The February 2013 edition of The Profit Newsletter is now ready for download as a High Quality PDF or Low Res PDF format. The Profit Newsletter is the official newsletter of the Atlanta Real Estate Investors Alliance and is a digitally delivered, interactive newsletter for real estate investors 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 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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Our bank savings account is earning less than 1% interest.  It’s not even keeping up with inflation.  Meanwhile, Kim and I did a Lonnie Deal a few weeks back and we’re getting an eye-popping 50.38% yield on our investment.  If you’re like us, you believe it makes better financial sense to get a higher yield versus a much lower one.

So what’s a Lonnie Deal?  Basically, it’s when you buy a mobile home (that’s right, a trailer) in a mobile home park for cash and then sell it on time.  Hey, in 2008, I had the same soured look on my face as you do right now as you ask, “Trailers? Seriously?  Are you kidding me?”

Back then we were getting tons of calls from folks looking for $500-per-month housing.  We couldn’t help them because our single-family houses rented for between $800 and $1,400 per month.  I remember telling Kim that because of the huge demand for $500-per-month property, we needed to start doing Lonnie Deals.

We bought our first trailer on September 19, 2008 in Bartow County, Georgia.  Our all-in purchase cost was around $5,500.  We sold it on November 9, 2008 for $16,900 with the following sale terms: $500 down, $16,400 loan balance for 75 months at 18% interest with monthly payments of $375. Our yield on this deal is a jaw dropping 81.22%! Read More→

We are already in the second month of 2013 and I just had a conversation with one of my students who wanted to know how to create wealth in the shortest possible period of time. The following is my idea how wealth for any real estate investor can be created in the shortest period of time.

Here is an example of how you can quickly achieve financial freedom and then wealth investing in real estate.

For instance, the first thing you need to do is buy 10 to 15 well selected income producing properties you are willing to keep long term as your retirement program and the base of your future wealth. I personally love the thought of someone else having to go to work every day to earn money they give me in the form of rent each month that pays for my properties without me having to have a job or have to go to work every day. Then once you have bought your 10 to 15 keeper rental houses in good neighborhoods, with tenants who are paying on time, every month, let’s say, $1,000 each month of which $520 goes for the monthly loan payment, and after monthly expenses of property taxes, property insurance, a maintenance fund and a vacancy fund leaves you from the $1,000 gross rent approximately $150 each month to put into your pocket. Let’s say for each of your keeper rental properties you paid $88,000 with very little money down and were able to get seller financing terms for 30 years. Read More→

Have you ever thought about getting into the multifamily business? It’s not easy and it’s not for everyone, but if you have what it takes I can show you how! I created Real Estate Raw to pull back the curtain on the commercial multifamily business. I have survived the down turn of the economy and quite frankly I don’t want to go through that again. Do you?!

How many real estate seminars have you sat through to only find that it was one big SALES PITCH! Starting a business armed only with sales pitches is never a good thing. In this 5 part series I will be teaching you the “real side” of the real estate business.

Notice I keep saying real estate “business”? That is one of the first lessons that most people get wrong when starting out in real estate. Let me clarify this for you.

An investor is someone who is sitting around with cash that they need to get a return on. If you have all the cash you need to buy real estate with…then you are an investor. If you are trying to create wealth in real estate (not spend it) then you will need to raise money and possibly qualify for some loans…you are not an investor, you are a real estate entrepreneur. Read More→

Landlords often have mixed emotions when their tenants call and offer them money after a dispossessory warrant (an eviction) has been filed.  On one hand, landlords are in the business of collecting rent.  However, they worry how it may affect moving forward with the eviction.  Accepting a payment after an eviction is filed does affect your rights. 

Residential Landlords

A residential landlord has a duty to accept a payment from a tenant who is in default if and only if the tenant tenders “all rents allegedly owed plus the cost of the [eviction].”[1]  However, the tenant cannot wait until the last moment to do this.  They must tender the full payment within seven days of the day they were served the eviction paperwork.[2]  There is no need to worry about a tenant doing this perpetually because a landlord is only obligated to accept this type of payment once per year.[3]  Making this payment provides a complete defense to the eviction and, upon receipt, a landlord should dismiss the eviction.

If a residential tenant offers a partial payment, however, BEWARE!  A residential landlord who accepts a partial payment from a tenant after an eviction has been filed waives his right to continue with the eviction and admits the continuance of the lease.[4]  In simple terms, the eviction fails and the landlord must start the eviction process over if he wishes to evict the tenant.  It does not matter when the partial payment is made – whether one hour after the eviction is filed or five minutes before the eviction trial.  Thus the landlord must either reject the partial payment or, if accepted, he must restart the eviction process.  Read More→

D. S. Murphy & Associates is a full service real estate appraisal firm with over 25 residential and commercial appraisal associates. Their average years of experience are over 15 years. The firm is headquartered in Atlanta with offices also in North Carolina and Florida. Each D.S. Murphy associate is an expert in their local area. So if you have a property in Cumming, you’ll be working with an associate who lives and works in South Forsyth County. 

D. Scott Murphy, the owner, has an SRA designation from the Appraisal Institute, the most respected designation a residential appraiser can earn and held by less than 1% of appraisers. In 2004 he was appointed by then Governor Perdue to the Georgia Real Estate Appraisers Board which  regulates 4500+ appraisers throughout Georgia. D S Murphy & Associates has appraised over 150,000 properties in its 30 years.

In 1999 D. S. Murphy & Associates opened a real estate school to offer continuing education classes on various appraisal topics. Classes are offered throughout Atlanta and all AREIA members can attend any class at no charge and earn CE credits if they hold real estate sales, mortgage loan officer or attorney’s license. Classes are posted at www.dsmurphy.com. Read More→

Blue Collar Genius Defined

A Blue Collar Genius is all of us who have mastered our craft with hard work, diligence, taking action, creating experience, making mistakes, and most importantly never giving up!

That’s a blue collar genius by my definition. How many times have you said I’m smarter than he is, but he’s driving the big Cadillac and you’re driving the little economy car? How could that guy ever make any money?

Perspiration, Inspiration, and Blue Collar Genius’

Thomas Edison said “Genius is 90% perspiration and 10% inspiration”.

The Top Real Estate IRA Investors Know Lack of Knowledge = Fear

How many people do you know that have been to every seminar, they know more about real estate IRA investing than anybody you’ve ever talked to, and when you ask them “how many deals have you done?”, they say “Well, I’m still working on my first deal.” You ask, “How long have you been a member of the group?” You’re not shocked when they respond, “About eight or nine years, but I’m looking.”

Knowledge is wonderful, but you have to actually use it! Read More→

In my last article, I explained that there are two approaches investors can take to determine whether or not a lender has been negligent or committed fraud.  The first approach I described is to look through the paper trail to dig up issues.  The second approach is to follow the money.

Not many people truly understand how the mortgage and finance industries work.  It’s basically a shell game with them moving money around with little regard as to the laws and regulations that govern how banks are supposed to act.

They play this constant game all supposedly in the name of increasing the money supply. Attorney Neil Garfield describes the process as the bank starting out with $100 in the left pocket and taking $10 out to deposit in the right pocket, but still reporting to the SEC and investors that the full $100 is still in the left pocket.  When the next $10 comes out, described as trading profits or a fee, the amount in the left pocket is still reported as $100 rather than the $80 that is actually there.  Read More→

Many Investors and Realtors avoid short sales like the plague. They are definitely missing the boat! My business specializes primarily in short sales and I have seen an increase in the number of approvals we are getting. The time line for a short sale varies from 90 to 120 days if you submit the lender a “complete” short sale package. Since short sales are dominating the market, the Lenders are creating more streamlined processes to conduct smoother short sales. If you do short sales, then I am quite sure you have heard of the online system called “Equator.” Equator allows all of the short sale paperwork to be processed electronically through one common venue, versus traditional and random faxes and emails. Having a file processed online avoids the common objection from the short sale lender of “We didn’t receive the documents.” Effective January 1, 2013, the newest lender that has started to use Equator is Chase. The following lenders and servicers are presently using Equator: 1) Bank of America, 2) Chase, 3) Wells Fargo, 4) GMAC, 5) Nationstar, 6) ASC, 7) Carrington Mortgage, and 8) Homeward Residential Services.

The Equator System assigns applicable tasks to each party (Agent, Negotiator, Closer, etc) including a deadline in which to complete each task. I like the fact that the lenders can no longer say “Oh, we never got that paperwork.” However, I don’t like the fact that they are tracking our information. Nationstar has taken the collection of Buyer’s information to a whole new level. They require all Buyers to fill out a loan application even though they most likely will not be using Nationstar as a lender. This application has been mandatory and this has not been waived on any of my files. If you are a Buyer on any property, you are required to provide your name, address, telephone number, DOB, SS#, assets, employment history and more. This is regardless if you are purchasing for investment or personal use and if you are getting a mortgage or paying cash. Read More→

“I’m known for my handwritten notes.” ~ Pamela Anderson

 You’re driving your Uncle Bugsy to the doctor when you spot a “for sale by owner” sign in front of a nice little brick house. You’re already running late, but you’ve been watching this house – it’s got a big blue tarp draped over the roof – for a couple of months now. You’ve got no pen and paper, and you won’t have time to stop later. Sure, you can snap a picture with your cellphone, but you’d really like to take some notes, too.

Unfortunately, Uncle Bugsy isn’t known for his patience, so you’re only going to have about a minute before he starts complaining about how inconsiderate kids are nowadays.

What should you do?

If you have an iPad, the solution is a great little app called CaptureNotes. CaptureNotes might look like just another note-taking application, but it’s not. Yes, it lets you do all the usual note-taking things: create notes, choose the type of paper and ink color, and doodle and scribble on a touch screen. So far, it’s pretty ordinary.

But there are three other things CaptureNotes does that make it really useful for us as real estate investors. Read More→

By remembering just a few basics, you, as a Real Estate Investor, can quickly determine whether or not a seller is motivated to sell their property. First of all, a motivated seller will ask questions like “how soon can you buy my house?” or “How can you help me get out of this situation?” or “How soon can you get here?” An experienced Real Estate Investor knows these are really good questions for a seller to ask.

There are two types of houses we are going to buy, either pretty houses or ugly houses and there are motivated sellers in both of these categories. When you are marketing to sellers, there are certain types of sellers who are much more likely to have a house they need to sell.

For example, I personally like working with out of state owners (folks who own a property where you live but don’t live there full time), heirs, divorces, vacant houses, estate and probate properties, military transfers and pre-foreclosures. These sellers are much more likely to have a house they need to sell “right now” and that’s the kind of seller you want to work with. As a Real Estate Investor, you may also run into landlords who are fed up with tenants ruining their properties over and over. These are all good sources of motivated sellers. Most of these sellers are folks who don’t live in these properties. Read More→

It is the goal of this column to answer questions about QuickBooks and how it is used in the real estate investor arena. Know how to record transactions in the proper way and have your set of books in good shape when it comes time for taxes. It is our intention to do this by you the members submitting questions to Karen@smallbusinessadvisor.biz, and getting answers here in this column.

Q: I am having difficulty reconciling my bank account.  I have reviewed each entry and have found that several of my deposits do not match the amount the bank has for them. How do I see all my detail on each deposit without clicking on each one to open it?

A: Go to Reports – Banking – and look for a report called “Deposit Detail”. It will give you line-by-line detail of your deposits in one report and you can compare that to what you have in the bank.  If you make copies of the checks for each deposit and put it with your deposit ticket on each one, that will give you a paper back up of what you actually gave the bank. This way if the bank made the error then you have details of what you produced to the bank. Read More→