Atlanta Real Estate Investors Alliance Blog

Never compare yourself with others. You never know what is going on behind the face. We will look at a person who has a job and likes what they do. They don’t plan on leaving their job and living off their investments. They will be able to buy through a realtor and pay a premium. I love to have these individuals in my wholesale stable.

The house is three bedroom/ two bath in a lower moderate income area (such as Mableton, Lakewood, Decatur, Norcross.) The price is $80,000, top of the market, with no equity. The buyer will pay 25% as a down payment. The interest rate is 5%. The principal balance is $60,000. The P& I payment will be approximately $322.09. Taxes will be $1000. Insurance will be $500. The payment for T&I is $125.00. The total payment is $447.09/ month. If the house rents for $825, the cash flow is $377.91 per month. This is great!!! Let’s look at the other side. It looks like 22.6% cash on cash return. (YES!) Read More→

 It was 3:30 PM on a Friday afternoon in 1984. I was thinking about the weekend, and my primary goal was to move a new tenant into one of my rental units. The phone rang, and I proceeded to talk to a desperate seller. I went through my property information sheet, and the deal sounded too good to be true. I was excited. Here was an opportunity to purchase a three bedroom, one bath house in Decatur for $15,000. The property was a 1960’s brick ranch in average condition. All three of the mechanical systems were in place, and the roof was 10 years old.  The rent on the property was $700.

The total amount of money in the transaction would have been $25,000, all in price. The return on investment cash on cash would have been 33.6%. It would’ve taken three weeks get the property market ready. The retail price of the home would be $65,000, and it would sell in three months with a net profit of $33,500. Read More→

Driving for dollars. Is this a game show, with the host saying: “Good evening, ladies and gentlemen. In tonight’s edition, we have…” Seriously, you can make a lot of money at this “game”—my favorite source of finding good deals in real estate.

Pick a neighborhood that interests you, e.g., in transition, being fixed up, near a river, and so on. Drive around it slowly and write down at least 20 addresses of neglected, vacant, or condemned homes. Often, they’re sporting signs saying For Sale, For Sale by Owner, or For Rent.

Next, contact the owners. You may have to be persistent and call and call to find their numbers and reach them. You can contact the Registrar of Deeds, get on the Internet, and go to the local tax records office. Ask a realtor to look them up on the MLS computer. Once you find them, call or write them to learn more.

Houses with Motivated Sellers: How do you tell if a house or property might be owned by a motivated seller? Look for the following characteristics: Read More→

One of the hot topics in real estate investing these days is something called creative deal structuring.  This leads to a question that we’re often asked: What exactly is creative deal structuring?    

To answer this question, we need to begin by describing what it’s not.  One way you can buy a property is to pay cash for it.  You won’t find any creativity in that deal structure.  You can also find a property you like, apply for a mortgage, and then a month or so later, go to an attorney’s office to sign a big stack of hard-to-understand documents.  Not much creativity there either.

Creative deal structuring begins when you find someone with a real estate problem that “normal” solutions can’t resolve.  For example: A homeowner owns a nice home that in 2006 was worth $130,000 but today is only worth $70,000.  She owes $80,000 on her mortgage – making her upside down by $10,000.  Now throw some motivation into the mix – the lady needs to sell immediately so she can move to Tennessee and begin her new life.

Let’s see, a cash buyer wouldn’t be interested in this deal.  And you’d be hard-pressed to find a realtor who would list this house – unless it’s a short sale listing.  So how would you structure this hopeless situation? Read More→