Years ago I learned appraisers and other property valuation folks use three methods to build a value for a piece of property. The sales comparable or market approach basically look at what comparable properties sell for, the cost approach looks at what it would cost to build the property, and the income approach considers the value of the income stream that a property generates or could generate. Each of these methods has a different use and different type of property for which it is most appropriate. Let me share a little more detail before giving a slightly different investor focused concept.

Comparable Sales Approach

In the comparable sales approach, a value is created by looking at what similar properties in a similar market have sold for. Your REIAComps.com Membership is very useful here. For example, if three similar three-bedroom homes sold in the same neighborhood in a range of $75,000 to $85,000, it’s reasonable to assume that a comparable property would also sell in that range. The appraiser would choose a specific value by adjusting each comp for the unique characteristics of the property that they are analyzing. You can get assistance performing this same comparable analysis by using the Valuation Support Desk through your REIAComps.com Membership. Read More→

Lack of Knowledge

Many people make mistakes due to a lack of understanding of the governing rules. This article covers two of the most common mistakes. Understanding these rules can help you grow your self-directed IRA without fear of losing out to avoidable errors.

Violating Once-Per Year IRA-To-IRA Rollover Rule

You have two options when moving assets between your IRAs; one is a transfer and the other is a rollover. Under a transfer, the delivering IRA custodian pays the amount to the receiving IRA custodian for the benefit of your IRA. Transfers can be done for an unlimited amount of times.

Unlike a transfer, a rollover can only be done once during a 12-month period per IRA. Failure to follow this rule will result in loss of tax-deferred status, which means that the amount would be treated as ordinary income and could be subject to the 10% early distribution penalty if the distribution occurs while you are under age 59½. The amount could also be subject to a 6% excise tax if not corrected by your tax-filing deadline, plus extensions. Read More→

When a tenant is in default, many landlords face a common question: whether pursuing their tenant for a money judgment is worth the extra time and expense.   All experienced landlords know that they can quickly evict a tenant.  However, the extra effort to obtain a money judgment[1] and even more effort to collect on that judgment may or may not be worth it.  In some situations, a distress warrant may solve this dilemma.   

Many landlords and property managers may have performed dozens of evictions, but may have never heard of a distress warrant.  A distress warrant is an accelerated proceeding by a landlord against a tenant to seize the tenant’s leviable property to satisfy rents owed.  Leviable property includes equipment, furniture, machinery – and as one sheriff once reminded me, cows.  This would not include property subject to the process of garnishment, such as bank accounts or wages.

The legal background of a distress warrant begins with the concept that every landlord has a lien against the leviable property of his tenant.[2]  The way to enforce this lien is through a distress warrant.  The process is not extremely complicated, but is riddled with technical requirements and pitfalls for the inexperienced.  Unlike the eviction process, which many non-attorneys pursue successfully, I do not recommend that a non-attorney attempt a distress warrant proceeding.  Let us now discuss some advantages and disadvantages of a distress warrant.  Read More→

“What’s the best way to find deals?”

This is the number one question I get asked by my real estate students. The answer is in the title. Most people new to the real estate business these days are looking for a “magic bullet” system that will bring them all the good deals they can handle. Unfortunately it doesn’t usually work that way.

There is no better way to consistently produce viable real estate deals than through quality relationships with commercial brokers and agents. No owner of a commercial property is going to go out to the road side and put up a “For Sale by Owner” sign and hope a qualified buyer happens to drive by. They are going to find a great broker and list the property with them.

I tell my students “You are trying to buy a property that is not for sale yet.” Good deals don’t stay on the market long. If you call an agent and they have something for sale, chances are it’s not a good deal. Your job is to build a relationship with this agent or broker so that when a seller walk in the door with a hot deal…you immediately get a call! Read More→

Managed by Alexandra Spollen and based in Acworth Georgia, Georgia Home Deals is a full service investment property wholesaler, retailer, property management and lease purchase company.  Alexandra has 20 years experience as a loan officer and is well suited to assist with full service property acquisition related transactions. They are well connected to the investment community and can arrange hard money loans as needed.  Their real-time updated website is http://www.homedeals.biz/. It is a simply formatted listing page highlighting their available properties.  Georgia Home Deals served 83 purchase clients in 2012 and is proud to offer their services to the Atlanta REIA community. 

Georgia Home Deals:  Wholesale property provider,  contact Alexandra Spollen at 404-660-1865, via email at alex.spollen@directlendersllc.com or visit them on the web at http://www.homedeals.biz/. Read More→

It is the goal of this column to answer questions about QuickBooks and how it is used in the REI 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: Why is it when I export one of my lists and I go to import it into another company data base it comes up with Error on line XX?

A: This error message and root cause will vary based on the information that is being imported. Here are a few examples:

1. Error occurs when the account name or account number on line xx is already being used in the file and the account is of a different type.
2. Importing and Invoice or Bill with an account type other than Accounts Receivable or Accounts Payable.
3. Importing a transaction with an account that has not been created prior to import. Read More→

Over the years, it has become easier and easier to identify a motivated seller. As an active real estate investor you will run across plenty of, what I like to call, price checker. These sellers have no motivation to sell but will sell for the right price. The problem is the right price to these price checkers rarely matches an investor’s price.  But, when you do identify a motivated seller, it is up to you to find out what will make the seller commit to you. Commitment may mean a verbal commitment or a contract. I have purchased numerous properties directly from home owners and each person committed based on different motivational factors. Many times the price was agreed on but the seller still did not sign. The reasons for the sellers not signing have been all over the board.

Once, a seller did not sign because he was an older gentleman and was not comfortable signing a contract on an ipad. He wanted a physical contract to sign and a copy for himself. I told the seller I would go down the street to print one out but he assured me that the deal was mine. He said I could return the next day and he would sign. He promised he would not sell to anyone else. The next day, I returned with a physical paper contract and he signed as promised. Read More→