The September 2013 edition of The Profit Newsletter is available for download just in time for our Atlanta REIA Main Meeting on September 9th. You can download The Profit Newsletter as a High Quality PDF or Low Res PDF for slower devices. The Profit is the official newsletter of the Atlanta Real Estate Investors Alliance and is a digital, 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! The high res version of The Profit is “print ready” for those who want to print the newsletter on their home or business printer. Also, be sure to Subscribe to The Profit Here so you don’t miss a single monthly issue.

See The Profit Archives for our past editions.

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Don’t Question Having a Mentor… JUST HAVE ONE!

I remember when I decided to quit my job as a legal secretary and become a millionaire in real estate!  I started with Carleton Sheets’ course.  Once it arrived, I was to read it and take action.  Yeah, right!  I found that between my J.O.B. (Just Over Broke) and taking care of my children, I was busy and distracted, so the course sat on my shelf collecting dust.  About 6 months later, I got a call from Carleton Sheets’ organization asking if I wanted to be in their Mentor Program.  How much?  They said $2,000.00.  At that time, I had to make a crucial decision that would change my life.  Did I just want to “dream” about leaving my 9 to 5 job or did I really want to take action and make it happen?  I thought about it for a couple of days and I said “YES!!”  The training was just the start.  I was able to purchase 6 homes following the course.  Working in my home environment with so many interruptions was the hardest thing I have ever done in my life!  I can tell you one thing, if it wasn’t for the Mentor pushing me… I would have given up and quit!

Just like many of you reading this article, I attended multiple boot camps and ordered over $250,000 worth of courses.  The only difference between where I am in real estate and where you are, is that I took action and hired a Mentor to continue to push me forward and hold me accountable.  And a Mentor gives you the answers to EVERY question you have!  I am only quoting one of my students, “Having Kimberlee is like having personal access to your own magical Real Estate Encyclopedia!  She has answers and solutions for everything!”  That’s gotta give you some relief right there about what a Mentor can do for you!  Everyone learns differently.  Some people are visual learners and have to come to a class room and be taught, other people have to physically do a transaction to understand the process, and then some can pick up a book and do exactly as it says in the course and become successful. Read More→

Last month’s article was on “Driving for Dollars and Farming with Flyers”. As you are out driving neighborhoods in search of houses to buy, you will soon discover that there are many vacant houses out there. Some of these houses are obviously for sale or rent as indicated by a sign in the yard, but many are not so obvious. These houses are just sitting empty, often deteriorating, waiting for someone like you to come along and buy them. Many of these houses appear to have been abandoned and unkept.

Vacant houses often provide some of the best opportunities to create some killer deals. After all, many of the houses have mortgages, taxes and other expenses that the owner is responsible for paying, even as the house sites vacant and unused. Even houses that are free and clear have expenses the owner must pay to avoid tax liens and code enforcement violations. Since the owner doesn’t live in the house, they are often highly motivated and more than willing to do just about anything to get rid of it.

When I am out driving neighborhoods and spot a vacant house, I stop and take pictures and write down the address. If the house is for sale by owner or for rent, I write down the number on the sign and call the owner later. I will even call Realtors from time to time if I know the house has been sitting vacant for a while since the owner might be motivated and eager to sell. Read More→

Welcome back! Here’s what we covered in the last article: Why the PHONE is an essential element of your marketing and why there’s a big need for several different phone numbers for various reasons and functions for your business.

We also mentioned how having several phone numbers can add up to be an expensive ongoing cost that adds to your monthly overhead business expenses.

I then showed you an incredible FREE solution: Google Voice (GV)!

Finally, we talked about HOW to get your own GV number, and a few business applications & uses. Do you remember all that? If not, go back & re-read that article!

And if you haven’t already gotten your own Google Voice number, what are you waiting for? Go get it NOW – it’s FREE!

Here’s What We’re Going to Cover in THIS Article:

• A quick & easy shortcut to get to your GV options. This makes it really easy.
• A few secrets. You’ll need these.
• How to get SEVERAL Google Voice Numbers. Use ‘em for home or office!
• Some limitations (and how to overcome them).
• And finally… How to get a FREE home phone LINE (and number). Yes, it’s true!

So, let’s begin with this… Read More→

As the market improves, I have more and more people coming to me for coaching. I am excited about this because it means that you are taking responsibility for your success. You are reading my articles, and you are talking with me to achieve what you want in your life.

One thing that I continually ask new investors to do is reflect on each deal, each interaction, each transaction. This allows you to see what was successful so that you can apply it again and thus achieve even more success.

Here is what I have found that will make our relationship even better (and thus your experience and profit even better): ANSWERS.

Before I can truly help you, there are…

Four Answers You Must Know

1. How much Money is in it for YOU?
2. What are you buying?
3. What is the owner’s story?
4. What is the area?

You MUST have these 4 questions answered
BEFORE I can help you make a deal.

Recently someone I was coaching came to me with what he thought was a great deal. Read More→

(This article is continued from Part 2 in the August 2013 Edition of The Profit Newsletter.)

3. Lack of action. There’s an old saying that goes “Even a turtle won’t get anywhere until he sticks his neck out.” Another old saying (that I made up) is “You’re never going to get rich sitting on your behind and waiting for it to come to you.” You have to make it happen. You have to get things started. You have to put the wheels in motion. And if they get stopped, guess who has to get them started again. You guessed right.

   Movement, action, activity, progress… they’re essential in any successful business. Without activity on your part, nothing positive will happen for you. It starts with that first call, that first conversation with a seller, even the first visit to a Realtor. But your ship can’t come in if it never gets launched.

   By action, I don’t mean running in place. Sure, you can go to the seminars and listen to the tapes so often you memorize everything I’ve ever said. You can acquire all the tools you need to do this business. But then the time comes to fish or cut bait and you find yourself standing by the creek bank watching the water flow by. My friend, all the education in the world is worthless until you put it into practice.

   The best time to start is now. And I mean right now. I want you to get up after you’ve finished reading this newsletter and do something that will get you going on your first deal. Call a Realtor for leads. Call a couple of sellers in the classifieds. Drive around looking for FSBO signs, or place your own “I Buy Houses” ad in the paper. Just Do It. You’ll be surprised how taking a tiny step will propel you forward towards your goals. You see, any one action on your part can produce a result. Of course the more actions you take, the more results you’ll get. Read More→

By now you have heard in the news about robo-signing, MERS, etc. and how the economy was brought down by Mortgage Backed Securities.  But what, specifically, does that mean and how does it affect us as homeowners and real estate investors?  As can be expected, the greatest financial fraud every pulled over in the history of the world began with taking away responsibility from banks and brokers…

When a broker purchases a stock or bond with your money, it’s standard practice to buy the stock in the name of the brokerage.  This was all well and good when the owners and partners of the brokerage were personally liable for all of the consequences of an investment.  After brokerages were allowed to incorporate and become “legal persons,” the owners of the brokerage houses were shielded from all of the legal and financial responsibilities for the consequences of their investments.  This took away all of the personal risk they incurred by making wild bets on exotic investments with their clients’ money.  After all, it was just the company that would get in trouble, not the individual brokers or owners of the company!

This left the commercial and investment banks free to concoct the securitization scheme.

The way a bond is supposed to work is that an investor purchases a bond from a trust.  The trust then was to use 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.

That’s how it is supposed to work. Read More→

With the real estate markets slowing in many areas of the country, we are seeing a resurgence of owner carryback financing. Most of you are aware of the basics of such financing, but you may not have been exposed to some of the more creative approaches.

Let’s look at Jack who wants to move away from day-to-day management of his properties as he is involved in another business venture that is taking more of his time. He could just sell off his properties, pay the taxes and re-invest the proceeds in an investment that doesn’t require the management oversight.

One house Jack purchased some time ago for $100,000 is now worth $150,000. After concessions, realty fee and closing costs, Jack nets $140,000. And after the $80,000 mortgage is paid off, he has $60,000.

But hold on, federal and state taxes have to be paid. Between depreciation recapture and capital gains, taxes total about $12,000. So, Jack is left with $48,000 to invest. Read More→

I’ve written a weekly real estate investing newspaper column for more than ten years. During this time, we’ve looked at all kinds of creative deal structures and financing…but what exactly are these?

The easiest way to tell you what creative deal structuring is, is to tell you what it’s NOT. It’s not finding a house to buy at fair market value and then going to an institutional lender to get a traditional mortgage. That said, about everything else is creative deal structuring and financing.

The best deal structurer I know is Pete Fortunato. He has been one of our three primary real estate investing teachers since 1999. (The other two are Dyches Boddiford and Jack Miller.) Over the years, we’ve taken almost every seminar Pete has taught – every time he has taught it!

Much of our real estate investing knowledge comes from Pete. My biggest ah-hah Pete moment was seeing a picture of his Benefits House for the first time. These days, that picture hangs on the wall in front of my desk. Whenever considering a deal, I look at it and contemplate different ways the deal can be done. Read More→

“The future starts today, not tomorrow.” ~ Pope John Paul II

Remember last month, when I talked about how amazing it is that one little smartphone or tablet can do so many useful things? Well, not everyone has much use for smartphones.

Take my Uncle Milt: He’s convinced that true happiness lies in a phone that’s just a phone. And he’s pretty sure iPads are, well, evil. Every time I see him, he grumbles about the latest new-fangled technology. Bad enough they invented the fax machine, he says – he never did get the hang of that thing. Too many buttons, and he never knew whether to dial 9 or 1 first. And don’t even mention that curly fax paper!

Well, yesterday Uncle Milt’s mentor told him he has to learn how to use an iPad. Uncle Milt is not a happy camper.

Does this sound like you? If it does, this month’s column is for you. Read More→

When a real estate developer runs into a snag, and needs additional money to complete a project, or he wants a shorter-term loan of, say, six months to six years, he frequently turns to the “hard-money” market. In a nutshell, these are lenders who are looking to get a decent return on their money, with a margin of safety. They usually do this by holding a lien on the property, or on another property the borrower owns, in a practice called “cross-collateralization.”

If you’ve got a lot of money in your self-directed IRA, and it’s been earning relatively weak returns, hard money lending provides a potentially lucrative way for you to “take charge” of your assets. With hard-money lending, you aren’t depending on the skills of a mutual fund manager you’ve never met, nor do you need to settle for the lackluster interest rates currently available from investment-grade bonds and treasuries.

Instead, you’re free to seek your own deals with any number of private real estate developers. Here are the advantages to hard-money lending in your self-directed IRA: Read More→

As investors, we all hope and wish that all of our contracts go smoothly. As much as we hate to admit it, the truth is that some things are out of our control. Appraisals, hidden renovation cost, weather and financing are just a few examples of what we have little to no control over. How one handles these obstacles is going to be what differentiates you from all the other real estate investors.

Last month I terminated my first contract of 2013. I contracted this property with the intent of purchasing it to remodel and sell. At first look it was a no brainer. The home was a newer property located in a popular suburb. It was in need of some cosmetic updating and stainless steel appliances but the market changed overnight. As usual, I did my due diligence, pulled comps within the last few months, calculated the renovation cost needed to match the comps, and offered accordingly. A week before closing I reviewed the market and it turned out the builder had sold two new construction properties and listed the homes directly to pending. These homes KILLED the deal. The after repair value I had in mind was for the same amount as the new construction properties. Obviously, a remodeled home cannot be priced the same as a new construction. At this point many others would have terminated and moved on but not me, and you shouldn’t either. Read More→