Over the past twenty years, Kim and I have bought a wide variety of investment homes – everything from a one-bedroom, one-bath duplex to a six-bedroom, four-bath McMansion. Experience has taught us what makes the best – and worst – rental property!

Jack Miller said: Everything else in real estate is harder than a house. With that said, Kim and I stay away from townhomes, condos, duplexes and apartment buildings. We’re not saying these are bad investments; it’s just that they require a lot of hands-on attention, and our goal is freedom, not a j-o-b.

When it comes to single-family homes, the most in-demand property is a three-bedroom, two-bath home…with a garage…without steps…on a level lot…in a nice, convenient neighborhood. We call these Walmart houses.

Think of a Walmart house this way: Go to a checkout register at Walmart that has ten people in line. You hold up a picture of your investment property and ask, “Who would like to live in this home?” You want eight out of ten hands to go up. Next – and this is the most important question of all – you ask, “Who can afford to live in this house?” The eight out of ten hands need to stay up. If several hands drop, then your rental property is too high-end – which means you’ll have fewer prospective tenants able to afford the monthly rent…and having fewer applicants is not better when it’s time to rent your property! Read More→

Buying properties for your real estate IRA is competitive. That’s especially true for investment properties, where it’s critical to buy properties at an advantageous price. Real estate investors must be more price-sensitive than retail buyers and owner-occupants.

But these days, It’s routine in many markets for buyers to encounter competitive bidding situations: Where multiple buyers are making offers on a given property at the same time.

According to data from the Redfin Corporation, 61 percent of offers from their agents were facing competition from other buyers in March of 2015. This number has bounced around between 45 percent and 75 percent – the high coming in early 2013. But the number seems to have made a substantial uptick in recent months, zooming from the 45 percent low at the end of 2014 all the way back up to 61 percent in just a few short months.

In San Francisco, 94 percent of offers are facing competitive bidding, according to the brokerage company’s agents. Read More→

If you ask most people they would probably tell you that the foreclosure crisis is over, and that we’re in the middle of a housing recovery. The fact of the matter is that foreclosures are continuing, but the banks have slowed and managed the process a bit to keep the government off their backs. That’s the bad news. The good news is that a recent Supreme Court ruling has provided homeowners with a silver bullet that could stop a foreclosure in its tracks!

As spelled out in a January ruling by the Supreme Court, a homeowner’s right to rescind their loan could immediately stop a foreclosure. The right of rescission is essentially a consumer protection built into the Truth in Lending Act (TILA) that allows a borrower to rescind their loan if the lender failed to fully comply with all of the requirements of TILA. As you might imagine, TILA violations are incredibly common. So how does the right to rescind stop a foreclosure? It’s simple. From the moment you drop your notice of rescission in the mail, the note and mortgage are nullified. The bank can’t foreclose on a note and mortgage loan that have been nullified. The bank has 20 days to challenge the rescission, but until they have effectively argued that they have the right to enforce the note and mortgage (without being able to use the note or mortgage in their proof of standing, the foreclosure cannot continue. It should be noted that this only works on primary residences. It will not work on second homes or investment properties. This also works better on refinance homes than on original mortgages, but it is still possible on original mortgages (purchase money mortgages). Read More→

Anytime real estate investors get together the question immediately asked is, “How is your buying/contracting going?” What they are asking is do you have a good amount of leads coming in, where are those leads coming from and are those leads any good. Of course, mostly everyone says they are doing great. Personally, I like to “keep it real.” If leads are low I admit it because I know that they will eventually come in. Meanwhile, I continue working and following up with all the leads in the pipeline. The follow up is what keeps a real estate business, or any business, consistently profitable.

In real estate, you are not going to crush it week after week, month after month. Real estate fluctuates and what works one day may not work the next. The key is consistency. If zero seller leads are generated one month from mailers, it does not mean I stop sending letters, it just means mailers did not generate leads this month. The same can be said for internet marketing, bandit signs, networking, flyers, etc. As a real estate investor you must always market through as many avenues that provide the greatest returns. In some markets bandit signs may generate lead after lead while in other markets you get zero calls. I usually test out new marketing strategies for about six months. During those six months I keep records of the cost, leads coming in, appointments set, contracts signed, number of closings, and of course profit. This lets me know if the marketing is working or not. It also lets me know if the lack of closings is due to the marketing or the people receiving the leads. If people are clogging the deal pipeline it may mean they need more training. In other words, make the adjustments where they are needed to convert more leads. Marketing will always require tweaking and more tweaking just when you think it is “perfect.” While all this is helpful and profitable the number one cause of profit is in the FOLLOW UP. Read More→