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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.
The capitalization 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 >>
The first thing you may have learned when you became interested in real estate investing was either the concept of other people’s money (OPM) and/or leveraging. These are key concepts to learn early so you can invest and grow faster. However, not many people show you how to find money and if you find money, how to leverage it.
There are many ways to go about finding money for your real estate investments. The easiest and guaranteed way that I know how to find money to fund real estate deals is to have solid deals. While wholesalers and some investors try and do peddle properties with slim to no margins, these types of deals will not guarantee you any respectable funding. You want to find investment properties that are at least 70% of market value minus repairs. By repair, I mean that the estimated repair budget is enough to transform the investment property into the home you are using to value the property. I bet that if you have a deal that meets this criteria you can find the funds to fund it. When you begin to look for funding you want to know you have a true deal. DO NOT, I repeat, DO NOT take another person’s information as being correct. Do your own due diligence. The last thing you want to do is attempt to raise money with a property that is not a deal. Read More >>
Whether you’re just launching a business or you’re going online with an existing company, take some time to get acquainted with QuickBooks Online.
Your first hour with any web-based application is probably spent exploring and clicking buttons, links, and other navigation tools to get the lay of the land.
QuickBooks Online should be no different. In fact, it’s even more important to take it slow when you’re using an accounting solution. If you start entering data without understanding how everything works together, you may make mistakes early on that will be difficult to undo down the road. Read More >>
I recently read a book by Grant Cardone called the 10x rule. I am rereading it again now because it made such a strong impact. I highly recommend as soon as you are done reading this article, you buy it immediately. I do not get any kind of credit for it. It’s simply a must read for investors, in particular wholesalers.
Wholesaling is a massive action business. It takes massive action to keep the lead funnel going which is what powers the entire business. In his book, Grant talks about four levels of action to give clarity as to what your goal should be. I paraphrase them below. Read More >>
“The one thing that unites all human beings, regardless of age, gender, religion, economic status, or ethnic background, is that, deep down inside, we all believe that we are above-average drivers.” ~ Dave Barry
Life360 is an app I can’t imagine life without. I have a 16 year old driver in my family and it gives me some peace of mind knowing I can keep tabs on his miles per hour, hard breaks, even his phone useage. It will even contact me in the event of an emergency like an accident or a break down. I believe this is a must have app for any new driver.
You can do more than just spy on your kid with this app. It’s a nice closed circle where you can view the real time location of friends or family members on a private map. There are many other options to use the app. For example, you can receive real time alerts when friends or family arrive or leave home, work, and school. It’s nice if you have younger kids and you don’t want them on social media, but you can still have that experience of sharing photos and text messages with our secure, private chat. You can easily add or delete people from your ‘circle’ and see past location history for your Circle. There is also a Crash Detection service that will contact the parent or guardian. The most impressive thing is that you can track a lost or stolen phone. Read More >>
Are you looking for the fastest, easiest, safest way to make money in today’s real estate market? Then you need to learn about notes! Notes are the number one way to quickly make huge cash profits in real estate, even if you don’t have your own cash or credit to get started. In most cases, you never even own the property, which really makes for a fast, easy, safe way to profit in this marketplace.
Many people are buying defaulted bank loans at very steep discounts, either as a backdoor to acquiring the property or in order to restructure the note into a very high yielding, passive investment. You can use the non-performing note (NPN) as leverage to get the property, either by negotiating “Cash for Keys” or by foreclosing on the property. Even with the time and expense of foreclosing, since you are buying the defaulted notes at very steep discounts, there are still fantastic profits to be made.
If you are looking for a passive investment, then you may want to focus on restructuring NPNs to allow the homeowner to stay in the property. Many people use this as a ministry to help distressed homeowners. Even though the homeowner is paying only a nominal interest rate, you can make super high, double-digit returns because of originally buying the note at such a steep discount. Read More >>
I have always been surprised by the lack of time investors, wholesalers and even real estate agents put into properly advertising an investment deal. They all invest an endless amount of time and money on contracting a deal, only to drop the ball on the advertising side. Many times you can take the numbers, CMAs, spreadsheets, etc. that are used to advertise a property and in a few minutes pick the deal apart. Maybe it is a lack of time or knowledge but unfortunately I feel most of the time it is an attempt to mislead or just make a paycheck. Sometimes the info looks so well put together and impressive that it might even slip by an experienced buyer. Therefore you must know your numbers.
If you are a wholesaler, investor and/or real estate agent you really need to know your numbers. There is not a day I do not receive a wannabe deal that looks good at first glance. However, once I take a closer look, it is as bad as the ones I just deleted. Let us start with the most obvious mistake, the numbers. So the very first thing I do is add the recommended repairs plus the asking price and divide it by the estimated after repair value (ARV). I like for this number to be between 70%- 75% loan to value (LTV). Nowadays, this number is 80%+ which is usually not worth the headache unless the property value is higher. But even then, I try to stay away from that high of a LTV. Heck sometime the property is marketed at one LTV when it is a completely different LTV. Read More >>
I have talked about this subject many times before but because of a recent call from one of my students I felt it important to talk about this subject again. A few days ago one of my students called and told me she was facing a dilemma and was worried about losing her property. She told me that she had no money to pay for the annual property insurance coming due and for two years of property taxes. She didn’t have the money to pay for either. This seems to be a common problem many beginning real estate investor’s experience. This is a subject I knew all too well because years earlier I experienced this very same problem.
I guess part of this problem stems from inexperience and lack of knowledge. Although this is a problem for many, it can be solved very easily with just a little effort and discipline. I felt it very important to write this article hoping to save many newer investors the distress and sleepless nights this problem can cause. Read More >>
Your Credibility Kit tells a story about who you are and what you can do for your seller or buyer in order to get a deal done. It will list the benefits to the sellers or buyers as to why they should work with you, a Real Estate Investor. The other main function of a Credibility Kit is to give you the confidence you need in order to create a win-win solution for you with your sellers. It should have all the tools you need in it to get you through the offer making process.
For example, in the back of my personal Credibility Kit, I have a list of different types of offers I can make on a property. This helps me when talking to the seller and keeps me from getting tongue-tied or forgetting a strategy that could just help out that particular seller. It also includes a cost analysis sheet which shows my sellers exactly how much it would cost them to sell their home in the traditional way and how much money I can save them at the closing table. My personal Credibility Kit gives my sellers all the facts they need to make a sound decision to sell their property to me. Read More >>
Some say the best real estate investors achieve the title and results through years of experience. I would have to agree, however in saying that I would also add that the experience these people have is only a part of their success equation in real estate.
The most important components I would suggest you have in investing are solid real estate comps from REIA Comps to work with, diligence and focus on a daily personal marketing plan. That marketing plan should be developed, directed, and in tune to the local property market.
Goal setting is the primary reason for business success. It goes without saying that a lack of proper planning is the number one reason for failure. Proper goal setting involves setting a business plan in place for your business goals. To many people this sounds tedious. On the contrary, goal setters have more time, freedom, more money, and more success in all areas of their lives than those who don't. Well, it's no different with real estate investing. Read More >>
Before you start entering data, make sure QuickBooks is set up appropriately for your company.
QuickBooks was designed to serve the needs of millions of small businesses. To do that, it had to include the tools and processes suitable for a wide variety of companies. But Intuit recognized that every organization is unique, so your copy of QuickBooks can be customized in ways that make it work best for you.
You could just dive in and start adding records and transactions. But we recommend you do some setup first. If you don’t, you may run into some issues later, such as finding that some features you need haven’t been turned on, for example, or that QuickBooks is simply not doing some things the way you do. The good news is that you can change many of these. Read More >>
“I did surveillance a lot, which sounds exciting, but it never was.” ~ Miranda Lambert
The Arlo Camera System is a favorite alternative to the Ring alarm system. It’s very easy to install since it takes literally 60 seconds to set up. It is a wireless system that can be synced up with your smartphone. If you have Alexa by Amazon, this can easily integrate into your existing Samsung family of appliances.
The pros of this system start with the ease of installation. The base plug looks similar to a router, so it is a familiar input, then turn it on. Place the batteries in the case and press the ‘sync’ button. That’s it.
The interface is very user-friendly too, I set up multiple cameras on a property and it was simple to rename cameras based on their location, like ‘garage’ or ‘back door’ and so on. From the app or the desktop website, you can relabel cameras, give preference like which camera is a priority first, adjust the motion sensor and record length once the sensor is tripped. The best thing, in my opinion, is that the camera will record once you open your notification, and it will record as long as you are watching the camera in real time. You can preset time lengths to record or do it manually from your mobile device. There are options for membership features, but the free subscription allows for 1GB of online storage and continuous weekly storage. Therefore, if in that seven-day span you have videos saved, the eighth day will delete the first video on the first day of that time span. This should be fine for most because it gives you the opportunity to select and save videos to a device or PC before the week resets. Read More >>
From as early as I can remember, the same obstacles have reappeared in my life, taunting me…never feeling satisfied, never feeling good enough, never getting ahead. Even the greatest opportunities one could ask for were sabotaged, and once again the chance to be happy slipped through my fingers. As words and teaching were given, I couldn’t see through the fog of my own delusions and as I yearned for change, I was trapped, imprisoned by shackles of my own creation.
This adversity brought me to the most important question I’ve come to ask.
This won’t be the standard real estate investing topic, in fact it may not have much to do with real estate. The topic emphasis is focused on you and I, and the choices we make in life that create pain and pleasure for ourselves. Read More >>
Going to the foreclosure auction was the best way to find real estate investing deals from 2009 through 2012…talk about lots of low-hanging fruit! We were often able to buy a nice three-bedroom, two-bath home in a solid neighborhood for $35 a square foot. Then in 2013, the cheese moved. Buying on the steps was no longer the best place to get deals.
Let me explain: In April 2012, there were close to two hundred properties advertised for foreclosure in Bartow County, but at the auction, there were only five investors bidding on them. It was like shooting fish in a barrel. One year later – April 2013 – there were less than eighty properties advertised with more than fifty – that’s 50 – investors and hedge funds bidding on that handful of properties. Suddenly, because of the law of supply and demand, winning bidders found themselves paying $80 to $110 a square foot for a house. This was a huge year-over-year price increase!
Did this mean that all the great deals had disappeared? No, it simply meant that to find great deals, investors had to look somewhere else – like buying properties pre-foreclosure. Read More >>
Looking for a great place to invest your Real Estate IRA dollars? Start right here in the Southeast. The 2017 Homeunion 2017 National Single Family Rental Research Report is out and Atlanta was named the #1 top city in its “Opportunity Ranking” metric for real estate investments in the single family home market. The number two city was Orlando, Florida.
The Opportunity Ranking indicates markets that provide a “strong balance of supply/demand fundamentals while offering favorable entry prices and limited threats,” said the study authors. The markets in this index were measured by a combination of cap rates and entry prices, as well as projected job growth in 2017.
Lots of construction activity counted against markets in this category because of the risk of overbuilding.
The remaining cities in the top ten for this metric were, in order, Seattle, Las Vegas, Chicago, San Diego, Oakland, Detroit, Dallas-Fort Worth and Memphis. Read More >>
I have been mentoring for many years and have found that my best deals come from actually “speaking” directly to a Seller and working out a win-win situation. Since I first started investing back in 1998, I have not purchased a property directly from the Multiple Listing Service. However, some Investors would prefer not to talk to Sellers and would like to be fed deals from other Investors or from the Multiple Listing Service. We each have different personalities and based on your personality and your personal preferences, I may be talking to you. If this is your mind set, then I would recommend the following:
1) Find at least 2 Realtors that will be willing to set you up to receive listings that are emailed directly to you for your review, along with Expired Listings. You will want them to do a search for some of the following key words: TLC, Handyman Special, Must Sell, Seller Motivated, Short Sale, and REO. Read More >>
I think the better question is why wouldn’t someone give you $100,000 in cash? Is it because you would run off with the money? Is it because you have little to no experience in handling that kind of money? Does that thought run through your mind on a regular basis? Well it needs to stop! Focus on the goal and dump the negativity! If you are a crook stop reading this article. The best question to ask is, who will fund my whole project, (the purchase price, the repair costs, the monthly payments, the utilities, the taxes, and insurance) and allow me to make a good profit?
Let me put the quantity of money into prospective. Let me also put into prospective the major two differences between a hard money lender and a private lender.
In the past I thought that $100,000 was a lot of money. Today this amount will buy a nice single family house in a blue collar neighborhood. The house will need to be fixed up and it might be in an area with a less than desirable school system. So, if your business plan is to fix up houses in the price range of $50,000 then sell at the $100,000 this will work. You will be very happy to have a person invest in your project. The project must make sense. The project must make money for the investor/ lender. The investor/ lender is sharing the risk with you. The investor/ lender will want to know that they will be paid back on time and in full with no excuses or late night phone calls. Read More >>
The majority of us have been taught that financing means putting your name on that dreaded bottom line. Be thankful that the time has come for you to learn a new way to play the game of financing. Understand, however that the rules of financing have not changed; you were just not aware of all the rules. I am about to share with you ways to buy real estate without having to jump through credit hoops and debt to income foolishness. Since going to the bank is my least desirable method to finance real estate, I will discuss with you my four favorite ways: owner financing, subject 2 financing, private lending and hard money.
Owner financing is my all-time favorite way to finance real estate due to the fact that you get to set the terms of the financing, if the property is owned free and clear. You may be asking yourself, why would someone owner finance a property instead of just selling it and moving on for cash? Well, I could give you all the reasons in the world; however, for the sake of time I will give you the top three reasons: Read More >>
In this article, we’re going to discuss something vitally important that may very well help you understand a LOT about yourself and everyone around you on this planet. Yes, that includes dealing with sellers, buyers, private lenders, and even those alien creatures we love to call tenants. Also-your mother, brother, father, sister, sons and daughters, uncles, best friends and distant relatives.
So You might NOT want to read this article... Unless you want to discover the secrets behind the reasons WHY people DO or DON’T Do the things they do...or don’t do.
It all comes down to TWO things. The Carrot and the Stick.
The CARROT represents something GOOD that we WANT, while the STICK represents something BAD that we DON’T want. Read More >>
Networking is perhaps the most underestimated resource every single investor has. I am constantly amazed at how in a world as interconnected as it is, I am constantly seeing how little we leverage each other to get more deals done. I sat recently and wondered why and came to some conclusions:
There are probably several reasons we can come up with that aren’t written down here. The point is all of these above and more keep us from simply reaching out to others, much less doing business with them. Take for example social media. Read More >>
This month I am sharing some Mental Gems that I know would be of great use to you. It has to do with the misconception that…BIGGER is BETTER and/or Quantity over Quality.
Just this past month I was speaking with one of my platinum students in Dallas, TX. We were discussing his marketing when I shared this view with him to make a clear point. You see, he was having a problem that most of us have at one point or another in our investing career. We begin to doubt that we are doing enough and start to believe that we need to do a LOT more because the deals are not knocking the door down. You see, one thing that we have to be clear on is the understanding that the deals will come as long as we are consistent in our marketing! Read More >>
How important is it, when meeting with a seller, buyer, renter, realtor or contractor, to be totally focused on that person? If you’re not paying complete attention to what that person says and how he or she says it (tone of voice, hand gestures, body position, eye movement), isn’t there a good chance you’ll miss critical information that’s being shared with you?
The number of people who are not 100% there during a meeting has become epidemic – and is a major pet peeve of mine! If you’re over fifty years old, you already know what I’m talking about. Baby Boomers grew up without cell phones, emails, and text messages. Heck, we didn’t even have phone answering machines!
Here’s an example of this epidemic at work. A real estate investor needed help structuring a deal and asked for an hour of my time. He drove up from Atlanta and met me at the Adairsville Waffle House. Read More >>
When making offers on properties as an Investor, you will need to have your exit strategies in place prior to purchasing the property. What I mean by that is, who is your buyer and what type of financing are you going to allow the buyer to use when you sell the property. Knowing this will allow you to maximum your profits.
When I look at properties to purchase I always analyze the value of the property and how long I will have to hold the property before I am able to sell the property for a profit. The comparables that I use are through Realtytrac.com and also the Multiple Listing Service. Realtytrac will give me the values in the area, however, the Multiple Listing Service “MLS” in addition to values will provide me with how the property was sold ie; Cash, Conventional mortgage, USDA mortgage, VA mortgage or FHA mortgage. You can normally assume houses under $200,000 that many of the buyers purchasing at this price point are FHA mortgage buyers. FHA mortgages are mainly used for first-time homebuyers. The Mortgage Lender requires 3.5% as a down payment which attracts many first-time homebuyers. Read More >>