The May 2013 edition of The Profit Newsletter is now ready for download as a High Quality PDF or Low Res PDF format. The Profit is the official newsletter of Atlanta REIA ( the Atlanta Real Estate Investors Alliance) and is a digitally delivered, interactive newsletter for new and seasoned real estate investors delivered as an Adobe PDF file to read on your PC, Mac, Smart Phone, iPad or other mobile ready devices with a PDF reader. 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.

See AtlantaREIA.com/The-Profit/Newsletter-Archives/ for our past editions

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The process is a long one after a home is foreclosed by the bank. These days banks take weeks if not months or a year after foreclosure to get their paperwork together, do evictions, minor clean up and make the assignments to the real estate brokers who they have hired to handle their properties. But the time of clean up and eviction is not a problem for the savvy investor, it is an opportunity to round up buyers so that these properties sell almost immediately as you get them under contract.

I suggest as an investor gets a property under contract to start the process of rounding up buyers. Videos, photos and massive email lists are several ways to attract your potential buyers.

Whenever you advertise your properties use photos or better yet video. I’ll get to more video in a minute. This tends to get the buyer serious before they visit the property. Even for buyers of a 100K home, they like to see pictures and it helps the buyer make an emotional connection. Investors and the individual buyer now search the internet to find homes that they can get serious about buying. It is very important to give them enough information to make a decision. Read More→

Branding is the marketing practice of creating a name, symbol or design that identifies and differentiates your business, product or service from any and all other competitors. Put another way… your brand is your business’s promise to your customer.

Your brand tells your customer what they can expect from your company, products and services. Your brand should uniquely differentiate your business and what you are offering from that of all your competitors. Your brand is derived from who you are, who you want to be and who you’re your prospects and customers perceive you to be.

In the real estate investing industry, Homevestors® is the number one home buying brand in America. They have embraced the “ugly home buyer” concept and made “We Buy Ugly Houses®” their registered trademark, identity and brand. Their mascot is “Ug” the ugly little caveman that helps owners of “ugly houses” out of “ugly situations”. Homevestors® is a great example of the power of branding for any real estate investing company, large or small.

Like Homevestors, I too appreciate the power of branding and have attempted to do some branding of my own at a local level with my real estate investment company, One Hour Homebuyers. We have embraced the “pretty home buyer” concept and have made “We Buy Pretty Houses®”, “Sell Your Houses in One Hour®” and “We Can Buy Your House in One Hour or Less, Guaranteed™” part of our trademarks, identity and brand. Our mascot is the “One Hour Man”, a handsome “super homebuyer” hero who “rescues” home owners from “unwanted houses” and “unwanted situations” fast, one hour fast. Read More→

A civic group asked if I would speak to its members about success.  After being in “the game” for nearly 40 years and achieving much success – along with experiencing a ton of failures – I’ve whittled my list of attributes needed for success down to nine. 

First, let’s acknowledge that each person’s definition of “success” is different.  More importantly, it’s a mistake to make my definition your definition.  You must decide what success means to you!

Sadly, lots of folks never take the time or make the effort to write down what success means to them.  This is like getting in the car to go on vacation without having a destination in mind.  How will you know if you’re on the right road, or whether you ever arrived?

Here are my Nine Pillars of Success: Action, Persistence, Sacrifice, Belief, Integrity, Associations, Life-long Learning, Loving What You Do and Giving Back.  Let’s briefly look at each attribute.  Read More→

When you sell a property, a wrap will assure you retain control of a loan you have on the property. This may be a loan you got using the property as collateral or a subject-to loan when you purchased the property.

After the sale, the buyer pays you the full payment on the wrap and you pay the underlying mortgage payment. I suggest that you make the payment to the first mortgage holder automatically each month. Don’t wait around until your buyer pays you. Yeah, I know, properly constructed wrap documents do not require you to make the payments if the buyer doesn’t pay you.

But think about it. That underlying loan is in your name and it is your credit is on the line. Or it is in the name of someone who trusted you to make the payments when you took the property subject-to. In that case their credit could be damaged.

In either case, by keeping it current, you keep the lender from scrutinizing the loan and avoid late fees and foreclosure. When your buyer is in default, you want to control the collection process without the underlying mortgage holder interfering. Read More→

“A self-taught man usually has a poor teacher.” ~ Henny Youngman

Did you know that the little iPhone I carry around with me is more powerful than the computer that took Apollo 11 to the moon? It’s true. The Apollo 11 computer was just 64 kilobytes!

It’s amazing, isn’t it? I can balance my checking account on my phone. I get 200 cable stations on my TV, and I bet someday I’ll be able to watch them all at the same time. And I’m pretty sure my kids don’t know how to dial a rotary telephone.

Yes, we’ve come a long, long way from Atari Pong!

(For my younger readers, Pong was a very simple computer game where you made a little ball go back and forth and .…. Well, I guess you kind of had to be there.)

But technology development for its own sake just creates shiny distractions. In the rush for new hardware, new applications, and new and more sophisticated Internet sites, it’s easy to forget about yesterday’s website of the day.

So this month, I’m taking a look at a website that’s well-known and not so shiny anymore, but incredibly useful: Youtube.

Yes, Youtube. I know, it’s old news, but Youtube isn’t just for wardrobe malfunctions anymore. Sure, you can watch the Shamwow guy, or see the zoo lady tickle the baby penguin (I love that one!), or be inspired by that great Chrysler Super Bowl commercial from 2011. Read More→

Commercial Real Estate

Buying Commercial real estate with your self-directed IRA is not much different than buying a residential property, except commercial real estate purchases require a whole lot more due diligence.

Commercial Real Estate – Get the Real Numbers!

The offering says gross potential, (a.k.a. pro forma). This is one of the things you’ll run into all the time. The broker says it’s got a great pro forma. Here’s what it can generate. You want to find out what it did generate, not what it’s going to generate. You want to buy what it’s doing today.

With REOs, foreclosures and distressed sales, you’re going to have to evaluate things on a case-by-case basis and get the real numbers.

Commercial Real Estate – The Truth is in the Documents!

This section outlines the many important documents you need. Having said that, remember you can make the offer in advance of receiving all of the below as long as you make the offer contingent on the receipt of the documents you need. A note about contingencies: make sure you are very specific including amounts you expect to see on the documents, ability to get insurance at the current cost, verification from the county of zoning specific to what you intend to do with the property, etcetera.

A lease is the most important document. Read every lease line by line and make notes, or get somebody that knows how to read leases line by line. Are there any special arrangements? The landlord says they’re paying $1,000 a month, but it turns out that I’m obligated every year to repaint the place, re-carpet the place, and so forth. Read More→

When do you know if you have a great house to purchase, fix and flip?  Many investors start out their career looking for fast money.  They focus on Wholesaling by looking for deals to get under contract and then wholesale for a $2,000 to $5,000 profit.  I’m not saying that you can’t make money in wholesaling; however, you do need to consider all types of real estate transactions such as short sales, lease options, options, and subject to’s in order to find where you can make the most bang for your buck!

My 16 year old son, Taylor, has been involved in my business every since he was able to walk.  He is ready to get his first house!   We used to put him through windows of vacant houses to unlock doors and get inside so that we could make offers.  He has learned so much in my business; many of you heard him speak during my Foreclosures Gone Wild event in Georgia.  He is purchasing his 1^st house, rehabbing and hiring his friends, then flipping for profit with me, Kimberlee Frank, so he can purchase his first car! Read More→

Over the last couple of months, I have described some of the options lenders have when borrowers default on a real estate loan.  In this article, I will discuss borrower’s rights and lender’s obligations when lenders foreclose upon mortgaged real estate. 

If the loan documents are drafted properly, lenders have the right to foreclose without a court order when their borrower defaults on their mortgage.  However, lenders must foreclose legally.  Failure to provide proper notice and follow the legal procedures can lead to an illegal foreclosure.  If a lender breaks the law and forecloses illegally, then borrowers can sue the lender for “wrongful foreclosure.” 

In today’s market, I am often asked about “illegal foreclosures.”   The stories in this area are many and everyone appears to have heard of someone’s aunt or cousin whose mortgage was “forgiven” because of an illegal act by a lender.  The truth is that lenders very rarely make the types of errors that allow for complete forgiveness of the debt.  Most often the errors lenders make are technical and can be remedied.  Sometimes however, lenders do foreclose in an illegal manner and this can lead to liability for wrongful foreclosure.  Let me discuss a few rights of borrowers that are more commonly violated: Read More→

Anyone who has been to one of the Atlanta REIA monthly general  meetings has probably seen the Craftbuilt booth – they ‘re the company with the projector showing a picture montage of houses in various states of repair and disrepair. So who is Craftbuilt? They’re an Atlanta based Design-Build construction firm that serves the entire Metro  Atlanta area.  They have a full complement of crews, support, and logistical staff working full time on anywhere from eight to fifteen plus renovation and build projects at a time.  Craftbuilt handles simple  paint and carpet jobs for rental houses that would be lucky to sell for 40K all the way up to multimillion dollar houses.  being  Lead RRP certified, Craftbuilt specializes in old houses – the kind we see a lot of in the Atlanta real estate market. Their experienced in-house crews have tackled just about every problem you’re likely to find in the Residential market.  Their in-house design team has successfully developed upscale projects that have sold after just a few short days on the market. Whether you’re tackling a simple flip or a one of a kind historic renovation, Craftbuilt is there to make sure that the house is maximizing its potential.

 With heavy emphasis on logistics and scheduling, Craftbuilt runs a coordination back end system called BuilderTREND;  an online collaborative program that handles the client scheduling, communications, change orders, material selections, and more . This means that if you’re running one project or ten projects with Craftbuilt, your paperwork is kept to a minimum and keeping tabs on job flow and progress is easy as logging in to the client system. Read More→

I see a lot of people going into Short Sales these days and it really surprises me. A lot of these deals always seem to be more trouble than they are worth. But with decreasing inventory as we work through the last of the foreclosures from the 2008 recession, a lot of people are looking for the next niche to make their money on. I am going to go through some of the thoughts on this.

A lot of attorneys are wary to take on short sales. They require a lot of up front work (title, preparing prelim HUDs) for a deal that may not even get approved by the Bank. Do not be surprised if the attorney asks for money up front to cover their work in case the deal does not actually go through. Also many attorneys charge a “short sale fee” at closing that can be as much as their original attorney fee. So when you go into a short sale expect your costs to be higher, and likely to be required up front.

One you get approved, you would think yourself in the clear, but don’t be so sure. Banks have taken a beating on these short sales and they have learned that some people are lowballing the offer to the bank and turning around and wholesaling it to another investor for significantly more than the short sale offer. Banks feel they are entitled to your wholesale price as a payoff and so they have made arrangements to try to get that money. Read More→

There are several great and easy way to increase the response rates you are getting from your direct mail campaigns. The higher response rate you get from your mailings the more deals you are likely to create.

One way to increase the number of responses you get from your mailings is to use lumpy mail pieces in your envelopes to entice your reader to open the envelope and read your message. This could be a penny which makes noise or it could be a magnetic business card which would add dimension. Lumpy mail is actually defined as “anything that adds dimension to an envelope.”

It can be in the form of any type of enclosure such as a flat pen, or even a piece of candy or it can be the actual container in which the mail is delivered. “Statistics show that dimensional mailings can increase response rate by as much as 80%. There are many items that are lightweight and small that can be added to your mailings to increase response with very minimal expense. Design your direct mail piece so different that it demands people’s attention, and gets opened and read.

Because I use a response mechanism within the body of my letters (a section within the body of the letter that allows the seller to fill out all the information I need) when I send them out, I will sometimes use flat pens in my mailings so that the seller has the tool they need to fill out the response mechanism right in their hand. This just removes another step or another obstacle for the sellers and they will contact me even sooner. Read More→