Archive for Articles
No Seller Wants Cash – EVER!
Posted on August 1, 2015 byJust got a call from a realtor. She represents a homeowner who needs a quick sale. The realtor said, “Bill, my client will only consider an all-cash offer. We’re not interested in any of your creative razzle-dazzle deal structures, understand?”
Kim and I get a lot of calls like this. I’ve learned not to say, “No seller wants cash – EVER – ya dingbat!” Saying such would ruin the relationship and destroy the possibility of meeting face-to-face with the seller.
So what do you think? Do sellers really want cash or could I possibly be right?
In this situation, what if I immediately agreed to pay the seller’s $80,000 asking price – in cash? There’s only one condition: The seller must put the $80,000 on her kitchen table, cover it with plastic wrap, and agree that once a month the seller, realtor and I will get together and marvel at the big stack of money.
Sure, this is a silly stipulation that no seller would agree to. But why – since the seller is getting exactly what she wants – wouldn’t she agree to it? Think hard on this. It’s an important question to contemplate! Read More→
Three “Golden Rules” of the Real Estate IRA
Posted on August 1, 2015 byMany of us are aware of the potential for real estate to function within our portfolio. Not only do we believe in real estate as an investment, but we know that over time, it tends to go up in value – there is, after all, only so much land to go around! But what happens when you incorporate real estate into your retirement portfolio? Do the rules change when you’re running a Real Estate IRA?
Truthfully, many of the same principles of real estate hold true when you’re investing in real estate from within a Real Estate IRA. But that doesn’t mean there aren’t some other things to be aware of – this is, after all, a different type of investment account.
Even so, you’ll find that investing in real estate through a Real Estate IRA isn’t only intuitive, but can be just as intuitive as investing in real estate from a “general investment” perspective. We’ve put together three “Golden Rules” here to not only demonstrate some of the similarities but some of the differences in investing in real estate for short-term growth and investing in real estate for retirement: Read More→
Rescission Has the Banks Running Scared!
Posted on August 1, 2015 byLast month I wrote about how you could use the right of rescission as a silver bullet to stop a foreclosure in its tracks. Once you drop a notice of rescission in the mail, your loan has been nullified as a matter of law and the bank must either comply with the rescission or prove within 20 days that they have the right to enforce the note. Well, over the last few weeks I have been seeing more and more from the banks that the right of rescission has them on their heels. The banks are sending their lawyers around their offices explaining exactly how rescission leaves them vulnerable.
The main point that the lawyers are making to the banks is that mailing in a notice of rescission is all it takes to cancel a borrower’s loan, note, and mortgage. The notice is effective from the moment it is dropped in the mail as an act of law. This was written specifically into the Truth in Lending Act (TILA) so that homeowners wouldn’t have to use an attorney to act on their behalf, thus restricting the remedies provided by TILA to borrowers who can afford an attorney. While the note is canceled immediately as soon as the notice is dropped in the mail, the bank has 20 days from the date of receipt to respond. This is a good reason to send the notice with return receipt requested. This provides you with proof of the exact date the notice of rescission was received. Read More→
Do’s and Don’ts of Wholesaling a Wholesale
Posted on August 1, 2015 byWholesalers send me deals daily but I have started to notice that many of these wholesalers are wholesaling another wholesaler’s property. Before proceeding, I want to be clear that I have no issue with this but there is a right way and a wrong way to go about it. Also, understand that if a buyer/investor receives the same property from multiple sellers he/she will contact the seller with the best price. Wouldn’t you? Keep in mind that you did nothing to acquire this property. You merely sent it out to a buyers list you put together, which with today’s technology takes only a few minutes. So what should you avoid and what should you do when wholesaling a wholesale?
Let’s list a few of the major DON’TS:
- Don’t wholesale another wholesaler’s property without permission. It is best to ask and establish a long working relationship with that wholesaler/seller. Just imagine if you end up having a buyer for the property but the wholesaler/seller has sold it or maybe he/she is not interested in working with you. It is best to get all this out of the way first.
- Don’t add on a ridiculous fee to the price if it is not justified. The last thing you want to do is be known as the wholesaler who markets deals with very little to no potential profit. What’s worse is if the property is being shopped by multiple wholesalers in the market area and your price is the highest.
- Don’t waste time marketing another wholesaler’s “deal” until you have seen a contract. Many times a wholesaler will claim to have a deal under contract but in reality he/she is still just waiting for it to be executed. Pre-marking is fine but don’t spend too much time on it until you see a contract.
- Don’t contact the original seller of the property. If you run across the seller at the property and want to know more about the condition of the property or the neighborhood that is fine. However, do not discuss price, closing dates, mention wholesaling, etc. These are items you discuss with the wholesaler/seller you are working with. The last thing you want to do is jeopardize another person’s contract or be accused of trying to go around the other wholesaler to contract the property yourself.
The Profit Newsletter July 2015 Edition
Posted on July 2, 2015 by
The July 2015 Edition of The Profit Newsletter is available for download just in time for our Atlanta REIA Main Meeting on July 6th. There are 48 pages of valuable information this month for your real estate investing success. Download it and check it out! The Profit is Atlanta REIA’s digital, interactive newsletter for serious real estate investors delivered as an Adobe PDF file to read on your PC, Mac, Smart Phone, iPad or other mobile ready devices. Many of the articles and ads in The Profit contain many hyperlinks you can click to get more information online! The high res version of The Profit is “print ready” for those who want to print the newsletter on their home or business printer. Be sure to Subscribe to The Profit by Email or Subscribe to The Profit by Text so you don’t miss a single issue.
Too Many Loyalty Cards?
Posted on July 2, 2015 by“I always say shopping is cheaper than a psychiatrist.” ~Tammy Faye Bakker
The other day I was in the grocery store picking up some milk. In the checkout line, the checker asked the guy ahead of me if he had one of those loyalty cards. Well, this guy took out a shoebox full of those cards – a shoebox! –and started searching through them. It took forever!
Okay, maybe I made that up. Actually, if anyone needs a shoebox for those cards, it’s probably me. And if I were to pull out that shoebox in the checkout line, I’ll bet no jury would convict the checkout lady if she shot me right then and there.
Now, just in case there’s anyone who still doesn’t know about loyalty cards, it’s time you did. They’re promotional wallet cards that big retailers and businesses give out, usually for free. When the checker scans the barcode on the back (or when you give the checker the phone number they have on file for you), you can get all kinds of deals that are only available for people who sign up. Read More→
How To Use Signage to Locate Even More Deals
Posted on July 2, 2015 bySignage is an important tool for you to use in your real estate investing business. Using signage is another inexpensive way to draw motivated sellers and deals to you. Many real estate investors find that signage can produce more deals in a year than some of the other methods they use in their businesses. Once again, you need to test and track the results in your own business. There are several different types of signage you can use. Some are permanent, some are temporary. Some are very inexpensive and some will cost more. I will discuss several different types of signage I have used in my own business.
One type of signage you can use is magnetic signs or vinyl lettering that goes on your vehicle. You can also “wrap” a vehicle with signage. Wrapping a vehicle means signage all the way around it. There are sign companies who will design this type of signage for you. This is a little more expensive and a little more permanent; however, it can be easily removed should you decide to sell your vehicle. Magnetic signs work very well, especially if you only own one vehicle. Sometimes you will be working with a seller who doesn’t want their neighbors to know they are selling their house and you will need to remove your signage before going to see that seller. Make sure your message is short and to the point since other drivers have only seconds to see your message unless your vehicle is parked. Read More→
Market is Hot? Don’t Let It Mess With Your Numbers.
Posted on July 2, 2015 byYou may have noticed that the Atlanta market in general is hot right now. Prices are going up. The newspaper is telling people values are going up. CNN, Fox and more are reporting more new developments every week it seems. If you are a homeowner, this is the news you have been wanting to hear. ‘Sellers’ market!’ is being proclaimed by agents in recent months and to a reasonable degree, that is the case.
So where does this leave you as a wholesaler? I would argue it leaves us in one of a few positions:
- Ride the wave and pay more for properties and hopefully wholesale for higher LTV’s
- Learn more about creative financing
- If you want to wholesale, stick to your formulas that you know work based on today’s values
Which is the right answer? As a wholesaler, clearly number 3 and to some degree number 2 if you want to branch out from just wholesaling. Yet answer number 1 is the answer that seems to be taken by the majority of wholesale deals that cross my desk. Read More→
Why You Should Be Using Mobile Apps with QuickBooks
Posted on July 2, 2015 byIntuit discontinued its own QuickBooks mobile app a while back, but there’s still plenty of processing power available for your smartphone or tablet.
In days gone by, running a company was a 40 hour per week proposition. You might have taken work home some evenings or gone into the office on weekends.
Those days are over, thanks to the internet and mobile technology. This fundamental change in the way we do business means that it’s now hard to get away from work. Your smartphone and tablet are usually within easy reach, and they’re always tempting you to check in.
On the flip side, that kind of 24/7/365 accessibility has numerous benefits. There are, for example, apps that can be integrated with your desktop QuickBooks company file, which enable you to: Read More→
Get More Private $$$
Posted on July 2, 2015 byUnless you are already rich and have all the cash you need to build your real estate empire, you will probably need to explore the world of private money. Private money can come in many different forms such as investor’s capital, private loans, and hard money loans. Most real estate entrepreneurs start with capital from friends and family. This may be the best place for you to start raising money for your deals. Depending on the relationships you have with your friends and family will determine if this a good place to start or not. They may be willing to join you in your deal or they may still see you as the person they remember growing up and not the new real estate mogul you are now. Regardless of their opinion the best way to start raising money from your immediate contacts is to focus heavily on your real estate education. Friends and family will know you are new to the business and may be hesitant to jump in. If they see the amount of education and work you are putting into your new business then that attitude may change.
When you are ready to start farming cash from new sources then you need to start by networking. Networking is one of the best business skills you can learn. In the beginning most people are nervous about networking. I have found that this is usually because the person is not comfortable enough discussing the subject of real estate. Again you need to be constantly working on your education. This will lead you to be able to network confidently, discuss and answer questions, and to start building trusting relationships with new investors. If you are not comfortable and confident in your ability to discuss real estate investing they will not likely be confident in you. Read More→
Are You Planning Poorly or Positively Profiting on Your Deals?
Posted on July 2, 2015 byCalculating costs to purchase, fix and resell a house has always been a downfall for many Investors. At a recent Real Estate Investor Meeting, I heard a great explanation of how people come up with their numbers. You all need to be sure you don’t fudge your numbers and fool yourself into thinking you are going to make a profit. This Article focuses on all the things you must consider when purchasing a property, such as holding costs, cost of the money, and closing costs that you will incur on properties.
When a student contacts me on a property and says “This is a great deal,” I always ask “Why do you think so?” Their response is “because.” Well….”because” is not a good enough answer. This is how I analyze a deal. First, I look for the Sold comps in the same subdivision that have sold in the past 90 days. I will then look at a total of 6 months in that subdivision. I look at square footage, garages, bedrooms, bathrooms and pools. I then look for the Active, Active with Contract and Pendings which all affect the value of my property. I budget accordingly as if I am going to hold it for at least 4 months, which is required in order to sell to a retail buyer with FHA funding. Depending on the price point, about 80% of our buyers have FHA funding. I look at the Active, Active with Contract and Pendings and note what ‘type’ of listing they are. If they are short sales, I really give weight on these sales because it’s very possible they would not be bank-approved and could sell lower or higher than list price. If they are Pending sale which is a straight sale, I can assume that they are close to list price; however, until they sell, I can’t be sure. I will then look on MLS or REIFAX and search a half mile radius to see what other comparables I can find. Based on all the comps and the repairs in which I plan on doing, I will determine if I believe the value of the home will be close to the middle value of the comparables or the high value of the comparables. Read More→
Last month, I taught you about two ways to make money in real estate. I covered retailing and wholesaling. Those two methods generally involve buying houses that are in need of repairs at a deeply discounted price. This month, I will teach you about the other two ways to profit in real estate that is considered to be the Pretty House Business.
Lease-Options – Many people are not aware you do not have to buy a property to profit from it. In the case of lease-options, we lease it from the seller with an option to buy it at some predetermined price and term. Our objective then is to install another tenant-buyer in it, sublease it for a higher price and monthly payment, then collect a non-refundable option deposit from our buyer. In my case, the minimum is usually $10,000 except on a few very low end houses where I’ll accept about $5,000. This deposit never gets returned to the buyer if they do not close. It does, however, get applied to their down payment. But if they move out of the house and don’t close on it they lose the deposit. That’s made real clear up front, and since all of our transactions are closed with an attorney, it’s made clear at the lease-option closing as well. Read More→
