Atlanta Real Estate Investors Alliance Blog

I recently had a telephone conversation with one of my students who asked me what I thought was going to be the next best strategy to use to do more deals in 2014. My student is thinking the market is making a real come back. He is very excited because he is seeing house prices starting to go up, house sales are increasing every month and he had just been told by a traveling Guru that the market has huge profit potential and the market is headed back to 2006 price levels just like it was before the crash.

I can truly appreciate his bright eyes and positive enthusiasm. This student is someone who spends time and money constantly in seminar land listening about the latest niche that will be the next million dollar method for investors to create wealth. I must admit that some of the most recent strategies being pitched could, if done using thorough research and use the correct paperwork could be profitable. My problem with all of these new strategies…. Most of these new strategies aren’t really new. Many have been around for years. The problem, many new investors quickly bore with each strategy as they hear about the next great money making idea that is making investors wealthy. Most of these new strategies will require large sums of money to learn and implement. As market conditions continually change another will soon appear and the investor is again quickly off in a different direction without perfecting the last. Read More→

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→

In Part One of this Article, we discussed what most people do with leads, a typical wholesale deal, and a few reasons why you might NOT buy a house. And just when things were getting good & was about to reveal how to STILL make money even when you DON’T do the deal, I had to leave you hanging and make you wait until this part of the article came out to reveal the secret. Sorry about that.  :)

But here’s where it gets interesting.  So keep reading, won’t you?

Typically, if you can’t get a deal negotiated with a seller (usually because they don’t want to accept your low, wholesale price offer), you’d be stuck. You’d either throw the lead in the trash, or you’d ask them if it would be ok to call them back in a few weeks to see how things are going, then remind them of your offer to buy at your low price.  Yeah, sometimes you’d get those offers accepted.  Sometimes.

So what do you do if you still want to profit on this deal that you’ve already spent some time on?

Here’s your answer.  Are you ready?  Good… Read More→

One of my favorite techniques for locating motivated sellers in my real estate investing business is to create direct mail campaigns targeting Senior Home Owners in my area. These homeowners are a good source of leads for my business for a variety of reasons.

After having bought and sold hundreds of properties throughout my real estate investing career, I have discovered that senior home owners may be interested in selling a property for many reasons. Most of the time these homes are in nice neighborhoods where people want to live.

One reason a senior home owner might want to sell would be that a spouse has passed away and the remaining home owner doesn’t want to continue living in the property alone. Or perhaps the senior home owner wants to move in with a relative or relocate to another state and sell their home. The homeowner may want to move into a smaller home or an assisted living facility. The home they have for sale may also have been a vacation property they owned or perhaps a retirement home they purchased and now they either don’t want to or are unable to live in it any longer. We have purchased homes that have been inherited by a senior home owner that they simply don’t want or need. Read More→

Did the title of the article get your attention?  I thought so.  Money does love speed.  Money in general loves speed.  That means getting off your “you know what” and putting in to action whatever it is that needs to be done in your business (and in life).  And the faster you do it, the more likely you are to be rewarded for it, financially.  This will be one of my resolutions for this year – act with more Speed.

Let’s face it. You’re not getting any younger, the clock is always ticking. And, the sooner you realize the inherent value of speed, I promise you this; the more seriously you take your goals, the more urgency you will build into your daily habits.

Ever watched a commercial for some gadget or concept that you had thought of in the past and said “hey – that was my idea”?  It may have been your idea and you should have acted on it.  Instead, somebody else did and now they are billionaires. (Yep – I thought of Facebook too, but Mark Zuckerberg beat me to it).

But I’m not talking about just ideas.  In general, things tend to work out better when you act on it faster.  I don’t recall ever succeeding at something because I got there last.

Naturally, I’m going to relate this concept to Real Estate Investing, where Speed = Money.  Because Money loves Speed. Read More→

When you know the best pockets or market areas around the U.S. to find discounted real estate, you are half way home. All that is left is evaluating the inventory for maximum profit. For those of you connected to REIAComps , the control and feeling of confidence you have over your deals is priceless. Using REIAComps to investigate the value of “Shadow Inventory” houses as they come to market, against the recent sold comparables, will provide you a solid position to “make your profit when you buy”.

First, let’s define “Shadow Inventory”. The general definition goes like this; the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of properties that are seriously delinquent, in foreclosure or held as REO by mortgage servicers, but not currently listed on multiple listing services MLS’s.

CoreLogic released its November National Foreclosure Report with a supplement featuring quarterly shadow inventory data as of October 2013. According to CoreLogic analysis there were 46,000 completed foreclosures in the United States in November 2013, down from 64,000 in November 2012, a year-over-year decrease of 29 percent. On a month-over-month basis, completed foreclosures decreased 8.3 percent, from 50,000 in October 2013. Read More→

When working with a Seller on purchasing a short sale it is very important to know the terms and conditions that the new buyer must uphold with the Homeowners Associations. Recently, we started working on a short sale wherein the Seller owed the Homeowner Association a fee of $457.00 per month and another Homeowner Association issue wherein they would only allow the Buyer to be an owner occupant. The Homeowner Association claims that the percentage of rentals have been filled and since that quota was met, this leaves only owner occupants eligible to purchase the property. Now your pool of buyers has been decreased greatly leaving only homeowners to buy the property.

The first thing you need to do when obtaining a short sale or any type of deal from a Seller, that you are interested in purchasing the property to fix and flip or just rent, is to obtain the Homeowner Associations Bylaws. There are Bylaws and Declarations that the Homeowners Associations are to provide to a new buyer. Here are some of the things you must look for to prevent any show-stoppers: Read More→

Now that January is past, it’s time to settle in and think about some of the more important but often forgotten items. Chief among them is your beneficiary designations. The person or entity currently slated to inherit your Self-Directed IRA account may no longer be the person you want to inherit your account. This applies to your Self-Directed IRA, accounts under employer plans such as 401(k)s, 403(b)s, profit sharing plans, pension plans, and the many assets you have worked hard to acquire. There are numerous documented cases of individuals or estates inheriting retirement accounts and assets when the owner wanted the beneficiary to be a different party. The following tips can help you to track your beneficiaries and assets:

• Maintain a beneficiary file: Create a list of all of your retirement accounts/assets and identify the named beneficiaries. If you do not already maintain all of this information in one easily accessible area, now may be a good time to start. This will help you to keep track of both your current beneficiary designations and all of your assets.
• Perform annual check-ups: Check your beneficiary forms and your Will at least once per year to determine if you need to make any changes. Events involving your beneficiaries may necessitate changes to your current named beneficiaries. For instance, you may have gotten married or divorced, and need to update your beneficiary form to add or remove your spouse or former spouse. Read More→

Says Bruce Silverman, “Atlanta Private Lending has been the premier Hard Money lender of choice for many of Atlanta’s top rehabbers“. Founded in 2007 by James Melton, a top Account Executive for Yale Mortgage, Atlanta Private Lending has always focused on customer service.  As a direct lender, based right here in Atlanta for the past 7 years, APL has the speed, flexibility and knowledge of the marketplace that few can offer. With quick answers to customer loan questions, common sense underwriting and fast closings to meet funding needs, Atlanta Private Lending is known as a “Rehab” Lender but has many other products to offer such as construction loans, commercial “bridge” loans, no doc equity lending, asset based lending and cash out refinance.

APL has two new loan programs that were designed specifically for investors. For wholesalers they now have short term transactional funding. This is something that can be a key ingredient to the success of any wholesaler. Secondly, for experienced rehabbers they now offer an “Equity Sharing” program. This program is designed for the rehabber who may have all their available cash tied up in current projects but has just had a creampuff of a deal fall in their lap. APL will provide 100% of the costs to do the loan, up to 70% ARV and then they will split the profits, or “share equity”. Read More→

By this time, most people are at least aware that mortgage banks were less than honest in how they created and sold mortgage backed securities over the last 15 years.  It has driven a lot of negative sentiment towards the banks since the housing market crashed in late 2007, but very few people have a clear understanding of exactly what the banks did.  That is completely understandable because the banks set up an extremely convoluted system of fake transactions specifically to avoid people catching on to what they were doing.  In this article I am going to attempt to break it down into simple terms.

As the housing market heated up in the early 2000s, investors began to invest in what are known as mortgage backed securities.  These are securities that consist of large pools of mortgages.  The idea behind these investments was to capitalize on the housing boom while minimizing their risk.

In order to do this, investors had to work through brokers who compiled mortgages into securities on the investors’ behalf.

The way the investors would invest in these funds was to use their money to fund a trust that would acquire mortgages either by originating them as the lender, or by purchasing existing mortgages.  In a perfect world, the trust itself would then be the lender or purchaser designated on the mortgage. Read More→

I am often asked if an IRA-owned LLC or trust makes sense. Well, like a lot of things, it depends. If your normal custodial account is working well for you, there may be little reason to add these structures. But there are situations for which you may want to consider them as covered below.

Advantages

Promoters push the IRA owned entities as a way for you to have checkbook control over your IRA funds. While it is an arguable point as to whether you should be the manager or trustee of your IRA-owned LLC or trust (we will postpone that discussion until the class next month), there are other reasons to use these entities. For example,

Privacy – These IRA-owned entities will keep individual IRA account holder’s names off the public records. This is true even for low liability paper investments such as contracts, notes, mortgages and options as well as real property ownership. 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 have used my business checking/debit card to make a number of purchases that were for me personally and have nothing to do with my business – how can I fix this?

A: You have two choices: You can reimburse the company for those expenses and put them in an account (equity) called Personal Expense and then when you make the deposit you apply that to the same account.  Or you can just leave them in the Equity account and this will become income to you at the end of the year. Read More→