Atlanta Real Estate Investors Alliance Blog

To Sign or Not to Sign

Posted on May 31, 2013 by

Over the years, it has become easier and easier to identify a motivated seller. As an active real estate investor you will run across plenty of, what I like to call, price checker. These sellers have no motivation to sell but will sell for the right price. The problem is the right price to these price checkers rarely matches an investor’s price.  But, when you do identify a motivated seller, it is up to you to find out what will make the seller commit to you. Commitment may mean a verbal commitment or a contract. I have purchased numerous properties directly from home owners and each person committed based on different motivational factors. Many times the price was agreed on but the seller still did not sign. The reasons for the sellers not signing have been all over the board.

Once, a seller did not sign because he was an older gentleman and was not comfortable signing a contract on an ipad. He wanted a physical contract to sign and a copy for himself. I told the seller I would go down the street to print one out but he assured me that the deal was mine. He said I could return the next day and he would sign. He promised he would not sell to anyone else. The next day, I returned with a physical paper contract and he signed as promised. Read More→

Rehabbing How-to’s

Posted on May 30, 2013 by

In 1988, I was living in Paris, France with my brother, Sam.  Sam was a fashion photographer.  His job was to take pictures of lots of very pretty girls – and get paid to do it!  Needless to say, I L-O-V-E-D Paris!

I got a call from my dad.  My grandmother was very sick.  He needed me to fly home immediately.  Soon after I arrived, my grandmother passed away.  Part of settling her estate was getting her house, which was built in 1930, fixed up and sold.  This was my first attempt at a major rehab.

At first, I thought: No problem.  I’m mechanical and handy with tools.  I quickly realized that I didn’t know what I was doing and was in way over my head.  Each repair that I did took much longer and cost a lot more than estimated.  My frustration level shot through the ceiling.  All the while, my dad kept calling and asking, “What’s taking you so long, boy?”  I nearly went postal!

Fast forward to today.  Last month, Kim and I bought a house on Green Acre in Cartersville, Georgia.  It was built in 1969 and needed a ton of updating – walls, wiring, plumbing, kitchen, bath, fixtures, flooring, etc.  How does this rehab compare to my grandmother’s rehab?  There’s no comparison: the Green Acre rehab is as easy as eating pie. Read More→

What a difference three years can make!  At the May 2010 foreclosure auction, there were only 5 real estate investors on the courthouse steps bidding on 186 foreclosures advertised for sale in the legal section of the newspaper.  Two days ago, at the May 2013 auction, there were over sixty investors bidding on less than forty properties!  Good golly, Miss Molly!

Here’s just one example of how ridiculously high the bidders are pushing sale prices on the steps: A house at 15 Waters Edge in Acworth, Georgia had an opening bid of $57,500.  A house a few doors away sold at auction last summer for around $85,000.  The two houses are similar to each other. 

Our maximum bid price for 15 Waters Edge was $70,000.  The house needed a shave and haircut rehab – about $12,000 to bring it into perfect condition.  As the property was cried, the top-bid price quickly zoomed north of $100,000 – then climbed to $125,000!  When someone bid $150,000, my jaw hit the ground.  The winning bid on the property was an astronomical $168,000 – $30,000 more than the property’s current fair market value! Read More→

What’s Old Is What’s New

Posted on May 28, 2013 by

April’s foreclosure auction put Kim and me on a quest: To discover where the best real estate investing deals can be found.  Due to a huge increase in the number of bidders, a significant decrease in the number of foreclosures and rapidly shrinking profit margins, the most profitable deals are no longer happening on the courthouse steps.

To solve the mystery: “Where to find the best deals now?” Kim and I made a goal on April 5th to knock on doors and talk to 60 sellers by the end of the month.  We started by knocking on every homeowner’s door whose home was slated to be sold at the May 7th foreclosure auction.  In addition, every time we saw a For Sale sign in a yard, we knocked on that door, too.  (NOTE: You can read about our daily door-knocking results by going to North Georgia REIA’s Facebook page.)

What is the result of April’s door knocking?  We bought one house last week, we’re closing on a second this week (it’s a subject-to deal), and we have two short sale offers pending on properties that were due to be cried at May’s foreclosure auction.

To be clear: At the April 2nd foreclosure auction, Kim and I got outbid – and outbid by a lot – on every one of our target properties.  In other words, we got our teeth kicked in and walked away with no deals and had none in the pipeline.  Knocking on doors immediately turned on the spicket and caused deals to gushed forth…and best of all, we had little competition! Read More→

If you’ve been following our real estate investing column, you know that since the beginning of April, Kim and I have been on a quest to find out where the cheese moved. 

At April’s foreclosure auction, we noticed a sudden and dramatic shift in the real estate market.  For reasons pointed out in earlier columns, the foreclosure auction is no longer the best place to find deals.  The low-hanging fruit is G-O-N-E!  (You can find our earlier columns here.)

We think the best way to find out where the cheese moved is to go to the frontlines.  For this reason, April’s goal is to meet face-to-face with 60 sellers.

I’m writing this on April 17, 2013.  Here are our results so far this month:  I’ve met with 35 sellers; we’ve found and bought a house on Green Acre Lane in Cartersville; we have a second house under contract (it’s a short sale deal); and we’re working to buy a third property before it’s sold at May’s foreclosure auction (it’s a subject-to deal.)

It’s astonishing how much and how fast the market has changed.  Since 2009, the foreclosure auction was THE place to buy.  Now, because of a huge increase in competition and a dramatic decrease in the number of foreclosure properties, the prices people are paying for foreclosures are increasing, while profit margins are tanking.  Scary stuff! Read More→

Where Did The Cheese Go?

Posted on May 26, 2013 by

Last week’s column – The Cheese Has Moved – was about the dramatic change Kim and I witnessed at April’s foreclosure auction.  We watched investors pay a lot more for properties.  Higher purchase prices ensure thinner profit margins, and thinner profit margins mean greater risk – it reminded us a bit of 2005 and 2006.

Since the fattest deals will no longer be found on the courthouse steps, we’re forced to ask, “Where did the cheese go?”  In other words: Now where will we find the best real estate investing deals?

To answer this question, I’m on a quest to spend April knocking on sellers’ doors.  The goal is to meet face-to-face with 60 sellers.  On the front line is most often the best place to find out where the market is going.  (By the way, I’m posting the daily results from my door knocking on North Georgia REIA’s Facebook page.)

What am I seeing out there?  Real estate is experiencing an incredible shift. Read More→

The Cheese Has Moved!

Posted on May 25, 2013 by

If you haven’t read Who Moved My Cheese? by Spencer Johnson, it’s time to – especially if you’re a real estate investor – because folks, when it comes to buying property at the foreclosure auction, the cheese has definitely M-O-V-E-D!

From December through March, Kim and I took some time down and didn’t work foreclosures.  We got back at it last month and went to April’s foreclosure auction loaded for bear.  There were six properties on our target list.  With this many targets, we were confident of being the high bidder on at least two of them.  Imagine our disappointment when we left the auction without buying anything!

At the auction, Kim and I quickly noticed that things had definitely changed – and changed in a BIG way.  From 2007 through 2012, buying at the foreclosure auction was like shooting fish in a barrel – it was a target-rich environment.  Each month, there were 170 or more properties advertised for foreclosure, but only a couple of able investors on the steps to bid.

This is no longer the case.  This month, there were only 80 properties advertised for foreclosure.  And on the steps, the number of investors bidding on properties has dramatically increased.  In little ol’ Bartow County, we even have hedge-fund buyers and online bidders.  Crazy stuff!

So here’s the question: With a lot fewer properties advertised for sale and many more folks bidding, what do you think is happening to the sale prices of foreclosure properties – they’re climbing, right?  And what do you think is happening to investors’ profit margins – shrinking, aren’t they? Read More→

Mon, June 3rd at 5:00 PM @ Crowne Plaza Ravinia, Atlanta
Atlanta REIA Main Meeting
June 3rd at 5PM at the Crowne Plaza Ravinia
A Panel Discussion on…
“Changing Strategies for a
Changing Real Estate Market”

with Don DeRosa, Russ Hiner, Bill Cook,
Kim Cook and Dorsie Boddiford
Atlanta REIA Members Can Attend at No Charge.
Guests Can RSVP Online Now for $15 or Pay $20 at the Door.

Register Now!
Click a photo above to read more about our panelists

Don DeRosa Russ Hiner Bill Cook Kim Cook Dorsie Boddiford

If you haven’t noticed, the real estate market in the Atlanta Metro Area has been changing dramatically in the last 6 months. It has gone from a buyer’s market to a seller’s market due to the inventory shortage of available homes for sale at auction or on the MLS.

  • Hedge Funds are stepping all over each other purchasing REOs and foreclosures and are running up the prices.
  • Those who frequently buy at the courthouse auctions are now being routinely out bid by kids with cell phones and iPads who are receiving their bidding instructions from people we never see, who are sitting in front of multiple computer screens hundreds or thousands of miles away from the action.
  • With a massive increase in the number of investors bidding on the courthouse steps, along with a significant decrease in the number of properties being cried, real estate values have soared while investors’ profit margins have plummeted.
  • Listed houses are often put under contract for well above the list price within 24 hours of hitting the MLS with multiple backup offers in place.

With all these rapid changes going on, our June Meeting is the perfect time and place to get together and examine alternative investment strategies and marketing strategies to find deals. At the June Meeting, we’ll have a Panel Discussion with Don DeRosa, Russ Hiner, Bill Cook, Kim Cook and Dorsie Boddiford, 5 active real estate investors, about this sudden shift and how we can best capitalize on what’s working now.

Bill Cooks says “It’s obvious the Cheese Has Moved. The question is: Where did the cheese go? The best way to find the answer to this all-important question is to go to the frontlines. Our efforts have shown us where the cheese is TODAY – and which deal structures are working best NOW! Do you want to be the first investor in your area to learn this secret? Join us at June’s meeting!”

So come out and join us at the Atlanta REIA Meeting on Monday, June 3rd at 5PM at the Crown Plaza Ravinia Hotel in Atlanta to learn more about the changing real estate market and how to change your investing strategies and tactics to adapt to these rapidly changing times. We hope to see you there!

Mon, June 3rd at 3:00 PM @Total Wine & More Perimeter
Meeting Before the Meeting
Atlanta Real Estate Market Update
with Deborah Harris & Gordon Catts

Deborah HarrisPlease join us for the “Meeting-Before-The-Meeting” on Monday, June 3rd at 3:00 PM at Total Wine & More located at 124 Perimeter Center W (see map), where your host, Gordon Catts, will be joined by long time real estate agent, Deborah Harris, for an Atlanta Real Estate Market Update on the latest changes going on in the metro area. Join us and bring your own questions, concerns, insights and comments. At 5:00 PM, Total Wine & More will be offering a complimentary wine tasting to all those who attend our meeting and wish to participate. There is NO CHARGE to attend this meeting or the wine tasting for Atlanta REIA Members and guests. Thanks Total Wines!

Mon, June 3rd at 9:30 PM @ Tilted Kilt Perimeter
Late Nite Networking at Tilted Kilt

Tilted KiltAfter the conclusion of the Main Meeting, we will be reconvening at the Tilted Kilt Perimeter located at 1155-B Mount Vernon Highway in Atlanta for the “Meeting-After-The-Meeting”. The Tilted Kilt will be offering half price appetizers as well as food and drink specials for our members and guests. Come eat, drink, network and have fun with us as hang out late into the night! Thanks Tilted Kilt Perimeter!

*Meeting Agenda
3:00 pm: Meeting-Before-the-Meeting
5:00 pm: Vendor Vendor Trade Show & Networking Begins
6:00 pm: Have & Wants, There’s an App for That & Announcements
7:10 pm: Networking Break
7:25 pm: Giveaways & Door Prizes
7:30 pm: Panel Discussion on the Changing Real Estate Market
9:30 pm: Late Nite Networking at the Tilted Kilt Perimeter!

*Please Note: Meeting agenda is subject to change.

Participating Vendors & Sponsors

Each and every month, for the duration of our meeting, we have a Vendor Trade Show in which you can come out and meet many of our participating business members who help sponsor our meeting. Vendors can Reserve a Table Here. Thanks again sponsors!

The Small Business AdvisorThe Small Business Advisor – A full service small business consulting firm specializing in QuickBooks with a wide variety of specialized services, trainings and products for small businesses. Read More>>

Halperin Lyman, LLCHalperin Lyman, LLC – A transactional real property law firm devoted to providing the full spectrum of non-litigation related real estate legal and consulting services to its clientele.
Read More>>

Lima One Capital, LLCLima One Capital, LLC – A fully capitalized, direct lender for residential real estate investors and homebuilders. We are fully capitalized and our team prides itself on closing loans quickly for our clients. Read More>>

Craftbuilt, Inc.Craftbuilt, Inc. – We are a Metro Atlanta design-build construction firm specializing in whole-structure renovations, restorations, and new construction. No matter what the situation, we are up to the challenge! Read More>>

Advanta IRA AdministrationAdvanta IRA Administration – With the help of your local Advanta IRA staff, use your IRA to invest in assets you know, understand and control, such as real estate, notes & mortgages, private placements, and much more! Read More>>

Real Estate Works 4 UReal Estate Works 4 U – Stop paying too much and get your property tax bill lowered! Our team will manage the entire property tax appeal process from start to finish. Read More>>

Solutions Realty NetworkSolutions Realty Network – Providing expert property management and investment services since 2003. You invest and we take care of the rest! We’re the solution to all your real estate needs. Read More>>

Networth Realty of Atlanta, LLCNetworth Realty of Atlanta, LLC – A licensed, full-service residential wholesale brokerage that specializes in finding quality wholesale properties and making them available to you. Read More>>

Angel Oak FundingAngel Oak Funding – A direct hard money lender headquartered in Atlanta. We provide renovation/construction loans for investors and or builders to purchase and renovate residential properties. Read More>>

Goldmine Properties, Inc.Goldmine Properties, Inc. – As Atlanta’s first full service real estate wholesaler, we offer wholesale property at 65% loan to value, with financing available. Purchase price and repairs are 65% of certified after repaired appraisal. Read More>>

Atlanta Capital FundingAtlanta Capital Funding – A privately funded hard money residential and commercial lender specializing in unconventional financing where speed and attention to special circumstances are critical. Read More>>

Atlanta Carpet ServicesAtlanta Carpet Services, Inc. – Providing carpet, wood, vinyl, and tile, ACS is dedicated to every aspect of your floor covering needs from initial consultation to the sale and follow-up services. Read More>>

Fuller Center for Housing of Greater AtlantaFuller Center for Housing of Greater Atlanta – A faith-driven, Christ-centered, non-profit organization dedicated to providing adequate shelter for people in need in the Greater Atlanta area. Read More>>

CRS DataCRS Data – Comps from MLS and FSBO’s. Our PowerTools are made of custom searches, property tax records, interactive maps, sales and mortgage info, real estate valuations, mailing lists and more.

Simply Amazing Staging AtlantaSimply Amazing Staging Atlanta – We have a proven record of converting those “For Sale” signs into “Sold” signs. We use 5 proven and time tested steps to sell your home in record time.

  • Bowen’s Specialized Services
  • Sign Mafia
  • Georgia Home Deals
  • Mary Bryant & Associates Insurance
  • Sparkle Property Cleaning LLC
See Atlanta REIA Events Calendar for More Events!

Get Theory or Just Do It

Posted on May 24, 2013 by

Recently, I spoke with a real estate investor who’s having a tough time moving up to the next level of investing.  She’s very smart – she has a college degree and is working on her masters.  She isn’t the least bit afraid of hard work.  She and her husband have already done a couple of deals.

Here’s the thing: She feels she needs to know everything about real estate investing before doing her next deal.  I think this has a lot to do with her level of education.  For years, she’s been taught that to succeed, you must first go to school and learn lots of stuff before stepping out into the real world. 

This just isn’t so.  I’m not anti-education – far from it!  Each year, Kim and I invest 5% of our net income into our education.  At the same time, we’ve never let a lack of education keep us from meeting with sellers.  Never forget, meeting face-to-face with sellers and asking Pete Fortunato’s famous question, “Why are you selling such a nice house like this?” is the Alpha and Omega of real estate investing.  Never find a reason to NOT meet with sellers – even if you don’t know what you’re doing! Read More→

Handling Seller Calls Like a PRO
at the Atlanta REIA West Meeting on May 29th

Leslie MathisWhat if there was a way to stop endlessly looking at houses that you don’t even have a chance of buying because you and your sellers don’t see eye to eye?  Would that cut down on wasted time and increase your productivity?  Of course it would!  Come join us Wednesday* May 29th at the Wild Wild West Meeting as we covers the art of handling seller calls!

  • What to say when you get your sellers on the phone
  • Getting sellers to their bottom line quickly
  • How to position yourself for contract signing when you go out to see the property

We’ll do live seller calls—so put on your boots and cowboys hat, and bring your leads to the meeting!

Led by Cowgirl Leslie Mathis, the WILD WILD WEST Subgroup meets on Wednesday* May 29 at 6:30pm at the Cherokee Cattle Company in Marietta, just off I-75.   Leslie can reached at 678-895-1460 or Leslie MathisMentor@gmail.com

Admission is FREE for all AtlantaREIA Members, Guests are just $5 cash

 DOOR PRIZES-GIVEAWAYS-Y’All Come!

*PLEASE NOTE: The Meeting day changed for this month only due to the Memorial Day holiday. We will be back on our regular schedule in June.

We’ve all heard that too much of a good thing can be bad.  Let’s look at two examples and see if this theory holds water: rental property and chicken poop.

I have a long-time friend who owns more than 100 single-family rental houses.  Most people look at this guy with awe.  Sadly, I’m forced to look at him with pure pity.

We talked this morning.  I invited him to join me, and five of our investor friends, on a 5-day trip to California in April.  The purpose of the trip is to get together and discuss creative deal structuring and financing. I’m pretty sure lots of golfing and boating will be thrown in for good measure.

He really wanted to go but was forced to weakly admit, “I can’t be away from my rentals for that long.  Something is bound to go wrong, and when it does, I need to be here to fix any problems.”

He and I got into real estate investing around the same time.  We had similar goals: to own enough rental properties to produce enough mailbox money so we no longer would have to labor for a living.  This would allow us to travel, spend more quality time with family and friends, plus give us the means to help others. 

Today, we’ve both reached our goal…sort of.  The problem is, my buddy doesn’t know his number.  When asked how many rental properties he wants to own, he answers, “More.”  More?  Why more?  When is enough, enough?  When does enough become too much? Read More→

Attending Gary Johnston’s Financial Freedom Principals seminar last year (GaryJohnston.com) caused us to make a radical change in what we teach.

Since 1997, Kim and I have taught people how to successfully invest in real estate.  Gary’s seminar was the springboard that shifted our teaching from just real estate investing, to how to gain financial freedom.  It just so happens that real estate – for reasons like high yields, solid cash flows, huge tax advantages, etc. – is our primary investment vehicle of choice.    

What is financial freedom?  It’s when the net income from your INVESTMENT assets is greater than your expenses.  Think of it this way: On March 1, you have $30,000 in the bank.  Because of an illness, you don’t work all month and don’t get a paycheck.  You are the sole breadwinner.  After paying all of your March bills – expenses never stop – how much money do you have in the bank at the end of March? 

If your answer was less than $30,000, then you’re thinking like a wage slave.  If your answer is more than $30,000, then congratulations – you understand the concept of financial freedom!  Your investment income covered your expenses…and then some!

Here’s the thing: Your goal should be to create a gap between what you earn and what you spend, and then invest this difference in an appreciating capital asset that produces cash flow – you know, mailbox money! Read More→