Atlanta Real Estate Investors Alliance Blog

The April 2013 edition of The Profit Newsletter is now ready for download as a High Quality PDF or Low Res PDF format. The Profit is the official newsletter of Atlanta REIA ( the Atlanta Real Estate Investors Alliance) and is a digitally delivered, interactive newsletter for new and seasoned real estate investors delivered as an Adobe PDF file to read on your PC, Mac, Smart Phone, iPad or other mobile ready devices with a PDF reader. Many of the articles and ads in The Profit contain many hyperlinks you can click or tap to visit websites, watch videos, listen to audios, download content, send emails, comment on articles, share socially and much more! And yes, The Profit is “print ready” for those who still like a paper newsletter. Be sure to Subscribe to The Profit Here so you don’t miss a single monthly issue.

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What is the first thing you need to do for your first or next successful real estate deal? You need leads of course. How many leads do you need to do one single deal? If you are a new investor or even a seasoned one, you may need to go through as many as 10 leads to get one solid, profitable deal.

So how many leads are you generating each month? Are you generating 5, 10, 15, 20, 30, 40 or 50 leads per month? If you are not generating at least 50 leads per month, you are not alone. Most investors don’t generate anywhere near 50 leads per month. In fact, it has been said that only the top 5% of all real estate investors generate and capture 80% of all the leads floating around out there. So what do these top investors know that the average investor doesn’t know?

 The answer is simple… the top 5% of all investors know how to generate all the leads they can handle and more. Perhaps you know some of the top lead generating real estate investors in your area. Chances are you see their marketing efforts every time you turn around.

One such investing company that you should all be familiar with is HomeVestors^®, the nice folks with the “We Buy Ugly Houses^®” signs all over town. HomeVestors^® used to be a huge 800 Pound Gorilla before the housing market crash, but as of mid-2012, they are back in force and are quickly regaining their marketing dominance once more.  Read More→

(A Confidential Conversation between a Private Lender and a Real Estate Investor)

When I started out investing in Real Estate, I did it ALL THE WRONG WAY! Like so many other Real Estate Investors, I was taken to the slaughter house. I went to my local banker and was able to do a few deals…but you know what happened: I had to come up with Big Down Payments, pay origination fees, and most importantly…play by their rules. (Including signing personal guarantees on everything I owned.) I hated it. I felt owned by the bank, out of control, and stressed out.

So, I got some education and learned about buying properties “Subject-To,” Using Options, and buying with “Lease/Options.” These tools opened up my opportunities, but then The Hammer Came Down!!! When the market turned south big-time…my banker CUT ME OFF!!! With No Warning!!! I knew I had to find another way. I searched high and low for another system that would give me the funds I needed. Then I realized I needed to combine the best aspects of all that I researched. And that’s when I created a unique, private lending system. I kept refining it until I thought I had the best formula. Then I put it all together and made contact with my first prospect. I trusted my system and the very first person I approached gave me $250,000 in Private Money…and what blew me away was How Easy It Was!!!

Within a few, short months…I had $2,150,000 in Private Money!!! And that was just a couple of years ago…and it has ROCKED MY REAL ESTATE INVESTING CAREER! (My banker actually did me a HUGE FAVOR…I just didn’t know it at the time because that set-back forced me to create the system that would bring me lots of money Fast and Easy without relying on bankers or my credit.) The Massive Profits (7 Figures Per Year) I’ve been blessed to enjoy by creating and putting into action my “Where To Get The Money Now” System has without a doubt been my Biggest Quantum Leap since becoming a Real Estate Investor. And I live in a city with only 40,000 people.

How would you like to “listen in” on a confidential conversation between me and my very first private lender?  The following is my conversation with an elderly gentleman whom I’ve known for years at church.

After the closing prayer at bible study and as the church folks were visiting and mingling in the church building, I walked up to Brother Paul Jenkins and said, “Brother Paul, I’d like to talk with you about something confidentially.” He said, “Well Brother Jay, let’s go over here to the nursery where we can talk privately.” We walked over to the nursery and closed the door.

He said, “Brother Jay, what have you got on your mind.” I said, “Brother Paul, the reason I wanted to speak with you confidentially is because what I’m about to tell you is not for public knowledge. I have now decided to allow folks I know and trust to invest in my Real Estate business. Now, I’m not taking on partners and I can’t accept everybody because there’s certain criteria they have to meet. What I am doing is allowing folks to loan their money to my business while having it safely secured by Real Estate. Now Brother Paul, I know you know a lot of people and you’re in the Rotary Club and see about 200 folks every Tuesday at lunch…when you run across somebody that would like to earn high rates of return safely and securely, would you refer them to me?”

As his eyebrows began to raise Brother Paul asked, “Well Brother Jay, now what did you have in mind when you said a high rate of return?” I paused and then asked, “Well Brother Paul, are YOU interested?” He responded, “I’ll tell you, me and Miss Pauline have quite a bit of money in CD’s that are getting ready to mature.” I then asked, “Well, how much are those CD’s earning you right now?”  He shook his head and said, “Only 2 %.” I said, “Brother Paul, that’s a crying shame. Let me ask you a question: What kind of a rate sounds high to you?” He thought for a few seconds and said, “Well Brother Jay, I guess something like 7 %.” I thought for a few seconds and responded, “ Brother Paul, if I agreed to pay you that kind of a rate, there’s something I’d have to ask you and trust you to do.” He then asked me, “What is that Brother Jay?” I said, “I would have to trust you not to tell anybody that I’m paying you that kind of a rate.  ‘Cause if the word got out that I was paying that much, I wouldn’t be able to handle it.” He said, “Brother Jay, Mums the word. You can count on me not to let the cat out of the bag. This would be strictly between us.” 

I put my head down and paused for a few seconds and then said, “Brother Paul, I think I could work with you at the 7% rate.”  He held up his index finger, looked me in the eye and said, “Brother Jay, Put Me Down for $250,000.” I said, “Brother Paul, I’ll put you down.”

Within a few days I stopped by Brother Paul’s home for a cup of coffee and a little visit with him and Miss Pauline. They wanted to know how I was coming along with finding a house so they could start earning that 7% return. I was glad to report that I had found a property that fit our criteria and we would probably be closing next week. As we were sitting at their kitchen table and drinking coffee (Miss Pauline makes the best coffee there ever was!) Brother Paul leaned forward and said, “Now Brother Jay, we’ve got another $125,000 CD coming due next month. Is there anyway you could earmark that $125,000 to invest in another house so we could start earning 7% on that money?” I said, “Brother Paul, no problem. There are plenty of properties for me to choose from. I’ll put you down for another $125,000.  In fact, I’ll start looking right now so we won’t waste any time getting you a high rate of return on that $125,000.”

I thanked Miss Pauline for the wonderful coffee. Brother Paul then invited me out to his workshop to show me his latest antique collection. We had a wonderful visit and I was on my way to look for the next property.

You see, Getting Private Money is as easy as asking simple questions and following an easy and proven system. There’s gobs of money all around you. All you’ve got to do is tell your story and ASK. And who knows? You might get a great cup of coffee, a relaxing visit with friends, and an antique tour as a bonus!

(Note: Brother Paul Jenkins and his wife Miss Pauline are not their real names as to protect their privacy, but the story and conversation is real.)

I’m so excited to be coming to speak at the Atlanta REIA on April 1^st and April 27^th. On Monday, April 1^st, I’ll be revealing how I run my 7-Figure Income Business on Automatic in Less Than 10 Hours Per Week. Then, on Saturday, April 27^th, I’ll be teaching step-by-step How I Raised $2,150,000 in Private Money in Less Than 90 Days. Make plans to attend both sessions! I promise, you’ll leave with more than one million dollar idea!!! Look forward to seeing you in April!!!

Jay Conner

The Private Money Authority

Last month I began this two-part article on the options and procedures that lenders may take when a borrower defaults on their real estate loan.  Understanding this process is important to real estate professionals whether they are lenders, borrowers, agents or investors attempting to buy or manage property during the default process. 

When a borrower defaults on his loan, most often by failing to make the monthly payments, the lender has several options.  Although not exhaustive nor mutually exclusive, these options include foreclosure, filing suit, self-help repossession or requesting that the court appoint a receiver to manage the property. 

The two most popular options differ in their order: lenders can foreclose first or file a lawsuit first.  Therefore, the lender gets to choose its starting point: (1) foreclose first and then sue, or (2) sue first and then foreclose.  The order is important and it is significant to remember that the second step in either option is at the lender’s discretion.  Last month I addressed the first and most popular option for residential loans.  In this article, I will discuss the second option. Read More→

THE WHY

Why are you investing in real estate? Do you have a plan?

Every business that seeks to grow and achieve success has a detailed business plan. Any real estate entrepreneur that expects cash flow and asset growth in any reasonable time period should have a detailed plan as well.

The first question is where do you want to be in 5 or 10 years? Just saying you want to be rich is not an acceptable answer. “Rich” is a nebulous word and one we will remove from our vocabulary for this discussion.

We will replace it with two concepts that we can define, Cash Flow and Asset Building. Cash flow generates current dollars available to spend now. While cash flow is required to put food on the table and a roof over your head, it is also taxed in the year you receive it. Even with the new tax laws, it can be taxed up to 60% between federal, state and self-employment taxes. Once you think about it, it makes no sense to earn any more than you need to live comfortably, not spartanly or exorbitantly. Read More→

Recently, an investor asked us to explain the difference between “yield” and “return.”  When Kim and I first became real estate investors, we asked this exact same question.

Yield and return are different ends of the same stick. 

A yield looks forward – it’s looking into the future.  It hasn’t happened yet.  It’s what you project your investment dollars to earn each year for the life of the investment.

A return looks backward – it’s looking at what your investment actually did.  There’s no guesswork about what you made because everything has already happened.

To better understand yield, let’s look at an example: You buy a 12-year-old, two-bedroom, two-bath mobile home in a park.  Your all-in purchase cost is $2,750.  You sell this home for $8,500 with the following sale terms: $500 down, with monthly payments of $275, at 18.63% interest, for 39 months. Read More→

Master lease options are a great way to get started in the real estate business but are often misunderstood. A master lease option is two separate contracts, the master lease and the option to purchase. Together they make up the master lease option (MLO).

A master lease gives you the right to “rent” an entire property. This could be anything from a single family residence to a large apartment complex or strip mall. Once you have a master lease in place you control the property. This includes the management and the operations. You can essentially become the landlord yourself or hire management at your discretion. 

The option to purchase sets the purchase price for a certain amount of time and for a certain price. You will negotiate this price and time frame during your offer and negotiation process. Usually an option fee is placed at the time of the signing. The option money is used as a non-refundable deposit to the seller in order for you to control the sale of the property. If you do not close the sale in the time frame set in the purchase option, then you will lose the option money. If you do close the sale then the option money is applied to the purchase price. Read More→

In last month’s article I explained how the housing boom of the early 2000s created an equally big boom in mortgage fraud.  While the housing collapse changed the nature of the crime, the ensuing flood of foreclosures just gave the banks another reason to commit fraud.

Fortunately for homeowners, there has been a wave of investigative agencies that are exposing exactly what the banks have been up to.  While my last article covered the types of fraud that the banks have committed, this article will focus on the methods that investigators use to find the fraud in real estate deals.

Due to the fact that the fraud examinations are normally conducted with the purpose of being used in litigation, they tend to fall under the mantle of forensic accounting.  In other words, they are conducted with the assumption that the case they are investigating may end up in litigation or a criminal trial.  This means that fraud investigators must possess the skills to follow through with a mortgage fraud investigation from beginning to end.  This includes but is not limited to researching, collecting evidence, taking statements from people involved, and testifying to their findings in court or a deposition. Read More→

“Treat your password like your toothbrush. Don’t let anybody else use it, and get a new one every six months.” ~ Clifford Stoll

Tonight you’re closing on a lucrative short sale. Afterwards, you’ve got a special dinner planned. And it’s good to know your seller will sleep better than she has in months. Yes, it’s going to be a great night. All you need to do now is print out the paperwork.

So you turn on your laptop and … nothing.  Nothing. Just the dreaded blue screen of death!

Viruses happen. Spilled coffee happens. Accidentally dropping your iPhone in the swimming pool because you insisted you could carry four margaritas while you dance the hula with your cute cousin Betsy, well, that happens too.

If you’re like me, your whole life is in your iPad. Heaven forbid all that information should suddenly disappear! You can install anti-virus programs, you can be careful what you download, but here’s the bottom line: It’s not a matter of if your system will crash. It’s just a matter of when. It’s true for notepads and smartphones as well as laptops and PCs. So no matter what else you do, you’ll need to make sure all that wonderful information lives somewhere safer than your laptop. Read More→

“Listen to advice and accept correction, and in the end you will be wise. People can make all kinds of plans, but only the Lord’s plan will happen.” (Proverbs 19:20-21)(NCV)

Many smart business men and women pride themselves in knowing the trends, critical success factors, competitive strategies and other business indicators that could affect the success of their business. It would be totally unwise for an entrepreneur to develop a comprehensive business plan without the consultation of an attorney, accountant and other business professionals. The reason for these abundant resources is obvious. In order to succeed it is necessary to have sufficient expert and credible counsel. That being said, I find it so amazing how many extremely brilliant business professionals fail to see the relevance or the need to get counsel or instruction from the one expert that has a flawless track record for the successful oversight and management of the entire universe; God, the creator of the universe!

Most business professional are highly proficient in their trade. They have acquired specialized skill-sets, training and experience that allow them to comfortably make informed day-to-day decisions. They take advantage of a plethora of seminars and high level training to assure they remain abreast of cutting edge technologies, best practices, and current trends in their specific industry. Business men and women make commitments to pursue continual personal development activities that include empowering seminars, formal learning, the latest industry training, speaker guilds, and a host of other events designed to improve themselves, their employees, and their company. Read More→

How to Find Investors – It’s Fairly Simple!

When you’re looking for private money, it is not an art. It’s a fairly simple process.

How to Find Investors – Benefits

The benefits really depend upon the negotiation with you and the lender. Here are a few of the many possible benefits:

• You’re dealing with an individual who can make the decision right then and there, or as close to right then and there as you can.
• You generally pay points for loan origination fees to traditional lenders, with private lenders, whether points are paid or not is a matter of negotiation.
• Traditional lenders require payments on loans; with an IRA it may be possible to arrange a no payment loan.
  • If you need a one-year or two-year loan to do a rehab and the investor says “I don’t need the cash flow because it’s in my IRA, I’d rather have the extra one or two percent.” That’s great; you’d rather not make any payments until the house sells.
• You set the terms with the private lender, not the bank.
• Many times, there’s no personal credit required; however, not always.
• There are often no personal guarantees; this varies by lender and negotiation.
• In some cases, you can get dollars upfront for funding expenses.
  • That’s not always the case. Many private lenders will say “no money upfront”; still others will say “100% as long as the Loan to Value is 65% or less.”
• Some lenders will require some sort of equity, “skin in the game”, to make a loan. That’s one of the nice things about dealing with private lenders; the terms are completely negotiable between you and the lender.

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