Atlanta Real Estate Investors Alliance Blog

As I write these words, the summer is almost over. School has already begun in many places throughout our country, and will soon start in the rest. Vacations have (hopefully) been taken, and before you know it, it’s back to the ol’ grind again. Yay!

So, have YOU taken a vacation? Did you have the chance to get away and do something fun, relaxing, or otherwise fulfilling this summer? If not, why not? There have been countless studies done and research conducted that prove that people who take the time to take vacations live longer, happier, and healthier lives. Google that if you don’t believe me.

It wasn’t too long ago (when I was -gasp- working a full-time job) that I started to get burned out from it. I began hating the thought of going there and facing certain people again, and even the activity of what I was doing started to get on my nerves. The funny part is that my job at the time was the best ‘job’ I’d ever had: I was a Ballroom Dance Instructor!

I remember asking myself, “Why am I feeling this way about what I’m doing?” Then the thought hit me: I realized that I hadn’t had a vacation in 6 years! Like a lot of people, I was simply working too hard to think about it. I immediately set one up – a week at the beach – then planned it out & went. Read More→

This is the final part of this article but it is not the end of the mistakes I have made negotiating with sellers through the years. I will continue to provide more negotiating ideas for every serious investor who realizes that negotiating directly with the seller is where the most money will be made.

8. Being Inflexible – can you imagine a real estate genius like me passing on a deal just because the sellers and I were $500 apart on the price? Even at the higher price it was still a good deal for me but my pride and ego wouldn’t let me give in and do the deal because I wanted the deal to go my way and the sellers wanted the deal to go their way. I can’t believe I was that immature that I let a beautiful asset like that house slip away over $500. I have learned over the years, there is no place in this business for your pride or your ego. If you have negotiated a good deal get the deal closed and enjoy the benefits that property will give you and your family. Read More→

There are lots of great ways to make a lot of money in real estate, not the least of which is buying and selling vacant land. This is an effective way to do real estate deals with no hassle, no rehab, no insurance and no worries of vandalism and theft. Plus, there is virtually no competition for these properties since many investors are simply not going after this incredibly lucrative portion of the market place. I was actually in the real estate business for several years myself before I discovered this very profitable part of the market. In addition, in this current market buying and selling vacant land is another good strategy to continue making money in the real estate business.

If you live in an area that is particularly rural, then buying and selling vacant land is a more lucrative means of doing real estate deals. Since it can be more difficult to find homes to purchase in more rural areas, vacant land is definitely the way to go. There are several different ways to find vacant land deals.

One is to simply drive around and look for them. However, since it can be kind of difficult to find addresses for properties this way, it is probably a much better idea to create a direct mail campaign to the owners of vacant land. Some of the parameters I use for this list are out of state owners of vacant land, especially those with past due tax bills or folks who have inherited vacant land. These are some of the most lucrative deals out there. Be especially aware of those properties that front main highways since these will create even more valuable deals for you. Read More→

All Investors and Realtors need to know the guidelines of their Title Company’s requirements for buying and flipping short sales. Each Title Company may have one or two underwriters which tell them how to conduct their business. I am a firm believer in having all my i’s dotted and my t’s crossed with full disclosure. Whenever I want to use the end buyer’s money to fund the first transaction “A to B” closing, I have already sent all my forms to the Title Company to send to their underwriter to review. This way, I will not have any problems when it is time to close. Some Title Companies will require additional documentation and others approve my forms and are ready to close, saving you points and interest on hard money.

Recently though, I had a short sale closing set on Friday with a Foreclosure Auction set on the following Tuesday, leaving 3 days after the closing to get them the money (which must be certified funds), and have them stop the Foreclosure Auction Sale. Obviously, when purchasing short sales, we don’t want to procrastinate it to the last minute due to the new guidelines with the Florida statutes about the timeline for postponing Foreclosure Auctions. These guidelines of making sure that the Plaintiff’s Counsel and/or the Defendant’s counsel has filed a Motion to Cancel Sale at least 10 to 15 days prior to the actual auction make it difficult to get Fannie Mae and Freddie Mac to act due to the fact they follow that guideline. Meaning, if you have passed the window of the 10-15 days and it’s down to only 8 days before the sale date, they will say you missed it and it’s too late to request postponement. However, there are times when “stuff” happens and you close within that 10-15 day timeline, not giving the Plaintiff’s Counsel enough time to get a Motion to Cancel heard before the original Judge. Our court system has turned into a mill! Even if both parties agree, Plaintiff and Defendant, they are having a hearing before the original Judge. When I worked for attorneys, all you had to do was prepare a Stipulation and Order of Postponement and/or Cancellation, both parties would have agreed and the Judge would sign it without a hearing. I believe the Plaintiff’s attorney just likes to charge the bank more money for representation and this would be too easy for all parties. The Foreclosure Auction could be held on line or before a different Judge that does not know the Seller’s situation, nor do they care. Many times, if the Sellers wait to file their Motion to Cancel in Pro Per (acting as their own counsel), the Foreclosure Auction Judge will deny it versus the Judge who has heard their case all along. Read More→

It’s pretty easy actually. Get (“contract”) (10) unwanted houses from a seller at a great price and turn around and wholesale all (10) to a cash buyer. Boom – easy right? We’ll of course it’s never THAT easy. What if it was your 1^st deal ever? That would be scary. What if it was your 6^th thru 15^th deal? That was my scenario. But I did it. And you can do it too – because I knew practically nothing when I did it – had done 5 deals at that point. So how is it possible?

Well it was around November timeframe (2012) and we had just done our very 1^st Wholesale deal a few weeks prior. Our 2^nd deal was with a guy who had (13) or so rental properties down in the “South Side” of St Pete, which is a very rough side of town for the most part and you can get houses pretty cheap. We had done a lot of “driving for dollars” in the South Side and found a house and sent a letter to the owner and they called us off of our letter. I think he said he would sell the house for $20K, so I went and looked at it. It was terrible! Terrible, terrible house! Old, rickety, wood frame, termite infested, tiny house in the rough side of town. So I offered $11K and we finally settled on $13K I believe. I wrote up the contract and would close in a few weeks. He also mentioned he had (12) more houses and he’d be interested in selling them all – but he’d let me know about those after we closed on this one. Read More→

Buyers should be extremely cautious about entering into a contract for deed to purchase a property. There are two main reasons. First, it is possible for the seller to lose control of the property while the buyer is making his payments according to the contract. Second, if a buyer defaults he will likely lose any equity developed in the property.

This first reason may seem counterintuitive. But, sellers are allowed to borrow against the same property they are selling under a contract for deed. In other words, a seller can go to a bank and obtain a mortgage on the exact property they have contracted to sell. They are also allowed to borrow against the property without notifying the contract-for-deed buyer.

The lien that a bank would place on the property would be superior to any rights that a buyer would have under an unfiled contract for deed.[1] Thus, if the seller defaults on his loan to the bank while the buyer is making his payments, then the buyer is in trouble. The bank would foreclose on the property, and the contract-for-deed buyer would lose all rights under the contract for deed, including the right to possess the property. Read More→

Self-Directed Real Estate IRAs are a powerful tool that allow for tax-free and tax-deferred profits. In some cases, capital gains taxes can even be avoided when investing within an IRA. Still many people are still unclear on how to transition from investing in real estate outside their IRA into investing in real estate within their IRA. We’ve compiled a cheat sheet summary in this article to serve as a reference tool.

The Account

First and most importantly, you need to open and fund a Self-Directed Real Estate IRA. This involves simply filling out an application which is quick and easy with American IRA [Hint: The American IRA staff will be standing by to help with this]. The second and most important part is to fund your new account. You can fund an account by making a contribution, transferring funds from another IRA, rolling over funds from another IRA, and/or any combination thereof. When transferring from another IRA, it is important that you follow up persistently with your prior custodian to make sure they move your funds in a timely manner [Remember: You are moving money “away” from them so they are in no hurry.].

Finding Assets

Once your account is open and funded, you are ready to find deals on those assets that you want to purchase. Before making an offer on that asset, make sure you review the list of prohibited assets to ensure that the asset you want to purchase is permitted. Prohibited assets include: life insurance, certain kinds of precious metals, art, alcoholic beverages, and collectibles. You also need to make sure you are not purchasing the asset from a prohibited individual including: yourself, your spouse, your descendants, your ascendants, nor their spouses or entities they own or control. Read More→

When most people start out in the real estate business they don’t have all the money they need to buy all the properties they want to buy. I may be describing you and I am certainly describing myself when I got started. If you don’t already have all the cash you will ever need to buy properties then you will need to meet the right people (investors and sponsors) to help you get your investing going.

Meeting great people is just the beginning to creating great business partnerships but it certainly is not the only aspect of the art. Here are some things to keep in mind when networking.

Friends are great but there is much more to a successful business partnership than just liking someone or getting along with them. I am friends with all of my close partners but the relationship didn’t start that way. When you first meet a new contact you should be asking yourself two questions.

What do they bring to this relationship?

What do you bring to this relationship? Read More→

In July, fans of common sense and decency everywhere won a huge victory – in California of all places! The California Appellate Court ruled that Chase created and recorded false documentation in order to prove ownership of a property so they could foreclose on it. This is big news because it shows that the major courts in some of the biggest states in the country are catching onto the long con the banks have been playing in this country for over a decade. Not only is this a good thing for the country in general, it is creating a huge opportunity for real estate investors to do some killer deals while helping homeowners in need.

In 1998, Jan and Rosalind Kalicki secured a mortgage for their home in San Marcos California. A specialty mortgage banking company originated the loan, and Washington Mutual became the servicer. After WaMu went into receivership, Chase bought a large amount of WaMu’s interests, including the Kalicki’s loan. After being foreclosed on in 2008, the Kalicki’s filed a suit for wrongful foreclosure against Chase in 2009. The Kalicki’s claim was that Chase claimed ownership of the loan based on fraudulent documents.

In 2012, the court ruled not only that Chase had created and recorded fake documentation to show that ownership of the loan had been transferred to Chase, it was also exposed that a Chase executive had created a document that “fraudulently represented that a prior assignment had been lost and that Chase owned the Kalickis’ mortgage.” The judge ruled that the Kalicki’s owned the property and quieted the title in their favor. Chase appealed the ruling, but lost. Read More→

Some would say home flipping, in which a buyer resells a property quickly for a profit, is on the decline as U.S. residential price gains slow and foreclosures dwindle. The exception are those individuals who know a valuation first approach to real estate is key to buying right. REIAComps.com insure you have a complete feeling of confidence and sense of control over all the deals you intend to flip.

In the second quarter of this year, almost 31,000 single-family houses were flipped, representing a solid percentage of U.S. home sales. These are quite consistent with data from earlier last year and not much different from the second three months of 2012, when prices bottomed after the crash. Remember we define a flip as a property sold within 12 months of purchase.

Real estate investors who are using REIAComps.com are making stronger profits and finding better opportunities for deals even after a two-year surge in property values that’s now slowing. The median existing-home price climbed 4.9 percent in July from a year earlier, compared with a 13.1 percent jump in the same month of 2013. Distressed homes still account for their share of sales going back to 2008. Read More→

Even before investing in real estate or considering it, you may have heard radio advertisements announcing a national “guru’s” meeting coming to town, seen the latest no money no credit infomercial, been pitched on $25,000 real estate investment programs, and the list goes on. I have been invited to many meetings, courses, classes, groups, etc. and have learned plenty but I didn’t spend thousands to do so. I have learned that not all “gurus” are created equal. Here are a few tips to consider before attending another course or pitch meeting.

1. Does this “guru” still invest in real estate TODAY? If they do not invest in today’s market I more than likely will not spend any money on this person. It is OK to make an exception if the meeting is free to attend to see for yourself if the info is still relevant. I personally have been in the real estate investment business for nearly a decade and the market has constantly changed. What did work years ago does not work as well as it once did.

2. If the person does invest, do they invest in your market? It may be an informative meeting but may not be overly useful in your market. I would strongly suggest that you find a person at your local REIA that invests in your local market. Read More→

It is the goal of this column to answer questions about QuickBooks and how it is used in the REI arena. Knowing how to record transactions in the proper way and have your set of books in good shape when it comes time for taxes. It is our intention to do this with you, the members, submitting questions to Karen@smallbusinessadvisor.biz, and getting answers here in this column.

Q: I need to segment my balance sheet AND income statement into three departments (classes). Which version of QuickBooks can provide me with this capability?

A: The lowest edition you can use to have classes on both the balance sheet and the income statement is the QuickBooks Premier.

 Q: It takes me all day to reconcile my bank account. I thought it was supposed to be easy in QuickBooks. Every rent check I receive shows up as a separate deposit in my check register, but when I go to the bank I deposit several checks at a time in one deposit. Why doesn’t it show up the same in my register as on my bank statement.

A; If you did not turn on the “Undeposited Funds” feature in preferences, then QuickBooks will put each received payment directly to the bank. You want the “Undeposited Funds” feature on so you can “collect” your received payments together as one deposit duplicating what you actually take to the bank. Read More→