Author Archive
My First Real Estate Mistake
Posted on May 6, 2013 byMy first property turned out to be my first mistake in the real estate business and one of the best lessons I ever learned.
I am a pilot by trade. I graduated college and went straight into the flight academy. I flew and instructed there until my first real job as a corporate pilot for a medical supply company in Macon, GA. When I quit that full time job to go into real estate full time I had saved up $10,000 and had one deal under my belt. My first deal…a duplex which cash flowed $300 dollars a month. It was the best deal I ever did because it got me going in the business and now I have almost 400 units and 8 employees. I also made one giant mistake!
Always place the deal in context of the surrounding market. I analyzed the deal like I was taught and it did cash flow accordingly. I closed on the deal for $40K. Shortly after I attended my first REIA meeting in which I was promptly told “you’re an idiot!” Unfortunately I had to agree with the person that was telling me this. He and his friends had been buying similar duplexes in the neighborhood for $20K! I paid twice what the property was actually worth. Read More→
The Art of Master Lease Options
Posted on April 5, 2013 byMaster lease options are a great way to get started in the real estate business but are often misunderstood. A master lease option is two separate contracts, the master lease and the option to purchase. Together they make up the master lease option (MLO).
A master lease gives you the right to “rent” an entire property. This could be anything from a single family residence to a large apartment complex or strip mall. Once you have a master lease in place you control the property. This includes the management and the operations. You can essentially become the landlord yourself or hire management at your discretion.
The option to purchase sets the purchase price for a certain amount of time and for a certain price. You will negotiate this price and time frame during your offer and negotiation process. Usually an option fee is placed at the time of the signing. The option money is used as a non-refundable deposit to the seller in order for you to control the sale of the property. If you do not close the sale in the time frame set in the purchase option, then you will lose the option money. If you do close the sale then the option money is applied to the purchase price. Read More→
Making Creative Offers
Posted on March 11, 2013 byMaking creative offers is one of the most lucrative skills a real estate entrepreneur can master. Creative offers lead to creative financing and creative financing leads to faster financial freedom. I have built a portfolio of almost 400 units and I have never walked into a bank, qualified for a loan and put money down. I have a lot of bank loans now, but I took control of each property with some form of creative financing and then refinanced at a bank.
I did this by understanding one simple concept- “Solving people’s problems pays well!”
The first step to making offers that get accepted is to create an offer that solves one or all of these three problems; the seller’s problems, the properties problems, your problems.
You will need to gather a bit of information to effectively make your offer. Start by asking about the seller’s motivation to sell. Don’t always assume that money is the only motivation for a sale. Sellers often have other reasons for selling such as dealing with bad management or need to retire. Whatever the motivation is, finding a way to solve that person’s problem is key to writing an offer that gets accepted. A master lease works well for these situations. Read More→
Getting Started in Multifamily – Part 1
Posted on February 8, 2013 byHave you ever thought about getting into the multifamily business? It’s not easy and it’s not for everyone, but if you have what it takes I can show you how! I created Real Estate Raw to pull back the curtain on the commercial multifamily business. I have survived the down turn of the economy and quite frankly I don’t want to go through that again. Do you?!
How many real estate seminars have you sat through to only find that it was one big SALES PITCH! Starting a business armed only with sales pitches is never a good thing. In this 5 part series I will be teaching you the “real side” of the real estate business.
Notice I keep saying real estate “business”? That is one of the first lessons that most people get wrong when starting out in real estate. Let me clarify this for you.
An investor is someone who is sitting around with cash that they need to get a return on. If you have all the cash you need to buy real estate with…then you are an investor. If you are trying to create wealth in real estate (not spend it) then you will need to raise money and possibly qualify for some loans…you are not an investor, you are a real estate entrepreneur. Read More→
