Atlanta Real Estate Investors Alliance Blog
Master Lease Options 101
Posted on December 30, 2013 byLease options have made a big comeback in today’s market. They are great ways to take control of real estate without using banks or lenders. They are also a great way to fix up a distressed asset that a bank won’t lend on. Once you have the property up and running, you can then sell for quick cash or refinance for a long term hold.
A master lease option is a set of two contracts that give us the right to control the operations and the sale of a property. The term “master” is typically given when you are doing this in multifamily and is just a lease option when doing single family deals. The master lease gives us the right to “rent” an entire property with the right to sublet the units. By implementing the master lease we can effectively take control of the property and all of its operations. We can also control the cash flow!
The master lease side of the agreement is what will allow you to fix any problems the deal may have before you sell it or refinance with a lender. You essentially become the new owner without having to actually purchase the property. This will allow you to hire new management to take control of the deal and to implement your plan of action. Read More→
Hitting the Bulls Eye: Becoming a Hunter
Posted on December 30, 2013 byOwners of vacant houses can be hard to find, so I am about to give you some insider tips so you can hunt these elusive owners…
Once upon a time, I found a boarded up house and wanted to find the owner. Given my experience, I knew that trying to find the owner through tax records might get me an address, but mailing anything to that address would be a waste of my hard earned 42 cents. I needed to find another way to hunt this owner. So I started thinking like a bill collector. I did research on the bill collector site to learn how they locate people and get their money from people who “skipped.”
Here is what I have found: most investors are lazy. If they send the postcard to the address on file and get the card back, they have run out of creative ideas and move on. I have learned, though, that diligence pays off. One more step, the one that the lazy investor doesn’t take, will be the one most likely to get you results.
Great News! Once you find the owners, they are very easy to negotiate with because you are solving a huge problem for them. They won’t go out and find other investors at a higher price. They will wonder how YOU found them. Read More→
Turn Your TRASH Into CASH – How to Make More Money by Selling The Leads You Get… Even if You Don’t Buy The House! – Part 1
Posted on December 30, 2013 byNot too long ago, I wrote a sweet 3-part article on how to fill your pipeline full of leads & deals. I hope by now that you’re using that advice to get lots of leads coming in that you can work with. If not, then go back & read it again!
And now that you (hopefully) have leads coming in, it’s time to introduce you to a new technique to make money. I’m going to try to keep this brief, because this technique is very simple, and we don’t want to complicate it. Don’t do like I did in the beginning & over-think this.
It works & it works well – IF you simply take action & DO it!
Here’s The Problem: As you begin to market for sellers of houses (motivated or not), you’re going to come across a lot of various stories, situations, and circumstances. Sometimes, you might find that you’re not able to buy the seller’s house or do business with them. There are a lot of reasons why this is possible. Read More→
Merry Christmas & Happy New Year from Atlanta REIA
Posted on December 23, 2013 by
All of us at Atlanta REIA want to thank you so much for being a part of our organization this year and want to wish you and yours a very Merry Christmas and a Very Happy, Healthy and Wealthy New Year! We look forward to doing much more in 2014… More deals, more networking opportunities, more affordable training and workshops and more fun! We’ll see you on next year! Thanks again and God Bless!
Stay Focused On Your Area
Posted on December 23, 2013 bySome real estate investors invest in a concentrated area. Others work huge, multi-county areas. In our case, we work a five-mile circle around the Cartersville, Georgia Wal-Mart. This allows us to better manage our rental properties, plus, when a seller calls, we can quickly get to their house.
Staying in our five-mile circle takes a lot of discipline. We often get calls from motivated sellers a county or two away. Having a great deal placed on your plate, then having to pass it on to another investor, flat out hurts.
For example, last week a seller called, desperate to sell quickly. She owned a three-bedroom, two-bath mobile home in a trailer park. The home was in great condition and needed little work. We agreed to a purchase price of $4,500.
These kinds of deals are called Lonnie Deals. A Lonnie Deal is when you buy a mobile home in a park for cash (you own the trailer, not the dirt), then sell it on time to an owner/occupant. You may think this is a silly deal, but believe me, Lonnie Deals are the highest yielding deals we do.
Let’s look at the numbers: We’d sell this nice mobile home for $9,000. The buyer would give us $500 down. Here are the terms of the note: $250 per month, for 48 months, at 18.07% interest. So what’s the yearly yield on a simple deal like this? Would you believe 70.08%? Try finding a bank that will pay you 70% interest on your savings account! Read More→
Are Women Better Real Estate Investors?
Posted on December 23, 2013 byI must start by saying: If you’re looking for politically correct, then I’m DEFINITELY not your guy!
Kim and I were discussing who is better at real estate investing – men or women. Lord knows men and women are very different creatures. Men are clear, concise and rational thinkers. Women are not.
Seriously, I think women can be better – a LOT better – at real estate investing than men. To prove this, our real estate investor’s meeting this month is about successful women real estate investors. Our panel will be four women who, between them, do over – way over – 100 deals a year!
Three reasons why I think women can be better at real estate investing: 1) Great time management. 2) Not ego driven. 3) Aren’t scared of hard, dirty work. Read More→
Cut Through The Obvious
Posted on December 23, 2013 byThis past weekend, I was one of the instructors who taught at a boot camp for new real estate investors. At the end of the four-day event, the frequently asked question was, “What do I do first?”
The advice from the instructors varied. One said to spend the week reviewing the course notes. Another told the investors to put their real estate investing team together. Several thought it best to work on a marketing plan.
When it comes to advising would-be investors how to start – or seasoned investors how to get back on track – I often feel like a salmon swimming upstream. I think the FIRST, most important thing an investor needs to do is to get face-to-face with sellers as SOON, and as OFTEN, as possible!
A number of the attendees didn’t care too much for this advice. One woman best summed up the fears in the room when she said, “I’m not sure what to say to a seller. I’m not comfortable creatively structuring a win-win deal. I don’t know what to do if the seller accepts my offer.” Read More→
Vacancies Are a Fact of Life
Posted on December 23, 2013 byWhy would a reasonably sane person own rental property? After all, we’ve all heard lots of landlording horror stories, right? You know the ones: the tenants refuse to pay rent, the tenants trash the property, the tenants move out in the middle of the night, etc.
Here’s something to consider: We had 61 investors attend our monthly real estate investors meeting in October. These 61 mom-and-pop investors control 573 properties. A couple of weeks back, I (along with seven other instructors) was asked to teach at a boot camp for new real estate investors. The instructors controlled 122 properties. All told, that’s 69 investors controlling almost 700 properties – incredible, isn’t it?
So why do all these folks own rental property? Easy answer: They want MAILBOX MONEY! What’s mailbox money? It’s when you get checks in the mail because your capital is working for you, instead of you working for your capital.
Are there other ways to get mailbox money? Sure – some folks own stock and live off the dividends. We have friends who make purchase-money loans to real estate investors and live off the interest they make. Of course, there’s also a one-in-a-billion chance that you’ll win the lottery – talk about a shaky retirement plan! Read More→
He Appealed to My Greed
Posted on December 23, 2013 byA few months back, one of our rental properties went vacant. It’s a nice three-bedroom, two-bath home with a fenced yard. After a bit of paint and clean up, we stuck a For Rent sign on the lawn.
Over the course of two weeks, we received several great applications. One application stood out above all the others. The applicants had been on their jobs for years, they had solid references, they had the move-in funds ready to go, and they kept their current residence immaculate. They would make PERFECT tenants!
Shortly before I called these ideal tenants to give them the good news that they got the house, I got a call from someone who wanted to buy the property. They explained that their credit stunk, but they had $10,000 to put down.
Their $10,000 down payment got my attention and put the brakes on everything. A thorough background check revealed that the prospective buyers didn’t pay their bills or maintain their current residence well.
Over coffee, the potential buyers explained that they had just inherited $20,000, had always wanted their own home, loved the house we had on the market, and buying it – if we gave them owner financing – would be a dream come true. Read More→
But I Don’t Have the Money
Posted on December 23, 2013 byIs real estate a good, safe, profitable investment? Consider this: More millionaires have made their fortunes using real estate as their primary investment over any other investment vehicles – including stocks and bonds.
With real estate, an average American with no college education can buy a house – often at less than 50 cents on the dollar – with little or none of his own money, get great tax breaks, and here’s the best part: have his tenant (or buyer) pay for it all!
Can you name any other investment that can match these benefits? No? So then why aren’t a lot more folks investing in real estate? Why do so many people choose to be realtors instead of investors – lord knows, investing pays a lot more!
The answer to these questions is best summed up by the excuse most would-be investors give: “I’d love to invest in real estate, but I don’t have the money, and the bank won’t loan me a dime.” Folks, this is one lame, stinkin’ excuse!
Rarely do Kim and I go to banks for our purchase funds. In fact, since 2005, we can count on three fingers the total number of loans we’ve gotten from banks to do our deals. So how are we paying for them? Read More→
I’m A Failure…Or Am I?
Posted on December 23, 2013 byLast month, I did a knocking-on-sellers’-doors challenge. To help folks better understand what real estate investing is really like, I posted my daily results on North Georgia REIA’s Facebook page – including pictures and many of the creative offers I structured!
For the month, I spent 9 days out getting face-to-face with sellers. In total, I talked to 30 sellers at the door, 27 invited me in, and I made 23 written offers – including a $1 million offer on a $125,000 house!
Yesterday, I spoke with an investor who followed me on Facebook. He said, “If I had been you, I would never have done a public challenge.” “Why not?” I asked. He answered, “Because you talked to all those sellers but didn’t find a single deal. Now everyone is gonna think you’re nothing more than a big, fat, ball-headed failure!” Read More→
Gary Johnston
Posted on December 23, 2013 by
Gary Johnston has been an active investor in real estate and notes for over 20 years. He grew up without a lot of money in a small logging and ranching community in eastern Oregon. His dad always said, “There’s a big difference between being broke and being poor.” He taught Gary that one is a temporary money state and the other is a debilitating mental process. Gary was fortunate to have mentors like his parents and a neighboring rancher named Norbert Volny, who taught him, “You’ll never get rich on a W-2.” Volny encouraged Gary from an early age to build assets that generate cash flow.
After high school Gary attended Oregon Institute of Technology, where he received a bachelor of science in software engineering. Over the next sixteen years he worked for Hewlett-Packard and earned a master of science in management from Purdue. During that time he applied what he learned from my parents, Volny and other mentors he met along the way which as to buy real estate and built assets that generate cash flow. He was fortunate enough to be able to leave HP and the rat race at the age of thirty-eight.
Gary now teaches people how to build a solid financial foundation and obtain financial freedom through assets that generate cash flow. He can’t teach you how to make a million dollars in 30 days, but he can teach you how to build a solid financial foundation and how to make your money make money for you.
