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There are times when we are going to purchase a short sale and then rehab the property for a higher profit. During the rehab on the property, I take my partners shopping. We go to Home Depot and look at all the items I normally put in my cookie cutter houses and I show them why I have chosen each and every product. Then they get to pick their own products and we discuss the price differences to analyze the affect on our profit. It is really fun shopping for an entire house in Home Depot, but the bottom line is to save money. After our trip to Home Depot, we will head over to the cabinet shop if it is a higher end property and we will pick the cabinets and handles. Then we are off to the granite company with a piece of floor tile and a cabinet door so that we can match our granite throughout the house. I call this program my Mentor Program as I bring everything I have learned and taught through my Real Estate Junkie course to my students. By the time we are done, it’s been a “power-shoppin’ day!”
I always recommend that you have a Pro Account at Home Depot which gives me an automatic 10% off everything and if you are a member of a REIA group, you can save another 2% so … working with me already has saved you the cost of a new kitchen on the rehab or more. Read More >>
“Americans spend 3 billion hours per year filling out tax forms and keeping tax records.” ~ Jim Ramstad
There are two things I’ll never do again: first, teach one of my own kids how to drive; and second, help my Aunt May file her tax returns. I’m pretty sure you know Aunt May, or someone just like her. She’s a really sweet lady whose house looks spotlessly organized until you open a drawer or a closet. When she hints that she needs help with her taxes, you volunteer. I mean, she needs you, and she’s so nice! How hard could it be?
Anyway, that’s what I thought. But a day before taxes were due, Aunt May came over with six boxes full of paper. Six boxes! Each contained every manner of paper from receipts to bank statements to movie tickets to Christmas cards. Everything under the sun – except the things I needed. It took sixteen hours, eight aspirins, and three pots of coffee to figure out that she was getting a refund of $1.47. Nope. I adore my Aunt May, but I’m not going through that again.
I’ve never been quite as disorganized as Aunt May, but I’ve certainly had my moments. I discovered pretty quickly that I had better organize my business so I could find what I needed, when I needed it. When you’re trying to convince a potential seller that you run an organized, professional operation, it’s best if you can find the contract they signed. Read More >>
As an active investor, I get a ton of deals regularly from other wholesalers especially with springtime rolling in. They come in all sorts of shapes, forms, fonts, graphics and so forth. While they all have a variety of information, it is rare that ads come with enough information to make a decision on whether it is worth spending time on them. So as a Buyer as well as a wholesaler, I thought I would share some do’s and don’ts to apply when you put ads out to your Buyers to set yourself up for success.
DO put the address – I am amazed at why anyone would think I would look at a deal without an address but it happens.
DO think like a homeowner wanting a perfect house to describe repairs – This is what your Buyer is going to be aiming for. As an example, you may be ‘ok’ with the minor carpet stain however that won’t cut it when your Buyer’s Buyer will want new carpet. Description trumps number estimates since each Buyer has their own contractor with their own pricing.
DO give comparable sales that make sense – radically mixing styles of homes, comps that are too far away for the geographic area, large square footage differences, ignoring unique features such as lakefront, acreage and many more considerations can radically affect what are the best comps. Read More >>
It is the goal of this column to answer questions about QuickBooks and how it is used in the REI arena. Know how to record transactions in the proper way and have your set of books in good shape when it comes time for taxes. It is our intention to do this by you the members submitting questions to Karen@smallbusinessadvisor.biz, and getting answers here in this column.
Q: From time to time I have an entry that I really don’t know how to enter properly. It may be a deposit or a check and I don’t know where to either show the income or the expense. Where can I put this until I can find out from my CPA how to handle it?
A: Create an account named ‘SUSPENSE” and make the type of account a “Bank”. It will live on the balance sheet and will immediately get the attention of your CPA. If you use only this account for these types of entries you can eliminate the Miscellaneous, Uncategorized and Ask my Accountant accounts. Too often these types of accounts get used and the information is scattered across them instead of being in one single account. I usually delete these accounts after I have moved all the transactions to their proper place and then only have Suspense to work with. Read More >>
I actually added this to our lease after a tenant called us at 6:30 one evening to tell us her kitchen sink was stopped up. It turned out that her small child had stuck a cup down into the garbage disposal. It just needed to be removed. The way my lease reads now, that tenant would be charged a fee of $65.00 to have my repair guy go out for something that wasn’t a repair. This one clause will save you from a lot of unnecessary trips to your units for repairs.
I also have someone who checks my rental units every sixty days or so to make sure they are being cared for properly and that the tenant has not added animals that are not on the lease. We also make sure they have not moved in any more people who are not on the lease. This is grounds for immediate eviction. Within the body of our lease, we also cover how long visitors can stay as well so there is a clear definition as to what a visitor is and what an extra tenant is. You can also hire a property management company to handle your units, but I just feel like our units are better handled by my staff. I also send letters to the neighbors surrounding my rental units letting them know that we are interested in any input they may have about my units and my tenants. The neighbors become kind of a watchdog for me to let me know if there are any problems I should know about. Read More >>
Well, it’s been over three years now since ACTS came into the world, and so much has changed since its origination in October of 2011. If you’re not aware of what ACTS means, it stands for Assignments of Contracts and Terms System. It has changed the business of a lot of my students throughout the country and added a lot of additional revenue into their lives, including my own.
However, some people think ACTS is all about over leveraged houses, which is not correct. In fact, ACTS pertains to any kind of terms deals with the seller that can be assigned to an owner occupant tenant buyer, thus the term Assignments of Contracts and Terms System.
Today, I rarely do an overleveraged property because it seems like the number of them is continually declining. In fact, the last time I looked, about 17% of the properties in America were over leveraged according to USA Today. Today, I deal more with free and clear properties and those who have a mortgage with some equity on them. I buy these properties either through owner financing or on a lease purchase. Then, I either install a tenant buyer in them or sell them with owner financing. You will have to decide which one you should do, but I’ll show you how to determine what’s right for you in your area and your personal business objectives. Read More >>
Welcome back! In our last article, we talked about how trends come & go in all things, but we specifically discussed the fact that there are two tried & true strategies that have seemed to stand the test of time in Real Estate Investing. Those strategies are: Wholesaling and Lease Options.
Wholesaling was discussed last time - it’s mainly done in the “Ugly” house business (houses that need a lot of work). And Lease Options are typically understood to be done in the “Pretty” house business (houses that don’t need much work).
Thanks for hanging in with me so far, veteran investors. Keep reading. It gets better.
Lease Options have been around for a good, long time. Certainly as long as any of the well-known, current ‘Gurus’ have been teaching. The way they work is basically like this:
A homeowner/seller wants to sell their house, but a typical wholesale-style deal (usually with a lowball price offer) doesn’t work, or they just don’t like the offer… or the offer doesn’t make sense. I mean, why would any sane seller sell their house that doesn’t need much work that they have a ton of equity in for a deeply-discounted price? Read More >>
You’re out working foreclosures and see an obviously vacant house. There is a sign in the window saying the home has been abandoned and winterized. You look through the window and confirm that it is vacant. Do you open the door with your “investor key” (a credit card) and go inside to look around?
Over the years, real estate investors have hotly debated this topic. Some investors would never go in the home, while others think nothing of slipping the lock so they can inspect the interior before bidding on the property.
I know investors who regularly go into vacant homes. The popular thought is that there’s nothing wrong with that. The investor is not there to steal or vandalize anything, he’s there to estimate the rehab cost so he can accurately determine his maximum purchase price. What can possibly be wrong with this?
There are a lot of funny stories told by seasoned investors about things they found in abandoned properties; things you can’t believe a homeowner would leave behind – like artificial limbs, stuffed (taxidermy) animals, porno magazines, etc. After hearing these stories, many new investors come away thinking that it’s OK to break into vacant homes. But I’m here to tell you – think again! Read More >>
Because money has been easy to get over the past 15 years I wanted to show you how leverage can truly maximize your profits regardless of your credit history. If you can think about the conservation of cash idea borrowing money from banks can definitely be a thing of the past. Leverage is one way how you can use the limited money you have in the most effective way to maximize your profit potential on every property you buy. If you have less than good credit or if you simply don’t want to use your credit you may want to learn how to use less money and with leverage maximize your profits. If you already have limited money you can use what money you currently have to buy one house but you will only profit or grow your money from that one house and nothing more when you rent or sell the property you bought. Leverage can accelerate how you build wealth if done correctly.
Here is a simple example of what I am talking about. For this example let’s say you have $100,000 you have worked hard to acquire over several months or years or you have the ability to borrow $100,000. One day you decide to buy a rental property. You quickly find a house you believe will be a good rental. The sellers of that house are asking $100,000 for their property. During your face-to-face discussions with the sellers you find they would be willing to allow you to make payments to them every month until the property is eventually paid for over the longest period of time you can get the sellers to agree to. Read More >>
How can you get not only what you want but MORE than what you have ever wished for?
Nothing is Unreachable
Your success depends on your vision.
When you expand your thinking, you can expand your success. Expect more and work knowing that you can have it. From the start, know how big you want your business to be and work as though it is already there.
Big business owners keep good analytical data on sales, acquisitions, expenses, and growth. With good analytical data, you can prove that you are a good business person, and people will want to loan/give you money. Read More >>