The June 2017 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!

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.

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If you’d like to invest in real estate, but you can’t afford to buy property – don’t despair! Think about renting from owners who are saddled with ‘inconvenient property’ and negotiating the right to sub-lease their property to others. This is Master Leasing – the leasing of a property from an owner and then sub-leasing that same property to a tenant. I believe Master Leasing is the most economical way to get started in the real estate business today. It is a way to produce an immediate income stream without large amounts of capital.

Master leasing is an incredible tool, which can benefit both owners and investors.

It will lose an owner less than he is losing with a vacant property and it will insulate him or her from dealing with sub-tenant occupants. Master tenants are not agents of the owners, but rather entrepreneurs who are professional landlords. This gives a master tenant the flexibility to tailor a lease to the specific needs of each owner. They do not offer a ‘one size fits all’ solution, as do most property management companies. Since they are not agents working for the owner, the owners cannot be held vicariously liable for any of the actions master tenants take with their sub-tenants. This alone can reduce the owner’s liability dramatically.  Read More→

I also like to use my personal Credibility Kit to find more private lenders for my Real Estate Investing Business. You already have all the information about yourself and your company and deals you have done in one place to show your potential lenders.

Looking through your Credibility Kit leaves no doubt in a lender’s mind that they will be making a good investment in you and your properties. Plus, you have references available if they would like to see them and follow up with any of them. I also give my potential lenders an abridged copy of my Credibility Kit in case they know of someone else interested in loaning me money for my deals. This is a great way to build this part of your real estate investing business!  Read More→

From 2013 through 2016, Kim and I have rarely been the high bidders on a property at the foreclosure auction.  Why the dry spell?  Because the cheese has moved!  For example, from 2007 through 2009, the best deals were found buying short sales.  From 2010 through 2012, the best deals were found buying at the foreclosure auction.  From 2013 through 2016, the best deals have been found by buying pre-foreclosures.  Remember, the cheese is always moving.  To be successful, you can’t keep going back to where the cheese was – you must go to where it is today!

Here are the basic steps Kim and I follow when bidding at the foreclosure auction.  (NOTE: Be aware that each state’s foreclosure laws are different.)  First, in Georgia, before a property can be auctioned for foreclosure, it must be advertised in the county’s paper of record for four consecutive weeks before the auction.  Call your county’s Clerk of Court’s office and they will tell you in which paper and on which day(s) the “legals” (including foreclosure notices) run. 

On the day the foreclose notices first run for next month’s auction, we buy that paper and transfer the foreclosure info in the paper – which is difficult to read – onto our Foreclosure Sheet – which make it much easier to read!  Read More→

Many Investors avoid working with Sellers in pre-foreclosure or making offers on short sales.  They all say the same thing, it takes too long!  I strongly disagree with this decision.  I have been working on short sales for years now and even though it does take a few months, it has been the best deal spread in profit that I have ever received on any type of deal.  Let me tell you why you should consider working with Sellers in pre-foreclosure and making offers on short sales. 

The Pre-foreclosure market will continue to flourish due to the adjustable rate mortgages, loan modifications and reverse mortgages that banks have provided to many Sellers.  A lot of the Sellers in foreclosure will have second mortgages that can be discounted to pennies on the dollar. Sellers that are doing a HAFA short sale program requires the second lender to take a maximum of $8,500.00 on their second mortgage.  Read More→

It is about time that you are making your very first “get the money” presentation. I am not going to tell you much about my first presentation for money, since it was so long ago. I think I was 3 years old and wanted some candy. I am sure it did not turn out very well. I think I did the presentation in front of the wrong audience and I was not very professional. My ‘ask” presentations have gotten much better especially since I know how to effectively raise capital today and every day.

How can you get prepared to make your first professional “ask” presentation?  The first thing you must do is place yourself in front of the right audience. If you are doing the presentation in front of a group of people without any resources, you might as well be talking to the wall. If you are talking to people who have shown interest and know something about what you are working to achieve then your chances soar! So, think of doing a presentation in which the potential investors in your project have a mix of people who know you and people who don’t have a clue as to your reputation, experience level, motives, or character. The great news is the people who know you will probably advocate for you.  Read More→

If you invest in residential rental property in your real estate IRA for any significant length of time, sooner or later you will probably need to consider evicting a tenant.

There are several possible reasons you may need to evict someone: The most common, by far, is the non-payment of rent. Other common reasons include drug or other criminal activity or material violation of lease terms. Sometimes you can resolve these issues painlessly, by giving the tenant a little extra time, or by sending a notice to cure or quit the premises. But when these measures don’t work, a real estate IRA owner will have to ‘landlord up’ and begin eviction proceedings to get the tenant out.

Before you begin evicting a tenant from your real estate IRA-owned property, read this first.  Read More→

In Part One of this article, we discussed YOU and why you do the things you do. Specifically, we talked about WHY people do or don’t do things for two primary reasons: To gain pleasure or to avoid pain. This is also known as the Carrot or the Stick – the carrot is something good that we want, while the stick represents the pain we don’t want.

We also mentioned a few common things that most people in this world want/desire, like love, money, and good health as well as a few things that most people don’t want/are afraid of, like fear of missing out, getting hurt, rejection, or clowns. ;)

Finally, we talked about some stuff that you might not like – why you may not be as successful as you’d like to be, or why you don’t always do some of the things you know you should be doing.

In other words, we started with YOU. Still stuck on that? Ok, go back and read the article again. But if you’re ready to move on, let’s go…  Read More→

I know last month’s article was a little depressing but it was important and here’s why: We take daily actions in pursuit of a better life, to move away from pain and towards happiness, while the underlying emotions of fear and greed drive us. It is within these actions that we should investigate and become aware of their effects. The “better life” has a price and that price is unknown. The “better life” is culturally conditioned.  

I remember one time when I was a kid I was grounded for the day, and I sat at my window staring out with my nose pressed as close to the screen as possible to feel any fresh air and sunlight I could. Seeing and hearing the other kids playing brought feelings of anger, fear, jealousy, and envy. I wanted to be outside so bad. But I sat and endured.

The idea behind that story was that there was plenty to do in my room to keep me busy while grounded. But I wanted to be outside, I wanted to be with other people.  Deeper within was the fear of missing out on life and the fear of being alone.  Read More→

Watch the Fix and Flip Wholesale Shows on Television Just Don’t Believe Their Numbers, Time Frames to Complete the Rehabs and Their Repair Costs

Recently while surfing channels on my television I came across two real estate fix and flip shows that caught my attention. I watched each of these shows and as I watched it took all of my strength to not turn the channel in disgust. I couldn’t believe the incompetence of the people doing the shows. One of the shows was filmed in Orlando Florida and the other was filmed in Las Vegas.

I love a good comedy show as much as the next person but these shows were just too ridiculous to watch without feeling compelled to warn every unsuspecting and untrained investor not to believe what they see on these shows. Shows that never show any real facts and details about the properties they fix and flip. If you watch these types of shows be sure to take their numbers with a grain of salt and don’t try to replicate what is being shown before you make an offer to purchase any property.  Read More→

There has never been a foreclosed house which didn’t have potential profit written all over it. Today, several indicators including the firm RealtyTrac have released 1st Quarter 2017 data which shows foreclosure filings and default notices, scheduled auctions and bank repossessions are down over 5% from the prior Qtr, over 2016 and are the lowest since 2007.

Knowing the true value of real estate is critical, try to do a deal without it and see. The guidance and data within REIAComps has consistently shown investors how to determine both solid acquisition value and after repair value to earn lasting profits.

Some of the most stubborn foreclosure cases are finally being flushed out of the foreclosure pipeline, and we all can expect to see more noise in the numbers over the next few months as national foreclosure activity makes its way back to more stable patterns by the end of this year. Thus, while foreclosures are down, they will always be with us. As investors, this s a good thing!  Read More→

Every time I mention a capitalization rate to a group of learning based, future investors, I get this blank deer in the headlights’ look (not that I have stared many deer in the face). So I decided to simplify the meaning and amplify the importance.

Thecapitalization rate(R) is the rate of return used to estimate the property’s value based on that property’s net operating income. Often called a Cap Rate (Rate), it is the method for determining the attractiveness of the investment for the potential purchaser.

First one needs to understand net operating income (NOI). The net operating income is the annual income minus all expenses. Expenses would include taxes, insurance, management fees, homeowner’s insurance, common area utilities and any other expenses that is paid toward running this particular piece of real estate. It does not include the mortgage… never. This rate of return assumes that the property was paid for with cash. Therefore, when you see income on this formula, we are talking about the net operating income, or, NOI which we will use the single letter I to designate.  Read More→