Atlanta Real Estate Investors Alliance Blog

This month I’m going to give you the other houses I believe you need to avoid if you plan to buy and sell real estate quickly and profitably. I feel very strongly that you need to know about each of these houses so you never find yourself trying to rent or sell properties that just won’t sell. All of the houses I mention have very difficult issues you can’t easily overcome. Why would you want to buy one of these houses when there are hundreds of houses that do not have these issues?

Houses Where Someone Was Murdered or Committed Suicide.

I won’t buy these houses because I fear if a new family moved into a house where someone was murdered or committed suicide without knowledge of what happened there and the children at school were to tell the new children now living in the house what actually happened could cause trauma for the children now living in the house and I don’t want to be responsible for doing that to the kids.

Houses That Are Just Plain UGLY.

Ugly will always be difficult to rent or sell and will be far more costly to correct the problem. When you find a house that is just plain ugly turn and walk away. There are thousands of houses for sale, so why would you want to waste your time trying to completely overhaul an ugly house when there are plenty of pretty houses available across the country? Read More→

Another way I use to fund my deals is by utilizing money from private lenders. Hard money lenders and private lenders are distinctly different in their approach to lending you money.

A private lender is a person who will fund your deals usually with no points and a much lower interest rate. There are usually no pre-payment penalties and they are usually more flexible with regard to the terms of the loan. For example, they may allow you to pay part or all of the interest payments at the end of the loan. So the cost of the money is a lot less in the long run. Working with private lenders offers me a lot more flexibility as a real estate investor, so if a private lender will allow me to pay all of the interest at the end of the loan for example, I may offer them a higher interest rate or maybe a point or two for allowing me to pay at the end. If I can pay all of the interest at the end of the loan, then the property cash flows at one hundred percent each month. This gives me the opportunity to fund multiple rehabs at the same time without having to worry about monthly payments. Then once I sell the property the private lender receives the principal amount they loaned me and all of the interest that has accrued.

There are several ways for you to find private lenders for your real estate investing business. One way is to simply check with people around you (relatives or friends) who may have funds available that are not drawing a very high interest rate in a CD, IRA or money market account. In today’s market that shouldn’t be too difficult. I have found several of my own private lenders this way. Read More→

In part two of my article series on the contract for deed, I promised to discuss the most popular remedies a seller can select when a buyer defaults under a contract for deed, including the risk the seller may owe money to the buyer when the buyer defaults.

The most popular options when a buyer defaults under a contract for deed are (1) to rescind the contract and evict the occupying party or (2) to rescind the contract and repossess the property (if it is vacant).  However, when the contract is rescinded, the law requires that the parties be restored to their original status.[1]  In the context of a contract for deed, restoring the parties to their original status means following a restitution formula.  In accordance with the formula, the seller must account to the buyer: (1) all payments made, (2) the value of improvements made, and (3) damages incurred.[2]  Let me give an example:

Suppose Buyer Bob buys a property from Seller Sally using a contract for deed.  The market rent for the property is $500 per month.  Bob and Sally agree that Bob will make a $10,000 down payment and make payments of $1,000 per month for five years.  At the end of the five years Bob will receive the deed, free and clear.  However, two years into the agreement, and after Bob has spent $5,000 renovating the property, he defaults.  In response, Sally decides to rescind the contract and evict him.  Sally is legally entitled to do this, but now the parties need to be restored according to the legal formula – which means she must give an account to Bob. Read More→

The Reverse Mortgage (RM) market has had massive growth in the last decade. This phenomenon makes ripe a great opportunity for investor success as Americans live longer.

Basically a RM it is a product to help seniors finance their retirement in an age of longer lifespans, long-term stagnant wages and fewer younger workers to fund public and private retirement programs. An RM is similar to a refinance but different in that a monthly payment from the overall principle is paid monthly like an annuity.

Frankly, a significant group of older Americans just don’t have enough to retire. Thus, an RM is a product that needs to exist. We as investors come in when the family member who has to sell the house to cover the principle which was utilized up to the time the family member passes away. Believe it or not, this is literally happening today.

For those of you already connected to REIAComps , the control and feeling of confidence you have over your deals is priceless. Add these new Reverse Mortgage deals to your tool belt and it gets even sweeter. Using REIAComps to investigate the value of houses as they come to market, against other less reliable sources continues to be a no brainer. Read More→

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→

Are you just getting started in real estate or are you thinking about getting in? This article is to help you get off to a great start in the business.

Step 1

What are you trying to buy? Do you want to start small such as single family houses or smaller multifamily such as 2-4 units? Maybe you want to go big early and get into commercial real estate such as apartment buildings or self-storage.  Whatever your goal is, you need to start with an education. Find material on that type of asset that will teach you the basics of what you need to know.

Step 2

Know your market. Now that you know what you want to buy, you need to know where you are going to buy it. You need to decide on a market or city. My suggestion is to start in your own backyard. I define “backyard” as the area within a 1 hour drive from your home. The closer to home you can start the better. The more travel you have to do to get to your property, the more obstacles will get in your way. The cost of travel goes up (possibly plane tickets) the farther away from home you get as well.  Lenders and investors get a lot less comfortable with your deal as the distance from you increases.

Once you have picked a market you will need to study that area. Here are some things to know… Read More→

If you have too many emails in your inbox you can change your set up and create direct paths to instruct your emails to go directly into your subfolders without you even having to look at them and then next to the folder you created on the left there will be a number, for example:  Seller leads (1), which means you have 1 unread email in the Seller lead subfolder.

Statistics show that 75% of workers feel colleagues overuse “reply to all.”  I can attest to this.  I always ask my students to email only one person in my office versus emailing the admin, Kristen, and myself.  That is a waste of everyone’s time, as the email was only supposed to go to one person, not three.  15% of workers admit that they themselves overuse “reply to all.” 

70% of workers often receive email with vague subject lines.  I always recommend if you are emailing someone about a particular property that you put the address in the subject line. This way, in the future, you can search your emails more efficiently, if you don’t file them away.  I often use the subject line as a quick message, so it would read:  “Need copy of Seller info sheet for Smith.”  Then there would be nothing in the body of the email.  However, I was informed by one of my students, his phone does not allow him to see all of the subject line, so I quit doing that as much. Read More→

When getting started in real estate investing and especially Wholesaling, usually everyone is focused on what they need to do. And that is pretty obvious – get educated, put out marketing, talk to sellers and buyers, make offers, negotiate, and close deals. We usually know what we NEED to do. Whether we do it or not is a whole separate issue/article. So let’s set that aside for the moment and what I want to talk about now is what NOT to do when Wholesaling.

I will call these the DON’Ts of Wholesaling.

1. Don’t get hung up on the small stuff: I know a lot of people over analyze the situation and think that they need to create the perfect business entity before they get started; LLC or Incorporate?; What’s my cool business name going to be?; I need to design a cool logo for my company; I need to get cool looking business cards before I go to any networking events; I need to get my website up before I send any mailers; ETC. This could slow somebody down for months. The point is, get your marketing out 1^st, get calls 1^st, make offers 1^st, get a deal 1^st. Then worry about this small stuff.
2. Don’t sign up for ALL of the “Guru’s” courses out there: I know everyone is looking for that Silver Bullet of an idea that is going to get them over the hump and make everything Easy as Pie. But what happens is you start getting too many ideas and techniques in your head and you get the “Shiny Object Syndrome” where you bounce around from technique to technique or are just stuck in Learning Mode or ‘Paralysis by Analysis’ – and you never really get started in full force. Pick a way to do it (there’s not that many) – and just do it. And stay focused. There’s always a new course around the corner. Ignore it. Put your blinders on and keep plugging along. Read More→

As many of you know, our CEO and Senior Vice President are also avid real estate investors. Their experience has proven invaluable in servicing our clients most especially in relation to real estate closings. What you may not realize is that our client base consists largely of people who are using their Self-Directed IRAs to invest in real estate. This is a win-win for both our clients and the realtors who are servicing those clients.

Even more promising for both groups is that the real estate market is perfect for investors. Prices are still relatively low and there is a surplus of homes available. So, you may be wondering how you can benefit from the Self-Directed IRA/Real Estate boom. The answer is simple…any one can benefit from this boom. Whether you are an investor or a realtor, there is plenty of opportunity to increase your wealth. In part 1 of this article, we will speak to realtors about what they can do to obtain new clients and generate more income by working with Self-Directed IRA investors.

The first and most important thing is to get educated about Self-Directed IRAs. Listen, before you think this is a sales pitch, hear me out. Self-Directed IRA investors have something very important, money. They have the funds to close the deals. Consider that for a moment and you will realize that means, in many cases, financing will not be a factor. As you know, financing often results in road blocks along the way that can prevent you from closing the deal and collecting your commission. The other thing that many Self-Directed IRA investors have is experience. They are familiar with the real estate process which lessens the chance of a delayed and/or failed closing due to a buyer’s inexperience. Self-Directed IRA investors are also great repeat clients. They buy numerous properties and the better their success, the more they buy. Read More→

It is the goal of this column to answer questions about QuickBooks and how it is used in the REI arena. Know 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 by you, the members submitting questions to Karen@smallbusinessadvisor.biz, and getting answers here in this column.

Q: I printed out my P&L from QuickBooks® and it shows that the bottom line Net Income is $30,000.00 but, my bank account does not have that much in it.  Where is this money?

A: Every month you should be printing out the P&L (Income Statement) AND your Balance Sheet.  Each of these reports is only one half the picture, you need both together to know and understand your finances.  Look on the Balance Sheet in a couple of areas: The Equity section may show where you took money from the business and spent it on personal items; or, you may have mortgages/loans for properties that you are paying every month in the Liability section.  Most likely this is where the money is that is not showing up in the bank. Read More→

When one decides to invest, in most cases, he/she starts out by themselves or with a partner or two. The over-head expenses are minimal and only a few systems are put into place. However, over time as the amount of contracts increase and the number of projects grow expansion is required. The question is, how do you know how big to expand or if expansion may be too soon. This has been asked and will continue to be asked by all wholesalers, investors and all other entrepreneurs.

When one mentions expansion in relation to real estate, it may mean a number of different things. It could mean taking on more renovation projects, taking on employees instead of only commission workers, getting an office space or bigger space, a more sophisticated CRM system, hiring a project manager to supervise the projects, etc. First, check your current “structure” and make sure that everything that is currently in place is scalable. As a small to mid-size operation the system you have in place now may not work on a larger scale. You want to streamline your operation now and find out if it is truly ready to be taken to the next level. Real estate, specifically investment real estate, is not the easiest business to streamline unless you pick a niche and only focus on that niche. As an investor you know there are tons of ways to put a deal together. Every month even the REIA puts together a meeting focusing on different ways one can invest in real estate. Most real estate investment companies I have met focus and structure their company behind one niche, such as flipping houses, but still continue to do other things when the opportunity presents itself. For example, if a person focuses his/her business on buying, fixing and flipping properties he/she will still wholesale, subject-to, rent, owner finance, etc. a property if the opportunity was presented and it made sense. Read More→

Were you or someone you know foreclosed on by a lender who is widely known to committed massive and systemic fraud in their mortgage practices?  Have no fear.  After having been bilked by independent consultants to the tune of $2 billion dollars, the Office of the Comptroller of the Currency has given up investigating the issue itself and asked the banks to please hand over any proof they might have of having improperly foreclosed on people.

That’s right.  After being provided with $17 trillion in various forms of taxpayer-funded relief, the government is now allowing the banks to be in charge of the investigation into their own foreclosures.

There is a charitable way to view this development.  The regulators could be setting up the banks to nail them for failing to comply with regulations.  This would extend the statue of limitations for future federal actions against the banks.  This tactic is possible, but forgive me for thinking it slightly more likely that the government is abdicating its responsibility to the banks after having been nailed for squandering the time and money it was given to handle the problem on its own.

If you were worried that this was a sign that the government wasn’t serious about prosecuting the people and institutions responsible for setting up one of the biggest financial crises in history, fear not!  The District Attorney for New York County has moved forward with the prosecution of Abacus Bank.  Read More→