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Chattanooga REIA Blog

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Buying at the Foreclosure Auction

By Bill Cook on June 4, 2017
Bill Cook

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 readRead More >>


Less Competition with Short Sales

By Kimberlee Frank on June 4, 2017
Kimberlee Frank

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 >>


Getting Prepared To Make Your First "Ask For The Money" Presentation

By Russ Hiner on June 4, 2017
Russ Hiner

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 >>


Three Eviction Mistakes Real Estate IRA Owners Make

By Jim Hitt on June 4, 2017
Jim Hitt

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 >>


The Carrot? Or the Stick? Which Do THEY Prefer? - Part 2

By Tony Pearl on June 4, 2017
Tony Pearl

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 >>


The Question No One Asked - Part 2

By Jonathan Henrich on June 4, 2017
Jonathan Henrich

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 >>


Are You Looking For a Good Laugh?

By Larry Harbolt on June 4, 2017
Larry Harbolt

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 >>


Foreclosures on the Move?

By Mark Jackson on June 4, 2017
Mark Jackson

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 >>


Capitalization Rate Explained

By Deborah Harris on June 4, 2017
Deborah Harris

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 >>


Where's the Money?

By Michael Vazquez on June 4, 2017
Michael Vazquez

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 >>


Your First Hour with QuickBooks Online

By Karen Bershad on June 4, 2017
Karen Bershad

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 >>


What is Massive Action?

By Frank Iglesias on June 4, 2017
Frank Iglesias

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 >>


Life on Your Time: Life360 App Review

By Don DeRosa on June 4, 2017
Don DeRosa

“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 >>


Note Buying -The Fastest, Easiest, Safest Way to Make Huge Profits In Real Estate

By Donna Bauer on April 30, 2017
Donna Bauer

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 >>


Master Due Diligence

By Michael Vazquez on April 30, 2017
Michael Vazquez

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 >>


Are You Running Your Real Estate Business Like a Business? If Not, You Need to Carefully Read This Article!

By Larry Harbolt on April 30, 2017
Larry Harbolt

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 >>


Building Your Personal Credibility Kit (Part 2)

By Kathy Kennebrook on April 30, 2017
Kathy Kennebrook

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 >>


Staying Relevant in Real Estate

By Mark Jackson on April 30, 2017
Mark Jackson

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 >>


Establishing Preferences in QuickBooks

By Karen Bershad on April 30, 2017
Karen Bershad

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 >>


Everyday Use: Reviewing The Arlo Camera System

By Don DeRosa on April 30, 2017
Don DeRosa

“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 >>


The Question No One Asked

By Jonathan Henrich on April 30, 2017
Jonathan Henrich

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 >>


How to Work Pre-Foreclosures

By Bill Cook on April 30, 2017
Bill Cook

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 >>


Homeunion Survey Identifies Most Promising Markets for a Real Estate IRA

By Jim Hitt on April 30, 2017
Jim Hitt

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.

Overall

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 >>


Finding Deals without Flapping Your Lips?

By Kimberlee Frank on April 30, 2017
Kimberlee Frank

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 >>


Why Would Anyone Give Me $100,000 Cash to Invest?

By Russ Hiner on April 30, 2017
Russ Hiner

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 >>


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