Kim and I have been investing in real estate since 1995.  Long ago, we learned that options are – BY FAR – the most powerful tool in real estate.  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 very popular, they are just the tip of the option iceberg.

Options allow you to control a property – a little or a lot depending on how the option is written – without the risks that come with property 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 a bunch of years.  No other document in real estate is this powerful! Read More→

These days, with so much negative information out there pummeling us every day, it’s critical that we counterbalance all the doom and gloom news with twice as much positive information and stories.

For example, Kim and I spent this past week in Florida. One morning we went yard selling. This particular day, we came across a guy who was selling almost everything he owned. Turned out he was losing his home to foreclosure and had to be moved out in a couple of days.

The guy was so negative we had to stand a few extra steps back to ensure we didn’t catch his negative funk. He blamed his situation on the government, the banks, rich folks, the economy, BP Oil, Presidents Obama and Bush, etc. Never once did he take any responsibility for getting himself into his financial mess. Read More→

You’ve done great! You bought an investment property, did an outstanding rehab and listed it with your realtor. Then it happens: You get a written offer from a potential buyer. Now what?

Let’s first look at what’s normally done, then look at another way that may work better.

Your realtor emails you the offer that is usually lower – sometimes a lot lower – than your asking price. Also, the seller is regularly asked to pay a portion of the buyer’s closing costs. Lastly, you’re given two days to respond to the buyer’s offer. Read More→

When Kim and I were in our thirties, we knew we needed to start preparing for our retirement years.  We both had family and friends who were in their mid-sixties and had to keep working because they couldn’t afford to retire.  (Social Security is no substitute for a retirement plan!)

Our big concern was where to invest.  My folks had done well in the stock market.  Kim’s had done well investing in real estate – they owned rental property.  Kim and I decided that real estate was the best way for us to go.

OK, we’ve all heard lots of landlord-tenant horror stories.  Sadly, because of these stories, not many folks view rental property as an excellent retirement vehicle.  But consider this: When you retire, if you own 10 paid-for rental homes that average $800 a month in rental income, would the $8,000 a month these homes provide help you to live better during your golden years? Read More→

Landlords – especially new landlords – often wonder (and worry) whether they are using an effective lease agreement.  Truth is, most landlords use terrible agreements.

When we bought our first rental property in 1995, we didn’t know anything about managing rental property or tenants.  Needless to say, we also knew nothing about lease agreements.  The realtor we used gave us a lease written by the Georgia Association of Realtors (GAR).  We thought it was the greatest document ever written! Read More→

It’s really frustrating when a real estate investor calls to ask for advice, then argues when he doesn’t like the advice I give – especially when the advice is square dead-on.

Last July, an investor – we’ll call him David – called asking about a “once-in-a-lifetime” opportunity that he had been told about.  It was a three-bedroom, one-bath home in downtown Atlanta that he could buy for just over $14,000, rehab quickly for $7,000, then sell for $75,000 to pocket a cool $54,000 profit.  Needless to say the investor was hot to trot.

A wholesaler brought David the deal.  A wholesaler is someone who finds a deal, gets it under contract, and then assigns (sells) the contract to an investor.  There are good and bad wholesalers out there… but this was one of the bad ones. Read More→

Some days, things go all wrong.  Other days, things happen that are so funny you can’t help but to blow milk out of your nose!  Really interesting days are when both of these things happen at the same time!

At April’s foreclosure auction, we bought a property on Autumn Place in White, Georgia.  It’s a very nice 3-bedroom, 2-bath home built in 2005.  It just needs a shave and a haircut (paint and carpet) before we can list it with our realtor.

Kim and I have been buying foreclosure properties since 1995.   The first mystery we had to solve was how to bid on a property at the foreclosure auction.  The second was what to do if we were the high bidder. Read More→

It can be argued that a butterfly and a caterpillar are one and the same.  OK, maybe they are – but not at the same time!  It’s one or the other – but not both!  So, which are you?

As real estate investors, we all start off the same – as caterpillars.  We just know the basics: how to crawl, eat leaves and poop.  Our world is limited to the tiny branch we’re clinging to.  We’re not much to look at, and we’re preyed upon by just about every creature in the animal kingdom.  Our life expectancy is about 12 seconds.

Now here’s the thing: God didn’t mean for caterpillars to stay caterpillars.  He meant for them to grow and develop into beautiful, high-flying, far-traveling butterflies…but only those that are hardworking and resourceful get to complete the journey from caterpillar to butterfly.

One of the hot topics in real estate investing these days is something called creative deal structuring.  This leads to a question that we’re often asked: What exactly is creative deal structuring?    

To answer this question, we need to begin by describing what it’s not.  One way you can buy a property is to pay cash for it.  You won’t find any creativity in that deal structure.  You can also find a property you like, apply for a mortgage, and then a month or so later, go to an attorney’s office to sign a big stack of hard-to-understand documents.  Not much creativity there either.

Creative deal structuring begins when you find someone with a real estate problem that “normal” solutions can’t resolve.  For example: A homeowner owns a nice home that in 2006 was worth $130,000 but today is only worth $70,000.  She owes $80,000 on her mortgage – making her upside down by $10,000.  Now throw some motivation into the mix – the lady needs to sell immediately so she can move to Tennessee and begin her new life.

Let’s see, a cash buyer wouldn’t be interested in this deal.  And you’d be hard-pressed to find a realtor who would list this house – unless it’s a short sale listing.  So how would you structure this hopeless situation? Read More→

One of the best real estate investing teachers in the country is Pete Fortunato.  What makes him so special?  Pete knows how to creatively structure deals in ways that make impossible deals possible.

Before Pete became one of our primary teachers in 1999, Kim and I did all of our deals the same old way.  We’d find a house, apply for a mortgage, close with an attorney and then either sell or rent the property.  Bottom line: If we couldn’t get a mortgage, we couldn’t do the deal.  We felt like we were buying a Model T Ford from Henry Ford.  Mr. Ford used to tell his customers, “The Model T comes in whatever color you want – as long as you want black.”

One of our biggest real estate investing ah-hah moments happened at our first Pete seminar.  He flashed a diagram of a house up on the screen.  The thing making this house different was that each room represented one of the eight transactional benefits of a real estate investing deal.  The eight benefits are: Growth, Income, Amortization, Profits, Management, Security, Tax Benefits and Use. Read More→