, every state tries to strike a balance between the rights of renters to privacy and stability and the property rights of landowners. And some states strike that balance in a way that is much friendlier to landlords than others.

The key issues are each states’ landlord-tenant laws, bankruptcy protection measures and overall friendliness to debtors vs. creditors, and property tax levels.

Arkansas

Arkansas is the only state in the country that does not recognize an implied warranty of habitability. This means that landlords have no obligation to maintain homes or make repairs. But the law forces tenants to pay rent, anyway. Most other states have at least some provision for rent withholding or partial payment in the event that the landlord does not ensure at least a functionally livable property.

Arkansas allows landlords to commence with eviction procedures once the tenant is just a single day late with rent. Read More→

“Would you like to buy a home of your own,
but don’t have the big down payment or credit?”

Real estate is a vehicle that cannot only provide you big checks within a few days but also a monthly residual income and a big backend payday. It can retire you so you’ll never have to worry about what the government will pay you when you become a senior and don’t want to work anymore, and the best part is you can make a lot of the money tax-free using your Roth IRA.

The problem is most people believe it takes money and credit to buy real estate and that you need a license or experience. None of that is true. I’ve been teaching people how to buy and sell houses for over 30 years now and to this day I buy 4-6 per month without using any of my own money or credit with one part time assistant and a couple of virtual assistants to get all the work done. I literally spend less than five hours a month in the real estate business to manage this very profitable income stream. It is truly a full time income with a part time effort, which is the way I like all my businesses to produce and assume you do to. Read More→