The July 2016 Edition of The Profit Newsletter, the official newsletter of the Atlanta Real Estate Investors Alliance, is now available for download. There are 50 pages this month full of upcoming meetings, workshops, webcasts, educational articles and other valuable information for your real estate investing pleasure and success. Download it and check it out!

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Long ago, Kim and I learned that options are an incredibly powerful deal-structuring tool that allows you to control lots of real estate for little or no money…and with very little risk!  And here’s the best part: Because so few know anything about options, you have almost no competition!

Simply put, if you are not using options as one of your primary real estate investing tools, then you’re leaving a lot of money and opportunity on the table.

When most folks hear the word “option,” they automatically think lease-options.  While lease-options are fairly popular, they are just the tip of the option iceberg.

Options allow you to control a property without the risks associated with ownership.  You can control one (or all) of the benefits that come with ownership: income, profit, amortization, growth, use, management and tax benefits.

One of the best things about options is that you can control hundreds of thousands of dollars worth of real estate for less than $100 – and control it for decades.  No other document in real estate is this powerful! Read More→

Are You Afraid To Buy A Property Because You Can’t Qualify For A Loan Or You Have Less Than Good Credit?

Today I had an interesting conversation with one of my Advanced Life-Line students who confessed that he continues to have great anxiety and fears making an offer to buy a property even if it would be a good deal for him. He always hesitates pulling the trigger and submitting his offers because of his fears. He is really missing out on creating an income stream he really needs as well as being able to create wealth over time.

Being a new Life-Line student he has fears of buying any property where he will have to get some type of financing to pay for the properties he is making offers on. After talking to him about doing the numbers before making an offer to buy any property he felt much better but he still had fears of having to deal with the responsibilities associated with ownership he had never had to deal with. Seeing I wasn’t getting very far explaining how to buy real estate with the least amount of risk I finally decided to talk to him about a powerful way to profit from real estate without having to deal with the responsibilities of ownership, that I still use today. Read More→

Some people avoid investing in properties due to the amount of time and energy it takes. REIA comps is a great resource to assist you in researching and deciding on a property.  After your purchase of a potential property you need to actively care for your investment either by becoming a landlord or managing the property. Real estate investment can be time consuming yet rewarding, and the question is asked, how many properties can one person manage at one time? This is why investors who are looking at diversifying with real estate participate in passive real estate investing.

Passive real estate investing removes headaches for those who don’t want to deal with the day to day issues of property management. There are several different ways you can do this, each with their own set of pros and cons.

One could form a partnership, general or limited, and have the partner take the responsibility of managing the property(s) your partnership purchases. To move through the loophole of having financial backing, I suggest considering working with only one to two people you know and trust.  Pooling resources in a partnership allows participants to purchase more expensive properties with less outside funding. However, as suggested you need to trust your partner to take care of the properties and your best interests, and if neither of you are experienced in real estate investing, working with the Support System via REIAComps provides the knowledge you need. Read More→

Many Investors don’t think that they can short sale an FHA loan and still make a profit,   due to the guideline that FHA accepts a minimum 88% of the appraised value.  I am here to tell you about an FHA deal that will bring a Pretty Profit!!  This house is a 3 Bed/1.5 Bath/1.5 car garage, approximately 1200 sq ft in Casselberry.  From the beginning, it was challenging since we had non-paying tenants in the home that were not as cooperative as a Seller would be for access to the property.  The best part of a typical short sale is that a lender will obtain a value that is good for 90 days and if you are in a Seller’s market, you end up with a higher profit, since the values are increasing based on the sales.

The Seller just wanted out of this house debt and didn’t know what to do with non-paying Tenants!!  The lead came in from my office signage.  The property was listed and an offer was submitted.  It took the short sale lender about 90 days before they ordered the value on the property.   We were very concerned about having access to the home when the appraiser came out from the short sale lender.  On an FHA deal, the short sale lender requires an appraisal on the home which is good for 4 to 6 months, versus the standard 90 days for a BPO value. Read More→

Last month, we started by talking about a couple of basics that are an easy way to start setting yourself up for success with Buyers.  Step 1 was Confidence and Step 2 was having an Online Presence.  Both of these steps are key because people make first impressions as fast as you blink your eye these days.  How you present yourself as an individual first is paramount.  People do business with people they know, like and trust.  The first two steps address this directly.  Let’s continue with the next steps:

Step 3: Have a Real Deal

It may sound counterintuitive but if you have been in this business for a while, you know there are people that literally sit at home or work, get an e-mail from another investor, do zero due diligence if they even read the e-mail and then just click the forward button to their Buyers.

This is a fantastic way to kill your credibility in one shot using the miracle of technology.  What makes it worse is there are times where the deal is not even under contract with the person sending the wholesaler the email.  Then as a ‘trust everyone is doing the right thing’ investor, you forward that to your Buyers.  I lost track long ago of Buyers that ‘do not like or see value in wholesalers’ because of this very thing.   Read More→

“I like to talk to people. I’ve got one assistant, one Blackberry. That’s my overhead. I don’t text that much or email. I like to sit down face-to-face and have a conversation with you. I’m old-fashioned.” ~ Mark Wahlberg

As the owner and operator of my own business, I’ve become very self-reliant. I know that if I don’t take care of important tasks myself I will stress over them. It is hard to delegate work to others that you haven’t really had the time or know how to run background checks on. Even when you have carefully planned projects, sometimes it is difficult to find people with the qualifications you would prefer.

For the past few years now I have been discovering amazing talent online. I know it seems like a big risk, putting jobs online and hoping someone responsible answers your ad. Avoid the anxiety over in person interviews and researching qualifications, it’s time-consuming and I would rather focus my efforts elsewhere. It doesn’t mean I take hiring practices lightly, but I know where my strengths are.

There are many online freelance worker/client websites, but none other than Upwork. Upwork.com has been a great tool for my growing business. As I said, for many years I’ve been a one-man show. We all need a little help from time to time, and Upwork makes it simple and stress-free. Whether you need someone short term or long term, if there are short tasks you need to get done that you have no time for or if you want to build a working relationship with an independent contractor for the long haul, Upwork has this covered. For at least five years, the website has had some changes. It was once called oDesk, but the changes have been great improvements. Things have been simplified and there are safeguards in place for both contractors and clients. Plus you don’t need to be a large company to use this service. Businesses like Unilever, Pinterest, and NBC are just a few that use Upwork for hiring out virtual assistance specialists.
Read More→

I have made a ton of mistakes over the last 10 years of doing master lease options (MLO) deals. Would you like to avoid those mistakes? Well then read on!

1. A MLO Deal Is Not About You- One of the first and biggest mistakes I have made using MLOs is to think about what I want and not to give enough consideration to what the seller wants and what the property needs. Your first step in making a MLO offer is to decide if it is a fit for the seller and property. You need to find out if the seller even knows what a master lease options is. If not then you will need to spend a little time explaining it and how it will solve their immediate problems. If your offer does not solve a problem for the seller then it is likely just an offer that solves your problems. This is not likely to get accepted.  Can you fix up the property using a MLO? Sometimes the answer is NO. Decide on the condition and area before you make a MLO offer. Some areas and some repairs cannot be dealt with no matter what type of offer the seller is willing to accept. You want to get good deals and solve problems not inherit someone else’s headache that can’t be fixed. Here is an acronym I use to remind myself of this process- S.P.Y. This stands for Seller, Property, You. This is the order in which you need to solve problems. Most people start a MLO offer with the reverse idea (Y.P.S.) and this doesn’t typically work. Read More→

There are several ways to use a Realtor to help you find good quality leads for your real estate investing business. If you have not already added a good Realtor or Realtors as a part of your real estate investing dream team, now would be a good time to do so. There are many types of leads your Realtor can generate for you so let’s discuss them one at a time.

The first service your Realtor should provide for you as a real estate investor is to e-mail you the expired listings on a regular basis. You will need to set up a way for your Realtor to be paid for providing these leads. One of the ways I provide payment to the Realtor I work with is to re-list some of these properties with the Realtor once I am ready to sell them. You see the Realtors I work with sees the “bigger picture” and you need to find someone willing to work with you on a long-term basis.

You need to take the time to find a Realtor who is very creative in the way they provide leads and sell properties for real estate investors, just as I have done in my own business. And you should be working with multiple Realtors in your business in order to find a variety of leads. Read More→

I’ve been writing this column for several years now, and I’ve covered a lot of in-depth information about the securitization swindle pulled by the major banks that led to the mortgage crisis and the Great Recession. What I’m going to do this month is to take a step back and give a quick recap of what the securitized loans scam is and how the banks got away with it for so long.

First a little background. The way a bond is supposed to work is that an investor purchases a bond from a trust. The trust then uses this money to purchase mortgages or originate their own. The trust then uses the money made off of these mortgages to pay off the bonds to their investors.

In the case of Mortgage Backed Securities (bonds issued by trusts that consist solely of mortgages), the money the investor paid to purchase the bond was never given to the trust. Since the money wasn’t paid into the trust, it never had any money to purchase or originate ANY loans. Instead the bank essentially put the investor’s money into its checking account. A note was made that said the investor purchased a bond, but the trust never received the money and a bond was never issued. Read More→

When you think about the acronym “IRA,” what do you think about? For most people, it’s a very common recipe: an IRA is something in which you put your mutual funds, your bonds, your stocks…and very little else. It’s the beaten path to retirement, and it works for a lot of people. But others wonder if there aren’t ways to supplement this type of investment and ensure a consistent level of income for your retirement years. These are the kinds of people who start to research Real Estate IRAs.

If that sounds too complicated for you, just remember: the IRS allows for lots of different types of investments through retirement accounts. A Real Estate IRA is simply a Self-Directed IRA in which you place a real estate investment. And considering just how common of an investment real estate is—especially for America’s seniors who want to ensure that they have consistent income for the future—then maybe it’s time that you consider real estate IRAs too.

Not convinced yet? Let’s take a look at some of the most common reasons people consider these IRAs: Read More→

When I was going through a divorce I had no idea what to do. I was negotiating blind. I did not know what would be an equitable split. I had nowhere to look to find the answers either. The divorce attorney was not much help because they were more interested in keeping the chaos going rather than moving toward clarity. There were many variables including alimony, child support, the marital house, insurance coverage for the children, Custody rights, retirement benefits, the value on her business and mine, saving account, Christmas ornaments and the photos/ videos tapes of the family.

The way I was able to get a handle on the divorce was to set my priorities. What was most important to me? This has been covered before at the beginning of the year in the blog of setting goals. So I won’t go into it here. The next biggest thing was the evaluation of the assets.  One thing that I could not put a value on was the relationship I have with my daughters.

Sounds like the same thing in real estate where there are many variables and there are a few things you cannot put a price on. So let’s make it simple to understand. Follow the money! That’s the difference between divorce and real estate. Divorce is more than the money. Real estate is about money and returns and providing service with value. If you disagree, then call me. I need to talk to you! Read More→